How to Start Investing with Just $100 from your phone

Have you ever thought about investing but felt held back because you didn’t have a lot of money to start? You’re not alone! Many people believe you need thousands of dollars to begin investing, but the truth is, you can start with as little as $100. In this beginner’s guide, we’ll walk you through exactly how to start investing with just $100, the best options for small investors, and tips for growing your wealth over time.

Why Start Investing with $100?

Breaking the Myth: You Don’t Need a Fortune

For decades, investing was seen as something only the wealthy could do. But thanks to technology and new financial products, investing is more accessible than ever. Starting with just $100 is not only possible—it’s smart. Here’s why:

Early Start, Bigger Rewards: The earlier you start, the more time your money has to grow thanks to compound interest.

Learning by Doing: Small amounts let you learn the ropes with minimal risk.

Building Good Habits: Investing regularly, even in small amounts, sets you up for long-term financial success.

Step 1: Set Your Investing Goals

Before you put your $100 to work, ask yourself:

What am I investing for? (Retirement, a house, education, etc.)

What is my time horizon? (Short-term, medium-term, long-term)

How much risk am I comfortable with?

Pro Tip: For beginners, long-term goals and a moderate risk tolerance are a great starting point.

Step 2: Understand Your Investment Options

With $100, you have more choices than you might think. Here are some of the best ways to invest small amounts:

1. Stock Market (Fractional Shares)

You don’t need to buy a whole share of a company anymore. Many brokerages let you buy “fractional shares,” so you can own a piece of companies like Apple or Tesla for just a few dollars.

Best For: Beginners wanting exposure to big-name companies.

How To Start: Open an account with platforms like Robinhood, Fidelity, or Charles Schwab.

2. Exchange-Traded Funds (ETFs)

ETFs are baskets of stocks or bonds you can buy with a single purchase. They offer instant diversification and are perfect for small investors.

Best For: Those seeking broad market exposure and lower risk.

How To Start: Search for ETFs with low fees, such as Vanguard’s VOO or iShares’ IVV.

3. Robo-Advisors

Robo-advisors like Betterment, Wealthfront, and SoFi automatically invest your money based on your goals and risk tolerance. Many have no minimums or very low minimums.

Best For: Hands-off investors who want a professional touch.

How To Start: Sign up, answer a few questions, deposit your $100, and let the robo-advisor do the rest.

4. Micro-Investing Apps

Apps like Acorns and Stash are designed for beginners. They let you invest spare change or small amounts in diversified portfolios.

Best For: Absolute beginners and those who want to invest “painlessly.”

How To Start: Download the app, link your bank account, and set up automatic investments.

5. High-Yield Savings or Certificates of Deposit (CDs)

While not technically “investing” in the stock market, high-yield savings accounts or short-term CDs are safe places to grow your money with minimal risk.

Best For: Those who want zero risk and easy access to their money.

How To Start: Open an account with an online bank offering high interest rates.

Step 3: Choose the Right Platform

Not all investing platforms are created equal. Here’s what to look for:

Low or No Minimums: Make sure you can start with $100 or less.

Low Fees: High fees can eat into your returns, especially with small amounts.

User-Friendly Interface: As a beginner, you want something easy to use.

Educational Resources: Look for platforms that offer tutorials, blogs, or videos.

Popular Choices:

Robinhood (stocks, ETFs, fractional shares)

Fidelity (fractional shares, ETFs, mutual funds)

Acorns (micro-investing, automatic round-ups)

Betterment (robo-advisor portfolios)

Step 4: Make Your First Investment

Ready to put your $100 to work? Here’s a simple step-by-step process:

Open an Account: Choose your platform and sign up.
Deposit Funds: Link your bank account and transfer your $100.
Pick Your Investment: Start with a diversified ETF, a fractional share of a blue-chip stock, or a robo-advisor portfolio.
Review and Confirm: Double-check your choices and confirm your purchase.
Track Your Progress: Use the platform’s dashboard to watch your investment grow.

