How Much Money Do You Need to Start Investing in Stocks?
The honest answer might surprise you: you can start with as little as $1. But let's talk about what actually makes sense for building real wealth.
By CashSmartGuide Editorial Team - Last updated: January 2026 | 12 min read
One of the biggest myths keeping people out of the stock market is the idea that you need thousands of dollars to get started. I hear this all the time: "I'll start investing when I have $5,000 saved up" or "Isn't stock investing only for wealthy people?"
Here's the truth: thanks to modern technology and fractional shares, the barrier to entry has never been lower. You can literally buy a piece of Apple or Amazon stock with pocket change. But while the technical minimum is extremely low, there are some practical considerations that will help you actually build wealth rather than just dabble.
In this guide, we'll break down the real minimum investment amounts, what's practical for different goals, and most importantly, how to make the most of whatever amount you're starting with.
The Quick Answer
Absolute minimum: $1-$5 (fractional shares make this possible)
Realistic starting point: $50-$100 for your first investment
Ideal for monthly investing: $100-$500 per month
Where most people start: $500-$1,000 initial investment
Sweet spot for beginners: $1,000-$3,000 to start, then $200-$500 monthly
The Technical Minimum: You Can Start With $1
Let me start with the good news: fractional shares have completely changed the game. Remember when one share of Amazon cost $3,000 and you needed that much just to buy in? Those days are gone.
What Are Fractional Shares?
Fractional shares let you buy a slice of a stock rather than a whole share. If Google stock costs $150 per share but you only have $15, you can buy 0.1 shares (10% of one share). When Google goes up 10%, your $15 becomes $16.50, just like if you owned a full share.
Most major brokers now offer fractional shares: Fidelity, Charles Schwab, Robinhood, and many others let you invest any amount down to a dollar. This means the technical barrier to entry is essentially zero.
But Should You Really Start With $1?
Technically yes, practically no. Here's why: While you can invest $1, the impact of that investment on your life is essentially zero. If the stock market grows 10% that year (a typical return), your $1 becomes $1.10. You've made 10 cents.
The math works the same whether you invest $1 or $1,000, but the results feel very different. That $1 investment won't teach you much about investing psychology, won't build meaningful wealth, and might even discourage you when you see how slowly it grows.
Think of it this way: the point of starting to invest isn't just to technically be an investor. It's to start building wealth and learning how markets work. For that, you need enough skin in the game to matter.
What You Should Actually Start With
$50-$100: The Practical Minimum
If you're just starting out and want to get your feet wet, $50-$100 is a reasonable first investment. Here's what this amount can do:
- •It's enough to feel real without being financially risky if you make mistakes
- •You'll actually care about market movements and start learning how investing works
- •In 30 years with 10% returns, that $100 becomes about $1,745 without adding another dollar
- •It proves to yourself that you can do this and builds the investing habit
What to buy with $50-$100: An S&P 500 index fund like VOO or VTI. Don't try to pick individual stocks with this amount. You want broad diversification, and index funds give you ownership in 500+ companies with one purchase. Learn more in our ETFs and index funds guide.
$500-$1,000: Where Most People Start
This is the sweet spot for beginners who are serious about investing. With $500-$1,000, you have enough to:
- •Build a simple diversified portfolio (80% stock index fund, 20% bond fund for stability)
- •See meaningful growth over time that keeps you motivated
- •Weather small market dips without panicking (a 10% market drop on $1,000 is $100, which stings but won't ruin you)
- •Experiment with a small portion in individual stocks if you want to learn
Example portfolio with $1,000: Put $800 in VTI (total stock market fund), $150 in BND (bond fund), and $50 in an individual stock you're interested in learning about. This gives you diversification while letting you experiment. Check out our guide on how to start investing in stocks for the complete step-by-step process.
