If you’re living paycheck to paycheck, investing might feel completely out of reach. But the truth is, there are real ways to invest small amounts of money, even if you’re starting with just a few dollars. The key is building the habit early and getting your money into assets that grow over time.
Investing isn’t just for wealthy people or financial experts. It’s for anyone who wants to take control of their future. Starting small is better than not starting at all, and in today’s world, there are more beginner-friendly tools than ever before.
This guide walks you through simple, low-cost ways to start investing, even on a tight budget. You don’t need a lot of money. You just need a plan.
Article highlights
- You can start investing with as little as $1
- Apps, fractional shares, and automation make it easier than ever
- You don’t need to be debt-free or wealthy to begin
8 easy ways to invest small amounts of money
There are more ways to invest small amounts of money today than ever before. Whether you’re starting with $5 or $50, the options below are beginner-friendly, affordable, and designed to help you build long-term wealth. You don’t need a financial advisor or a huge account, just a plan and a little consistency.
1. Use a micro-investing app
The easiest way to invest small amounts of money is to use a micro-investing app. These apps are designed for beginners and let you get started with as little as $1 to $5. They automate the process and help you invest without having to pick individual stocks.
Acorns and Stash are two popular examples. They allow you to round up spare change from purchases or set up recurring deposits. Your money is typically invested into ETFs that spread risk across many companies.
This is a great option if you want something passive that works in the background. It’s also a good way to build the habit without needing to understand complex financial terms or strategies.
2. Open a no minimum deposit retirement account
Yes, you can open a retirement account like a Roth IRA with no minimum deposit at many brokerages. This means you can create the account today, even if you don’t have money to invest right away. That first step matters.
Fidelity and Charles Schwab both offer Roth IRAs with zero minimums. You can deposit small amounts when you’re able, even just $10 or $20 a month. Every dollar you contribute has the chance to grow tax-free, just add small amounts of cash to your account until you can purchase shares of your chosen stocks and ETFs.
Roth IRAs are especially helpful for people just getting started, because you’re investing after-tax money and can withdraw it later without paying taxes on your gains if you follow the rules. It’s one of the best tools for long-term, small-scale investors.
3. Buy fractional shares of stocks and ETFs
You can invest in stocks with $5 by buying fractional shares. Most brokers now allow you to purchase a portion of a stock, rather than needing to afford the full share price. This opens the door to investing in well-known companies without a large upfront cost.
Platforms like Robinhood, Fidelity, and Schwab all support fractional investing. For example, if a single share of Amazon costs $120, you could invest $5 and own a small piece of it.
This strategy is perfect for building a diversified portfolio slowly. Start with a few stable companies or ETFs and keep adding to your positions over time as your budget allows.
4. Invest in a 401(k) through your job
Yes, even if you’re broke, contributing just 1% of your paycheck to a 401(k) is worth it. You probably won’t even notice it missing from your check, and it gets you started with retirement investing right away.
If your employer offers matching contributions, take full advantage. That’s free money. A 401(k) also lets your investments grow tax-deferred, which means your money compounds faster over time.
Talk to your HR department or log in to your benefits portal and see what’s available. If you’re not enrolled yet, sign up and start small. You can always increase your contributions later.
5. Stick to index funds and ETFs
Investing in index funds is one of the best low-maintenance ways to build wealth with small contributions. These funds track the performance of a group of companies, like the S&P 500, and are known for their long-term stability.
You can buy into index funds through any major brokerage, especially if they offer fractional shares. Look for funds with low expense ratios and strong reputations, like those from Vanguard or Fidelity.
Set up automatic deposits if possible. You don’t need to actively manage anything, just let your investments grow quietly over time.
6. Invest that side-hustle money
Yes, reinvesting your side hustle income is one of the smartest moves you can make. Whether you’re driving for Uber, selling items online, or doing freelance work, set aside a portion of those earnings and put them into your investment account.
This is a great way to build wealth without touching your main paycheck. You could even treat it like it doesn’t exist, transfer the money as soon as it comes in and let it grow in the background.
