There’s a persistent idea that investing is for people with a lot of money. That you need thousands of dollars to get started. It hasn’t been true for years. Fractional shares, zero-commission brokerages, and low-minimum index funds mean you can start investing with whatever you have, even if that’s $50 or $100.
The amount you start with matters less than the fact that you start. Someone who invests $100 a month starting at 25 will have significantly more at 65 than someone who waits until 35 and invests $200 a month. Time in the market does most of the work. Your job is to get in and stay in.
Where to open an account
You need a brokerage account. Fidelity, Charles Schwab, and Vanguard are the big three, all with no account minimums and no trading commissions on stocks and ETFs. Robinhood and SoFi also have zero-commission trading and low barriers to entry.
If your employer offers a 401(k) with a match, start there. A 401(k) match is free money. If your employer matches 50% of contributions up to 6% of your salary, that’s an immediate 50% return before the market even does anything. Max out the match first, then invest additional money in a brokerage or IRA.
For a standalone investment account, a Roth IRA is worth considering if you qualify. You contribute after-tax money, but everything grows tax free and withdrawals in retirement are tax free too. The annual contribution limit is $7,000 for 2025 (or $8,000 if you’re 50 or older). You can open a Roth IRA at any of the brokerages mentioned above.
What to buy with your first $100
Index funds. Specifically, a total stock market index fund or an S&P 500 index fund. These funds hold hundreds or thousands of stocks at once, giving you instant diversification without having to pick individual companies.
The Vanguard Total Stock Market ETF (ticker: VTI) holds over 3,500 US stocks. One share costs around $250, but most brokerages let you buy fractional shares, so you can put $100 into VTI and own a slice. Fidelity’s FZROX (zero expense ratio total market fund) has no minimum investment and charges literally nothing in fees.
The S&P 500 index funds (VOO, SPY, IVV, or Fidelity’s FXAIX) hold the 500 largest US companies. Over the long term, the S&P 500 has returned about 10% per year on average before inflation. That average includes recessions, crashes, and every bad year in between. You don’t need to pick the right stocks. You buy the whole market and let the overall economy do the work.
Why not individual stocks
You can buy individual stocks with $100. Nothing stops you. But picking winners consistently is something that professional fund managers with decades of experience and teams of analysts fail to do. Over any 15-year period, the majority of actively managed funds underperform a simple S&P 500 index fund.
If you want to buy some individual stocks because it’s interesting to you, limit it to a small portion of your portfolio. 90% in index funds, 10% in stocks you find interesting. The 90% does the heavy lifting. The 10% scratches the itch without putting your returns at serious risk.
The power of doing it every month
$100 once doesn’t change your life. $100 every month does.
$100 per month at an average 8% return (a conservative long term estimate) grows to about $150,000 over 30 years. Bump that to $200 per month and you’re looking at $300,000. The math is just time and consistency.
Set up automatic investments. Most brokerages let you schedule recurring purchases of index funds or ETFs on a specific day each month. Automate it the same way you’d automate a bill payment. The money goes in, buys the fund, and you don’t think about it until years later when the balance has grown.
This approach is called dollar cost averaging. You buy at different prices each month: sometimes high, sometimes low. Over time, the average price you paid tends to be lower than trying to time the market, which almost nobody does successfully.
What about the risk
Stocks go down. Sometimes a lot. The S&P 500 dropped 34% in about five weeks in March 2020. It dropped over 50% during the 2008 financial crisis. If you’re investing money you need in the next two years, the stock market is the wrong place for it. Keep short term money in a high-yield savings account.
For money you won’t need for 10 years or more, the stock market has historically recovered from every downturn and gone on to new highs. That recovery might take a year or it might take five. Investing only works if you can ride out the bad periods without panic selling.
The biggest risk for a beginning investor isn’t a market crash. It’s selling during a crash. If you invested $100 a month starting in January 2008, right before the worst financial crisis in modern history, and just kept investing through the crash, your portfolio would have recovered and grown substantially by 2012. The people who lost money permanently were the ones who sold at the bottom.
Keep it simple
You don’t need to understand options, commodities, or crypto to start investing. You don’t need to read financial news every day. You don’t need to pick the right moment.
Buy a total stock market or S&P 500 index fund. Set up automatic monthly investments. Don’t sell when the market drops. Increase the amount you invest whenever you get a raise. That’s it. That’s the entire strategy, and it outperforms the vast majority of more complicated approaches over the long term.
The $100 you invest today is worth more than the $500 you invest five years from now. Start with what you have.