$3,000-$5,000: The Comfortable Start
If you've saved up $3,000-$5,000 specifically for investing, you're in an excellent position. This amount lets you:
- •Build a properly diversified portfolio across multiple asset classes
- •Start seeing returns that actually matter to your financial life
- •Experiment with different investment strategies without risking everything
- •Have a meaningful head start on your wealth-building journey
With $5,000 invested at 10% annual returns, you'll have about $13,000 in 10 years without adding another penny. But if you also add $300 monthly during those 10 years, you'll have over $75,000. That's the power of combining a good starting amount with consistent contributions.
What's More Important Than Your Starting Amount
Here's something most beginners don't realize: the amount you start with matters far less than developing a consistent investing habit. Let me show you with real numbers.
Two Investors: Big Start vs. Consistent Contributions
Investor A: Big Start, Nothing Added
Starts with $5,000 and never adds another dollar
After 30 years at 10% returns: $87,247
Investor B: Small Start, Consistent Investing
Starts with just $500 but adds $300 every month
After 30 years at 10% returns: $678,146
Investor B ends up with nearly 8x more money by staying consistent, even though they started with just $500.
The Monthly Investment Sweet Spot
Rather than obsessing over your starting amount, focus on what you can invest monthly. Here are realistic monthly contribution levels and what they can become:
| Monthly Investment | After 10 Years | After 30 Years |
|---|---|---|
| $50 | $10,246 | $113,024 |
| $100 | $20,492 | $226,049 |
| $200 | $40,983 | $452,097 |
| $300 | $61,475 | $678,146 |
| $500 | $102,458 | $1,130,244 |
Assumes 10% annual returns (historical S&P 500 average)
Even $50 or $100 per month adds up to life-changing money over time. The key is starting now and staying consistent. Every month you wait is a month of compound growth you're leaving on the table.
Before You Invest That First Dollar
Hold on. Before we talk about investing any amount, let's make sure you're financially ready. These prerequisites matter more than having a big pile of cash to invest:
1. Pay Off High-Interest Debt First
If you have credit card debt at 18-22% APR, pay that off before investing a single dollar. Here's the math: the stock market averages 10% returns, but credit card debt costs you 20%. You're losing 10% by investing while carrying high-interest debt. Eliminate anything over 7-8% APR first. Need help? Check our debt management strategies.
2. Save a Starter Emergency Fund
Before investing, save $500-$1,000 in a regular savings account. This isn't your full emergency fund (that should be 3-6 months of expenses), but it's enough to handle a car repair or medical copay without going into debt. Without this buffer, the first emergency will force you to sell investments at the worst time, potentially locking in losses.
3. Max Out Employer 401k Match
If your employer offers 401k matching, contribute enough to get the full match before investing in a taxable brokerage account. A 50% or 100% company match is an instant 50-100% return - you literally cannot beat that anywhere else. This is free money. Learn how to maximize this in our 401k planning guide.
4. Only Invest Money You Won't Need for 5+ Years
The stock market can drop 20-50% during recessions and take years to recover. If you might need the money for a house down payment, tuition, or living expenses within 5 years, keep it in a high-yield savings account instead. Stock investing is for long-term money only.
Different Goals, Different Starting Amounts
How much you should start investing with depends on what you're investing for. Let's break it down by common goals:
Retirement (30+ years away)
Minimum to start: $50-$100
Recommended monthly: $200-$500 (or 10-15% of gross income)
With decades until retirement, you have time to start small and let compound growth work its magic. Even $100 monthly for 40 years becomes over $632,000. The earlier you start, the less you need to contribute. Check out our IRA account comparison to see which retirement account is right for you.
Building Wealth / Financial Independence (10-20 years)
Minimum to start: $500-$1,000
Recommended monthly: $500-$1,500 (or 20-30% of gross income)
If you want to achieve financial independence or early retirement, you'll need aggressive savings. The good news is you still have a decade or two for compound growth. Starting with $1,000 and adding $750 monthly gets you to $250,000 in 15 years at 10% returns.
Learning and Experimenting
Amount to start: $100-$500
Monthly additions: Whatever you can afford
If you're investing primarily to learn how markets work and develop investing skills, start with whatever amount feels comfortable to potentially lose while learning. Put 70-80% in safe index funds and use 20-30% to experiment with individual stocks. You'll learn valuable lessons without risking your financial future.
