When you imagine investing in the stock market, you might think of suited-up traders moving millions on Wall Street or high-net-worth individuals with deep pockets. But the truth is, investing isn’t reserved for the wealthy. Thanks to today’s technology, low-fee brokers, and fractional shares, nearly anyone can begin building wealth in the stock market—even with just a few dollars.
So how much money do you really need to get started? The answer might surprise you.
The Myth: You Need Thousands to Begin
Let’s bust the myth right away: You don’t need thousands of dollars to start investing. In the past, high minimum deposits and expensive trading fees acted as barriers to entry. But today’s investing platforms have removed those hurdles.
In fact, many modern brokerages let you start with as little as $1, thanks to innovations like fractional shares—which allow you to buy a portion of a stock instead of the whole share. For example, if Amazon stock trades at $3,000 per share, you can still invest $10 and own a small piece of it.
Minimum Investment Requirements: A Breakdown
Here’s a look at how much money you need to start investing using different tools:
1. Online Brokerage Accounts
- Robinhood, Webull, Fidelity, Charles Schwab: No minimum deposit required. You can open an account and start investing with just a few dollars.
- Minimum needed: $1–$5
2. Robo-Advisors
These are automated platforms that build and manage your investment portfolio.
- Wealthfront, Betterment, SoFi Invest: Some have no minimums, others require $500 or more to start.
- Minimum needed: $0–$500
3. Employer-Sponsored Retirement Accounts (e.g., 401(k))
Often, your employer will let you contribute a small percentage of each paycheck toward a retirement account—many even offer matching contributions.
- Minimum needed: Depends on your paycheck; some allow as little as 1% of your salary.
4. Mutual Funds
Many mutual funds still have high investment minimums (often $500 to $3,000), which makes them harder to access for beginners.
- Minimum needed: $500–$3,000 (unless using ETFs instead)
How Much Should You Start With?
Just because you can start with $5 doesn’t mean you should. The amount you invest depends on several factors:
✅ Your Financial Situation
Make sure your basic financial house is in order. Pay off high-interest debt and build an emergency fund of 3–6 months of expenses before investing heavily.
✅ Your Goals
Are you investing for retirement, buying a house, or building passive income? Define your timeline and financial goals. If you’re in your 20s, starting with just $50–$100 a month can lead to a significant nest egg by retirement, thanks to compound interest.
✅ Your Risk Tolerance
Only invest what you’re comfortable losing in the short term. Stocks can fluctuate, and your money may dip in value temporarily.
The Power of Consistency
The truth is, how much you invest matters less than how consistently you invest. A beginner who invests $50 monthly for 30 years can end up with a portfolio worth six figures, especially when returns compound over time.
For Example:
- $50/month for 30 years at 8% annual return = ~$68,500
- $200/month for 30 years at 8% annual return = ~$274,000
Small amounts grow big when you give them enough time.
Tips for Starting Small
If you’re tight on cash, here’s how to get started smartly:
- Use round-ups: Apps like Acorns round up your daily purchases and invest the change.
- Automate contributions: Set a monthly auto-transfer to your brokerage account.
- Avoid big risks early on: Stick with ETFs or index funds instead of speculative stocks.
- Reinvest dividends: Enable automatic dividend reinvestment (DRIP) to compound faster.
Frequently Asked Questions (FAQs)
Q1: Can I really invest with just $1?
Yes! Thanks to fractional shares, many platforms like Robinhood, Fidelity, and Cash App let you buy a piece of a stock with just $1.
Q2: What are fractional shares?
Fractional shares let you buy a portion of a share. So if one share of Tesla costs $1,000, you can still invest $10 and own 1% of that share.
Q3: Is it better to save money first or invest right away?
If you don’t have an emergency fund or you’re dealing with high-interest debt, it’s usually better to tackle those first. Once you’re financially stable, start investing—even small amounts.
Q4: Do I need to pay fees to invest?
Many brokers now offer zero commission trades, so you can invest without paying trading fees. Still, be aware of management fees on funds (called “expense ratios”).
Q5: What’s the difference between saving and investing?
Saving is about preserving money (e.g., in a savings account), while investing is about growing it over time. Investing has higher potential returns but also involves risk.
Q6: How much should I invest each month?
A common recommendation is to invest 10–15% of your monthly income, especially toward retirement. But if that’s too much, start with what you can. Even $25/month is better than nothing.
Q7: Where should I invest my first $100?
Consider starting with a low-cost index fund ETF (like VOO or VTI) that tracks the S&P 500. These funds offer instant diversification and low risk for beginners.
Final Thoughts: Start Small, Think Big
So, how much money do you need to start investing in the stock market? The real answer is: less than you think. Whether it’s $5, $50, or $500, what truly matters is taking that first step.
Stock market investing is not just for the wealthy—it’s for anyone willing to learn, be consistent, and stay patient. Over time, even small investments can snowball into significant wealth.
Your financial journey doesn’t start with a fortune. It starts with a decision.
And that decision can begin today—with whatever amount you have.
