How to Start Investing Without a Lot of Money

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We all hope and aspire to be able to save and grow our money. It’s not just a good idea. It may be fun to do and a challenge, but it is very important to save money for the future, target “numero uno”: retirement! But right now, even trying to find a high-interest savings account online has become practically impossible and if you do find any, you can’t earn enough interest to keep up with inflation. That’s where investing comes in. You may have put off investing because you didn’t have much in the way of finances, but I’m here to tell you to how to start investing without a lot of money.

Many people put off investing because they think it's a big commitment of funds. But you can learn how to start investing with only a small amount of money.

Investing Your Money Has Become a Real “Go To” Plan

You may think that investing is only for wealthy people. Or that you just don’t even know the most fundamental thing about investing and are simply frightened at the thought of it. Or you may have just put off investing forever. If you did that because you didn’t have much money left over for investing, then I have very good news for you. It doesn’t take much money to get started with investing!

Are You Ready to Start Investing?

It’s true that you may not need a ton of money to start your investing, perhaps not as much as you may have thought. But even if you don’t need a lot of it, when investing you do need to have some money available.

Test #1

So the first test of readiness is whether you have saved up some of the money you earn now or whether you can earn more than you spend. Yes, saving some of your current income is a sure-fire way to increase your wealth and probably the least practiced way of doing so. It’s totally up to you to do it and practice “saving skills”. Even if I tell you how (which I do every three weeks or so), I can’t do it for you!

Test #2

The second test of readiness to see if investments are for you is whether you have an acceptable emergency fund on hand. While investing is an important key to your future, an emergency fund is an important key to getting to that future. Without an emergency plan in place to tackle things like loss of job, emergency home and car repairs, or something worse, a worldwide pandemic for example, you’d probably be raiding your investments, IRA accounts, and failing to get ready for judgement day, a.k.a. retirement day!

Test #3

The third test of readiness for investing is whether or not you have a lot of high-interest debt, such as credit card debt, weighing you down. If you do have it, and most people do, it’s way more cost effective to pay down that debt first before you decide to take on investing in any big way. But, if you try even doing some small adjusting to your spending and saving activity, paying off your debt and starting a small investment regimen can be done simultaneously. Even if paying off your debts will take a significant amount of time, you should begin investing now.

If You’re Not Quite Ready

The best savings account around that offers you a fighting chance against traditional banks and inflation is from Chime. Why?

Chime currently offers a strong 1.00% APY for their online savings account and there is no minimum deposit required. They include other features that really focus on the individual saver like:

  • 38,000 fee free ATM’s
  • Spot Me feature that means you won’t be charged an overdraft fee if you overdraw your balance
  • Direct deposit that gets you paid 2 days faster
  • And if you need a little boost to start saving while earning your APY, Chime can round up your purchases to the nearest $1 to help you save faster and earn faster

How to Start Investing Without a Lot of Money

Investing in Employer-Sponsored Accounts

If you’re going to begin investing, you should start with the accounts already available to you such as your employer-sponsored 401(k) account (or similar accounts). There’s even more reason if you are getting some kind of employer-matched funds when you invest in those accounts. If so, you will want to contribute at least enough to get those matching funds. In other words, free money!

Beyond that, contributing to a 401(k) can be rewarding, depending on what your investment choices and fees are. It’s also easy to do as you typically just tell your HR department how much you want to contribute and it’s taken directly from your paycheck and invested. You may hardly even notice it when you are practicing the “saving on expenses” skills I mentioned earlier!

Investing Using Everyday Purchases

This next option doesn’t even require money to invest, although it does require you to spend some of your money. Bumped is a loyalty rewards app that rewards you in fractional shares of stock. You sign up, download the app, link up your credit card, and select brands in each of several categories. Then each time you purchase goods or services at one of the brands you’ve selected on your linked credit card, you receive a fractional share of a related stock.

Imagine this scenario: in the Coffee category, you might choose Dunkin’ as your brand. Each time you make a purchase there, you will receive the equivalent of 2% of your purchase back in DNKN stock. You are drinking that cup of coffee every day anyway and now you’re getting paid in stock for doing it!

How much your portfolio grows is very much dependent on how often you make purchases from the brands you select. Obviously, you don’t want to make purchases just to get the reward, but if you’re spending money there anyway, this is a very nice perk that accumulates over time.