Every $20 or $50 you invest from side income adds up. Over time, those small contributions can compound into real long-term growth.
7. Utilize cashback rewards
Yes, you can use cashback from credit cards or shopping apps to fund your investments. This is money you weren’t counting on, so it’s perfect for growing your portfolio without affecting your regular budget.
Use apps like Rakuten to earn cashback when shopping online, or take advantage of credit cards that give you 1% to 5% back on everyday purchases. Once those rewards accumulate, transfer them into your brokerage account instead of spending them.
This method won’t make you rich overnight, but it turns passive rewards into long-term assets. It’s another way to build good habits and make your money work harder.
8. Make small but automated weekly-deposits
The simplest way to stay consistent is to automate tiny weekly deposits into your investment account. Set it and forget it. Even $5 per week adds up over time and keeps you moving forward without having to think about it.
Most brokers and investing apps let you set up recurring transfers. Choose a day, pick an amount you won’t miss, and let the automation do the work. You can always increase the amount later.
Automating small deposits helps you stick with it long term. You’re building the habit of investing, even when things feel tight. That matters more than any one big contribution.
How much should you have in retirement savings by age
You should aim to have about 1x your salary invested by age 30, and around 10x by the time you retire. Most people are behind, which is why it’s so important to start, even with small amounts. These goals are based on what it typically takes to maintain your lifestyle after you stop working.
This chart shows how much you should ideally have invested for retirement at different stages of life:
| Age | Suggested Target (Retirement Investments) |
|---|---|
| 25 | 0.5× your salary |
| 30 | 1× your salary |
| 35 | 2× your salary |
| 40 | 3× your salary |
| 45 | 4× your salary |
| 50 | 6× your salary |
| 60 | 8× your salary |
| 67 | 10× your salary |
Why you need a big enough balance
When people say you should have “10 times your salary” saved by retirement, the idea isn’t just to hit a round number. It’s about reaching a point where your investments can safely support your lifestyle year after year.
To retire without draining your savings too quickly, you need enough invested to regularly pull from it, without depleting the account entirely. This is what makes a portfolio “self-sustaining.” Ideally, the money you withdraw each year is less than the amount your investments grow.
If your retirement account continues earning 6% to 7% annually, and you only withdraw 4%, the rest continues to grow. That’s how many people aim to retire and live off their portfolio for the rest of their life, and still leave their kids money.
How retirement withdrawals actually work
The most common approach is called the “safe withdrawal rate.” This usually means taking out about 4% of your total balance in your first year of retirement, then adjusting slightly for inflation each year after that.
Let’s say you retire with $1,000,000 invested. A 4% withdrawal gives you $40,000 that first year. But if your portfolio grows by 7%, that’s $70,000 in gains, you’ve still earned more than you spent. Even after your withdrawal, your new balance would be close to $1.03m. And 7% is considered a pretty conservative estimate of growth most years. That’s the power of a self-sustaining retirement plan with compound interest.
On the other hand if your balance is lower, say $400,000, you might have to withdraw a higher percentage. Withdrawing 5% would give you $20,000 that first year. But if the market only returns 4%, that’s $16,000 in gains, less than what you withdrew. Your account would drop slightly to about $396,000 by the end of the year. Over time, that gap can grow, and your balance will shrink faster, especially if inflation increases or the market underperforms.
This is the reason people aim for large balances before retiring. The goal isn’t just to save a bunch of money, it’s to give yourself the freedom to take a steady income from your investments without outliving your money. It’s called planning for retirement for a reason.
The bottom line
There are many different ways to invest small amounts of money like using micro-investing apps, buying fractional shares, or setting up a Roth IRA. These tools are designed to help you get started even if you’re living paycheck to paycheck or only have a few dollars to spare.
You don’t need to wait until you have thousands saved up. The key is starting with what you can, staying consistent, and letting compound growth do its work over time. Small, steady steps are how real wealth is built.