12 Clever Ways to Start Investing if You Don’t Have Much Money

Despite the common belief you need a lot of money to start investing, you can invest in these 12 options without having $1,000 or more.
Updated Dec. 5, 2023
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You’ve probably heard of hedge funds and other unique investments that only the rich can invest in. Chances are, hearing about these investments makes it seem like you must have a lot of money to start investing money. In fact, 62% of people think you need $1,000 or more to open an investment account, according to a recent FinanceBuzz survey about investing habits.

Thankfully, that isn’t the case. You can start investing and building a nest egg with just a little money. Here are 12 smart small investments to consider if you’re ready to make some savvy money moves.


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12 ways to start investing if you don’t have much money

If you don’t have a big investing budget, you still have several investment options to choose from, including investing in the stock market. Consider these options if you want to get started building a healthy investing habit.

Open a retirement account

Opening a retirement account can help you start saving for retirement. Retirement accounts typically offer some form of tax advantage to incentivize you to invest for your future today.

For instance, a Roth IRA doesn’t give you a tax deduction today. Instead, you get to withdraw the money tax-free in retirement as long as you meet the requirements. On the other hand, a traditional IRA may give you a tax deduction today. You have to pay taxes when you withdraw the money in retirement.

Both accounts may have penalties if you withdraw money before age 59 1/2. Be confident you can leave this money invested for the long haul. Ultimately, the type of account you choose depends on your situation and goals.

Make sure to open a retirement account with a company that allows you to start investing with the amount of money you have available. Several no minimum account balance options exist. You shouldn’t have too many problems finding a suitable retirement plan.

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  • Get a 3% match on your eligible retirement contributions1
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  • Open a Roth IRA or a traditional IRA
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  • No commission-fees (other fees may apply)

Invest in an index fund

Whether you decide to invest in a taxable investment account or a retirement account, you have to choose what to invest in. An index mutual fund is one option to consider adding to your investment portfolio.

Essentially, an index mutual fund is a single investment you can purchase. It holds several investments within it. These investments aim to track the returns of an index, such as the S&P 500. The benefit of investing in an index fund is that it allows you to invest without buying a share of each stock within the index.

Index mutual funds may have minimum initial investments to get started, but several do not require a minimum deposit. Fidelity offers a handful of zero minimum investment mutual funds options such as FNILX, FZIPX, FZROX, and FZILX.

Another upside is the investment is diversified, which means you spread out the risk. Rather than holding a single company’s stock, you hold multiple stocks through an index mutual fund. This disperses your risk if one firm performs poorly or goes bankrupt. You still have other companies your mutual fund has invested in that may outperform.

You do have to watch out for fees, though. If two mutual funds earn the same returns, the one with lower fees allows you to keep more money. Even a .5% difference in fees can make a massive difference over the long term.

Diversify with an ETF

Another possibility for small investors is an exchange-traded fund. ETFs work similarly to mutual funds. One significant difference is you can trade an ETF throughout the day. You can only buy and sell mutual funds once per day.

As with mutual funds, ETFs can provide diversification to help you avoid concentrating risk in a single stock. ETFs may also come with lower fees in some cases. They require you to have only enough money to purchase a single share of the ETF. Companies that allow fractional share investing may not have this limit.

If you’re looking for a place to invest in ETFs, consider opening an account with Stash. This service allows you to invest in stocks and ETFs with no minimum investment. Stash does charge a monthly fee to use its service, but it starts as low as $1 per month.

Purchase fractional shares of stock

If you prefer to pick the individual companies you want to invest in, you can still invest in stocks without a lot of money. Several new investing apps, including Robinhood and Stash, allow you to buy fractional shares of stock and ETFs.

Rather than having to save up $1,000 to buy a single share of a popular technology company, you can buy .001 shares of the company for $1. This makes it easy to diversify your portfolio of individual stocks.

You can use fractional shares to buy partial shares of several companies with a relatively small investment. It would be difficult to do this with whole shares unless you had a significant amount of money saved.

Not all brokerage firms allow fractional share investing. If this is how you want to invest, make sure you verify fractional share investing is an option before you open an account.


Stash Benefits

  • Get $20 to make your first investment3
  • Invest in stocks, bonds, and ETFs
  • Fractional shares available
  • Start investing with just $5
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Get started in real estate

When most people think of investing in real estate, such as commercial properties or residential rental properties, they assume they need to purchase an entire building. This could easily cost you $100,000 or more.

You can start investing in real estate with much less money using real estate crowdfunding companies such as DiversyFund. DiversyFund allows you to get started with a $500 investment if you choose to invest in its DiversyFund Growth REIT (real estate investment trust).