Making the Most of Small Starting Amounts
If you're starting with less than $500, here's how to maximize your impact and set yourself up for long-term success:
Choose Zero-Commission Brokers
Every dollar matters when you're starting small. Use brokers like Fidelity, Charles Schwab, or Robinhood that charge $0 commissions. Avoid brokers with account minimums or maintenance fees. Some brokers charge $5-10 per trade, which is a 10% loss on a $50 investment before you even start.
Stick to Low-Fee Index Funds
Management fees eat into returns, especially with small amounts. Choose index funds with expense ratios under 0.10%. For example, VTI charges 0.03% annually while some actively managed funds charge 1.0% or more. Over 30 years, that difference turns a $10,000 investment into either $174,494 (0.03% fee) or $130,226 (1.0% fee). That's $44,000 lost to fees.
Automate Your Investments
Set up automatic transfers from your checking account to your brokerage, then automatic purchases of your chosen index fund. Start with $25, $50, or $100 per month - whatever fits your budget. Automation removes the temptation to skip months or spend that money elsewhere. Small amounts invested consistently beat large amounts invested sporadically.
Reinvest All Dividends
Enable automatic dividend reinvestment (DRIP) in your brokerage account. When your investments pay dividends, they'll automatically buy more shares instead of sitting as cash. This compounds your growth without any effort from you. Over decades, reinvested dividends account for a huge portion of total returns. Want to dive deeper? Read our guide on how dividend stocks work.
Increase Contributions When You Can
Got a raise? Increase your automatic investment by half of that raise amount. Paid off your car loan? Redirect that payment to your investment account. These habit upgrades accelerate your wealth building without feeling like a sacrifice since you never had that money in your budget anyway.
Common Questions About Starting Amounts
Should I wait until I have more money saved up?
No. Time in the market beats timing the market, and every month you wait is compound growth you're missing. If you have $100 today, invest it today and add more monthly. Waiting until you have $1,000 might cost you 6-12 months of growth. Plus, starting small helps you build the investing habit and learn without risking much.
Can I really build wealth starting with just $100?
Absolutely, but only if you add to it consistently. Starting with $100 and adding $200 monthly for 30 years at 10% returns gives you $455,944. The starting $100 becomes $1,745 on its own, but your consistent contributions and compound growth do the heavy lifting. The starting amount gets you in the game, but consistency builds the wealth.
Is it better to invest a lump sum or dollar-cost average?
Research shows lump sum investing typically wins because markets go up more often than down. However, psychologically, dollar-cost averaging (spreading investments over several months) helps many people feel more comfortable and stick with investing through volatility. If you have $5,000 saved, you could invest $1,000 immediately and then $500 monthly for 8 months. This captures most of the lump sum benefit while reducing timing anxiety.
What if I can only afford $20-$30 per month?
That's still worth it! Investing $25 monthly for 40 years at 10% returns becomes $158,116. That's life-changing money built from what seems like pocket change. Plus, starting the habit with $25 is better than waiting until you can afford $100. You'll likely increase contributions as your income grows. The habit and the head start matter more than the amount.
Should I invest in individual stocks with a small amount?
Not initially. With amounts under $1,000, stick to index funds for diversification. Individual stocks are much riskier - one company going bankrupt could wipe out your entire investment. Once you have $2,000-$3,000 invested in index funds as your foundation, you could experiment with 10-20% in individual stocks to learn. But make sure you understand the risks first by reading about common beginner mistakes.
Should I invest in stocks or real estate with my starting capital?
With less than $10,000-$20,000, stocks are your best option. Real estate requires significant capital for down payments (typically $30,000-$100,000 minimum) plus ongoing maintenance costs. Real estate can be a great investment, but stocks offer lower barriers to entry, better liquidity, and easier diversification for beginners. Explore both options in our real estate investing guide, but start with stocks if you're working with smaller amounts.