Another app that can help you use everyday purchases to invest is Acorns (use this link for a $10 sign-up bonus!). However, rather than giving you stock as a loyalty reward, Acorns rounds up your purchases to the next dollar and then invests your spare change. There is a fee of $1/month which could eat into your investment depending on how many purchases you make each month, so consider that if you decide to try it.

Investing Directly Using Apps

There are now more apps and programs than ever for you to invest in to become part of the scene these days. The most friendly way I see are those apps that actually let you buy fractional shares of stocks, even the ones that sell at hundreds of dollars per share for pennies.

If you’re not sure what to invest in, you might choose a robo-advisor. These programs ask you questions to build a profile, then invest your money in a diversified, low-cost portfolio of stocks and bonds. They even rebalance your portfolio over time. However, in exchange for this easy approach, you typically pay an annual fee based on your investment, usually about 0.25%, which may be worthwhile for the beginning investor.

Even apps that aren’t robo-advisors have built-in suggestions such as expert portfolios for you to use as your model and advice and educational resources.

Check out these no or low-cost options, great for beginning investors, to see which might work best for you:

M1 Finance – While there is a $100 minimum, M1 Finance is a robo-advisor that lets you invest for free. There are no trade fees or annual fees. You can purchase fractional shares to customize as you wish, or follow expert portfolios. – is designed for the new investor. There are no minimums, and there is fee-free trading and fractional shares. You can build your financial literacy by following other investors and sharing insights.

Stash (use this link for a $5 sign-up bonus!) – Stash’s beginner platform costs just $1/month which lets you invest in fractional shares and provides advice and education plus a Stock Back debit card that rewards you with stock. There is no minimum and you can schedule investments for as little as $5 on a weekly or monthly basis.

Stockpile – While great for giving stock as a gift, Stockpile is also a great way to invest. There are no account minimums and no account fees, but there is a $0.99 fee to buy stock. You can purchase fractional shares.

There are plenty more investing apps, most with no or low minimums, no trade fees, and fractional shares. You can look into Betterment, Robinhood, Vanguard’s Beacon app, YouInvest by J.P. Morgan, Merrill Edge, Ally Invest, SoFi Active Investing, E*Trade, TD Ameritrade, Charles Schwab, Fidelity, and Webull.

Final Thoughts

For a long time, I personally was against investing and that probably was a mistake. While I was “all in” back in the 1980’s and 1990’s, I did it through traditional investment brokers and paid a small fortune in fees, but I was successful at growing my investment money.

No, I wasn’t a genius but more of a beneficiary of the tech boom and buying into stocks that fostered the growth of the internet and technology. It was being in the right place at the right time on steroids, so to speak.

After that, I then took the position that as I raced towards retirement, despite my positive approach to eliminating debt and saving for emergencies and retirement, I didn’t want to tolerate any investment risks. But now things are different!

With costs being reduced and eliminated by all of the technologies we have available, and the ability to buy fractional shares at no cost and fees to at least “dabble” in the market for those who are in good financial position, I say make it at least a small part of your money strategy.

Do a little homework and it can change your view on how to start investing and build your financial future.

Do you have an investment plan at work or on your own to build your wealth? Are you up-to-speed on the ability to buy stocks fractionally at no cost? Why aren’t you investing and can you change your finances around so you can make investing a part of your financial strategy?


    1. I can agree that dipping your toe is a good way to get involved and learn the ropes of investing. While I believe that paying off your high-interest debts should be the number one priority, I can see that other priorities will be on the list as well, and knowledge of investing is certainly valuable. Thanks for pointing that out, CaptainFI.

  1. Wow, amazing blog through which we can get very good knowledge regarding the investment without a lot of money… yes, the most important thing is to clear your debt before investment. and earn from a small investment is a very good thing because after this investment you will learn more new tricks and tips to invest in the market and earn high profits.

    1. What a coincidence, I’m publishing an article tomorrow about how a beginner can start investing. Just keep in mind that by definition, investing means there’s risk and no one can guarantee a high return on any particular investment. That being said, there’s plenty of opportunity to get a good return, especially if you use a long-term approach. Mutual funds are safer than individual stocks because they’re more diversified. I would examine ones with a good track record that demonstrate success over a longer period of time. Good luck!

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