How to Start Investing With $100 (4 Simple Steps)

One of the most common reasons people give for not investing is that they don’t have enough money to start.

I thought the same thing for a long time. Investing felt like something for people with spare thousands sitting around — not for someone juggling a mortgage, kids, and a full-time job with whatever’s left at the end of the month.

What I eventually learned: you don’t need thousands to start. You need $100. Or less. The amount matters far less than most people think. What matters is starting — and the earlier the better, because of how compound interest works over time.

Here’s the practical, step-by-step version.

Step 1 — Open a Brokerage Account

Before you can invest in anything, you need a brokerage account. This is simply an account that lets you buy and sell investments — stocks, ETFs, bonds, and so on.

The good news: opening a brokerage account is free, takes about 10-15 minutes, and most major brokerages have no minimum balance requirements.

The most widely recommended options for beginners in the US:

Fidelity. No account minimums, no trading fees, excellent educational resources, and strong customer service. Widely considered one of the best overall brokerages for beginners.

Charles Schwab. Similar to Fidelity — no minimums, no trading fees, strong reputation. Also offers fractional shares, which lets you invest in expensive stocks with small amounts of money.

Vanguard. The home of low-cost index investing. Slightly less beginner-friendly interface, but if you’re planning to invest primarily in index funds for the long term, Vanguard is a natural home for that.

You’ll need to provide some basic personal information — name, address, Social Security number — and link a bank account to fund the account. The process is straightforward and usually takes less than a day to complete.

Step 2 — Decide What to Buy

This is where most beginners get stuck. The options feel overwhelming — thousands of stocks, hundreds of ETFs, bonds, mutual funds, REITs.

Here’s the simplest, most evidence-backed answer for someone just starting out: buy a low-cost S&P 500 index ETF and leave it alone.

The three most popular options:

VOO (Vanguard S&P 500 ETF). Tracks the S&P 500. Expense ratio of 0.03% — you pay $3 per year for every $10,000 invested. One of the most recommended investments for long-term investors at any experience level.

SPY (SPDR S&P 500 ETF). Also tracks the S&P 500. Slightly higher expense ratio (0.09%) but the most heavily traded ETF in the world.

IVV (iShares Core S&P 500 ETF). Another S&P 500 tracker with a 0.03% expense ratio. Essentially identical to VOO in terms of what you own.

Any of these three will do the same thing: give you exposure to the 500 largest US companies for a minimal annual fee. The differences between them are negligible for most investors.

If you want slightly broader diversification, VTI (Vanguard Total Stock Market ETF) holds the entire US stock market — over 3,500 companies — rather than just the top 500.

Step 3 — Make Your First Purchase

Once your account is funded and you’ve decided what to buy, making the actual purchase is straightforward:

Search for the ticker symbol (VOO, SPY, etc.) in your brokerage’s trading interface. Select “Buy.” Enter the amount you want to invest — most brokerages now support fractional shares, so you can invest exactly $100 even if a full share costs more than that. Review and confirm the order.

That’s it. You now own a piece of 500 of the largest companies in the United States.

Step 4 — Set Up Automatic Investing

This is the step that makes the biggest difference over the long term, and it’s the one most people skip.

Most brokerages allow you to set up automatic recurring investments — a fixed amount invested on a regular schedule, regardless of what the market is doing. You choose the amount ($25/week, $100/month, whatever fits your budget) and the frequency, and the brokerage handles the rest automatically.

This approach is called dollar-cost averaging, and it has two major advantages:

First, it removes the temptation to time the market. You invest on schedule whether the market is up or down — which means you automatically buy more shares when prices are lower and fewer when prices are higher. Over time, this tends to produce better results than trying to pick the “right” moment to invest.

Second, it makes investing automatic and frictionless. You don’t have to remember to do it, you don’t have to make a decision each time, and you’re far less likely to skip it when life gets busy. The money moves before you even have a chance to think about spending it on something else.

Even $25 per week — about $100 per month — invested consistently in an S&P 500 ETF over 30 years at historical average returns would grow to approximately $122,000. The habit matters more than the amount.

Step 5 — Leave It Alone

This is the hardest step. Not because it requires effort, but because it requires inaction in moments when every instinct tells you to do something.

The stock market drops. Sometimes significantly. In 2020, the S&P 500 fell about 34% in a matter of weeks as COVID panic set in. In 2022, it fell about 19% as inflation surged and interest rates rose. These drops feel terrible, especially when you can see your account balance declining in real time.

But here’s what the historical data shows consistently: investors who stay invested through downturns tend to do significantly better than those who sell and try to re-enter the market at a better time. The “better time” almost always comes too late — after significant recovery has already happened.

Time in the market beats timing the market. This is one of the most well-supported findings in investment research, and it’s the reason “leave it alone” is genuinely the most important step for long-term investors.

What About Retirement Accounts?

Before or alongside opening a regular brokerage account, it’s worth knowing about tax-advantaged retirement accounts — specifically the 401(k) and IRA in the US.

401(k): If your employer offers a 401(k) with a matching contribution, prioritize contributing enough to get the full match before investing elsewhere. An employer match is essentially free money — a 100% instant return on your contribution up to the match limit.

Roth IRA: A Roth IRA lets you invest after-tax dollars and withdraw the gains tax-free in retirement. For most people in lower to middle income brackets, this is one of the most powerful investment vehicles available. The annual contribution limit is $7,000 for 2024 (plus $1,000 if you’re 50 or older).

The same ETFs — VOO, SPY, VTI — can be held inside a Roth IRA, giving you both the diversification of index investing and the tax advantages of a retirement account.

Common Beginner Mistakes to Avoid

Waiting for the “right time” to invest. There is no right time. The market is always either at a high (which feels scary to buy into) or in a downturn (which feels scary for different reasons). The right time is now, with whatever you can afford.

Checking your portfolio too often. Daily or weekly portfolio checks are a recipe for emotional decisions. Long-term investing works best when you’re not watching it constantly. Monthly or quarterly checks are plenty.

Trying to pick individual stocks before understanding the basics. There’s nothing wrong with eventually owning individual stocks, but starting with a broad index ETF gives you market exposure while you continue learning.

Investing money you might need soon. Only invest money you won’t need for at least five years — ideally longer. Keep your emergency fund in savings, not investments.

My Personal Take

When I finally opened my first brokerage account, the actual process took about 20 minutes. I’d spent months thinking about it, researching it, convincing myself I needed to know more before I started.

I didn’t need to know more. I needed to start.

The $100 I invested on day one isn’t going to change my financial life on its own. But the habit it started — the automatic monthly contribution, the discipline of leaving it alone, the slow accumulation over time — that’s what actually matters.

You don’t need to be rich to start investing. You need to start investing to build wealth. Those two things are in a different order than most people assume.

Start with $100. Set it up automatically. Leave it alone. That’s the whole strategy.

If you want to understand more about why starting early matters so much, read about compound interest — the math behind why time is the most powerful variable in long-term investing.