Your Action Plan: Getting Started This Week
Enough theory. Here's exactly what to do this week to start investing, regardless of how much money you have:
Day 1-2: Open a Brokerage Account
Choose Fidelity or Charles Schwab (both excellent for beginners). Opening an account takes 15 minutes. You'll need your Social Security number, driver's license, and bank account info. The account will be approved almost instantly.
Day 3: Transfer Your Starting Amount
Link your bank account and transfer whatever amount you've decided to start with - $50, $100, $500, or more. Most brokers offer instant deposits up to $1,000 so you can start investing immediately.
Day 4: Make Your First Investment
Buy shares of VTI (Vanguard Total Stock Market ETF) or VOO (Vanguard S&P 500 ETF). These index funds own hundreds of America's best companies. Search for the ticker symbol in your broker app, enter the dollar amount you want to invest, and buy. That's it - you're now a stock market investor!
Day 5-7: Set Up Automatic Monthly Investments
Go to your broker's automatic investment settings and set up monthly purchases of the same fund. Start with whatever you can afford - $50, $100, $200, or more. This is the most important step because consistency matters more than starting amount.
That's it. You've started investing. Now the hard part: leave it alone. Check your account once per quarter at most. Keep making those automatic contributions. In 10, 20, 30 years, you'll look back at this week as the moment everything changed financially.
Starting Amounts Compared: 30-Year Outcomes
Still wondering if your starting amount matters? Here's what different starting amounts plus monthly contributions become over 30 years at 10% annual returns:
| Initial Investment | Monthly Addition | Total After 30 Years |
|---|---|---|
| $0 | $100 | $226,049 |
| $500 | $100 | $234,772 |
| $1,000 | $100 | $243,494 |
| $0 | $300 | $678,146 |
| $2,000 | $300 | $713,035 |
| $5,000 | $300 | $765,393 |
| $1,000 | $500 | $1,147,689 |
Notice how the difference between starting with $0 versus $5,000 is only about $87,000 after 30 years, but the difference between investing $100 versus $500 monthly is over $900,000. Your consistent contributions matter far more than your starting amount. The best strategy? Start with whatever you have and maximize your monthly additions.
The Bottom Line: Just Start
After reading all these numbers, you might feel overwhelmed or think you don't have enough to start. Let me be clear: that's exactly the wrong takeaway.
The amount you start with doesn't matter nearly as much as you think. What matters is starting, period. Starting with $50 and adding $100 monthly will make you wealthy over time. Starting with $5,000 and never adding another dollar won't.
The stock market has created more millionaires than any other wealth-building tool in history, and it's not because everyone started with huge amounts. It's because people started with whatever they had and stayed consistent for decades.
You don't need to be rich to invest. You invest to become rich. So take whatever amount you have right now - $20, $50, $100, $500 - and start this week. Open that brokerage account. Buy that first index fund. Set up automatic monthly investments.
Ten years from now, you'll wish you had started today. Don't let that be your story. Start now.
Continue Your Investing Education
How to Start Investing in Stocks
Complete beginner's guide with step-by-step instructions to start investing today
Stocks vs Bonds: Which Is Safer?
Understand the risk-return tradeoff and how to balance your portfolio
Common Stock Market Mistakes to Avoid
Learn from others' mistakes and avoid costly errors as a beginner investor
Dividend Stocks Explained
How dividend stocks provide passive income while growing your wealth
ETFs & Index Funds Guide
Learn about the best index funds for long-term wealth building
Real Estate Investing
Compare real estate vs stock investing and learn which is right for you
Investment Disclaimer
This article provides general educational information about investing and should not be considered personalized financial advice. All investing carries risk of loss, and past performance does not guarantee future results. The 10% average annual return figure is based on historical S&P 500 performance since 1928 and includes significant periods of losses. Individual circumstances vary significantly. Before making investment decisions, consider consulting with a licensed financial advisor who can provide advice tailored to your specific situation, risk tolerance, and financial goals. The examples provided are for illustrative purposes only and do not represent guaranteed investment returns.