Step 5: Grow Your Investment Over Time

Investing $100 is a great start, but the real magic happens when you keep adding to it. Here’s how to maximize your returns:

1. Invest Regularly (Dollar-Cost Averaging)

Set up automatic monthly contributions—even $10 or $20 a month makes a difference. This strategy, known as dollar-cost averaging, helps smooth out the ups and downs of the market.

2. Reinvest Your Earnings

If your investments pay dividends or interest, reinvest them. Most platforms let you do this automatically.

3. Diversify

Don’t put all your eggs in one basket. Over time, add different types of investments (stocks, bonds, ETFs) to reduce risk.

4. Keep Learning

Read books, follow blogs, and listen to podcasts about investing. The more you know, the better your decisions will be.

Common Mistakes to Avoid

Even with just $100, it’s important to avoid these beginner pitfalls:

Chasing Hot Stocks: Don’t try to get rich quick by buying risky stocks based on hype.

Ignoring Fees: Even small fees can eat into your returns over time.

Overreacting to Market Swings: The market goes up and down—don’t panic and sell at the first sign of trouble.

Not Diversifying: Spreading your money across different investments reduces risk.

Forgetting Your Goals: Stay focused on your long-term objectives.

Frequently Asked Questions

Can I really make money investing just $100?

Yes! While $100 won’t make you rich overnight, it’s the first step toward building wealth. Over time, with regular contributions and compounding, small amounts can grow significantly.

Is investing $100 risky?

All investing carries some risk, but you can minimize it by choosing diversified investments like ETFs or using robo-advisors. Never invest money you can’t afford to lose.

How do I choose what to invest in?

For beginners, broad-market ETFs or robo-advisors are a safe bet. As you learn more, you can explore individual stocks or other assets.

What if I lose my $100?

Losing money is always a risk, but if you diversify and invest for the long term, the chances of losing everything are low. Start small, learn as you go, and never invest more than you’re comfortable with.

Sample Investment Strategies for $100

1. The “All-in-One ETF” Approach

Invest your $100 in a total market ETF like Vanguard Total Stock Market ETF (VTI) or iShares Core S&P 500 ETF (IVV).

This gives you instant diversification across hundreds of companies.

2. The “Fractional Shares” Approach

Split your $100 among 2-3 blue-chip stocks (e.g., Apple, Microsoft, Google) using fractional shares.

Great for learning how individual companies perform.

3. The “Robo-Advisor” Approach

Deposit your $100 into a robo-advisor like Betterment or Wealthfront.

Let the algorithm build and manage a diversified portfolio for you.

4. The “Micro-Investing” Approach

Use Acorns or Stash to invest your $100 in a mix of ETFs and bonds.

Set up automatic round-ups to keep growing your investment.

The Power of Compounding: How $100 Can Grow

Let’s say you invest $100 and add just $20 a month, earning an average annual return of 7% (the historical average for the stock market):

After 1 year: $349
After 5 years: $1,489
After 10 years: $3,562

That’s the magic of compounding—your money earns money, which then earns even more money!

Investing with $100: Real-World Success Stories

Case Study 1: Sarah the Student

Sarah started investing $100 in a low-cost ETF during college. She added $25 a month from her part-time job. After five years, her portfolio had grown to over $2,000—enough for a down payment on a used car.

Case Study 2: Mike the New Grad

Mike used a robo-advisor to invest his first $100. He liked how easy it was and set up automatic deposits. Over time, he diversified into individual stocks and learned valuable investing habits.

Tools and Resources for Beginner Investors

Books:
- “The Simple Path to Wealth” by JL Collins
- “I Will Teach You to Be Rich” by Ramit Sethi
Websites:
- Investopedia
- NerdWallet
- The Motley Fool

Final Thoughts: Your $100 Investment Journey Starts Today

Starting small is better than not starting at all. With just $100, you can begin your investing journey, build good financial habits, and set yourself up for a brighter financial future. Remember, the most important step is the first one—so take action today!