The company pools the investments of several investors then uses the money to buy real estate. This particular investment aims to renovate and reposition select properties to increase their value.

This fund doesn’t trade publicly, which means it may be difficult or impossible to sell your investment on short notice. That said, this investment targets medium-term investors that want to invest in private multifamily real estate, such as apartment complexes.

You must decide if an investment’s potential returns like this one exceed the risks you’d have to take in participating. If it does and fits your investing goals, it may work for you.

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Put your money in a CD account

The best small investments don’t have to involve traditional options such as stocks or bonds — sometimes a bank account is a good option too. You can invest in something as simple as certificates of deposit. When you invest in a CD, you let the company know you’re willing to leave the money with the institution for a set period. In exchange, the company pays you a predetermined interest rate.

This may be a good option if you need the money at a set point in the future and can’t risk losing any of your investment. The interest compounds, which means you can earn additional interest on the interest you already made.

CDs are often Federal Deposit Insurance Corporation or National Credit Union Association insured. This provides security knowing your money will be there when the CD matures.

Look into a money market or high-yield savings account

If you don’t want to lock your money away for a set period but still want a higher interest rate than a checking account or savings account, consider a money market or high-yield savings account. Although interest rates have been declining as a whole, these accounts could be a decent savings option when interest rates start rising again.

Certain money market accounts may have a minimum investment required, but it varies by institution. Check before you try to open an account to make sure it won’t be an issue.

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Let a robo-advisor do the heavy lifting

You can’t normally use a traditional fiduciary financial advisor without significant assets already built up unless you want to pay a fee for working with them. Several new companies, called robo-advisors, have started operations within the past decade to address this problem.

Robo-advisors use technology to help you build a diversified portfolio. The technology works to keep you on track with your goals rather than having a human financial advisor do the work for you. Financial experts may build robo-advisors’ portfolios. Then, you choose one to invest in based on your goals and risk tolerance.

The real benefit of robo-advisors is they often have no or low minimum initial balance requirements and low fees to start investing. Traditional fiduciary financial advisors may not talk to you unless you have $100,000 or more already invested. Additionally, the fees for robo-advisors are often lower than the conventional advisor’s usual 1% annual assets under management fee, a fee based on the amount of money you have invested with the company.

One robo-advisor you may want to consider is Betterment. It has no minimum initial investment requirements. Its fees start at .25% of assets under management annually for its digital plan.

If you eventually build $100,000 in investments, you can move to its premium tier. It offers unlimited access to human Certified Financial Planner (CFP) professionals. This tier costs .40% of assets under management annually.

Get started with micro-investing

Micro-investing allows you to invest the tiniest amounts of money repeatedly to start building your portfolio. Acorns is a popular app that enables you to invest your spare change with a concept called round-ups.

You choose from a handful of portfolios of ETFs designed with help from a Nobel laureate. Then, each investment builds the number of shares you own.

When you link a payment card to the app, it rounds up each transaction to the nearest dollar. Once your round-ups exceed $5, they get invested in your chosen investment. The service costs $1 to $5 per month depending on the option you choose. Even so, it’s a great way to start investing with money you won’t miss or even realize you have.

You can invest even more whenever you choose. This may be an excellent way to build an investing habit from scratch and start taking advantage of compound interest if you haven’t started already.


Acorns Benefits

  • Bonus $20 after your first investment
  • No surprise fees
  • Get started for just $3 per month
  • Protected by bank level security
Visit Acorns

Invest in your peers

Traditional stocks, bonds, ETFs, and mutual funds aren’t a great fit for everyone. If you’d rather invest your money with other people, Lending Club or Prosper may be a better fit. These companies connect individual borrowers with people willing to lend money. This concept is called peer-to-peer lending.

You can invest as few as $25 in a loan to a borrower. Once enough people provide enough money to fund the loan, the peer-to-peer lender gives the borrower the money. Then, the peer-to-peer lender collects payments, including interest, and remits the payments to you.

Getting repaid hinges on your borrower making payments. If they default on the loan, you could lose your investment. The return on your investment may be worth the risk depending on your goals.

Invest in yourself

Traditional investments are great, but you may be able to earn even more money investing in yourself. You can buy books or courses to teach yourself new skills that make you more marketable at your job. You can verify your skills by taking tests and earning certifications. These can show your expertise in a particular skill.

You may want to pick up new skills that allow you to start a profitable side hustle. In many ways, successfully investing in yourself could result in making more money in the long run versus investing in traditional investments. Thoroughly investigate any potential training before purchasing it. Although many legitimate opportunities exist, scams are present too.

Purchase U.S. Treasury securities

Some people decide to invest in U.S. debt through Treasury securities, which are debt issued by the federal government. The U.S. has a stellar track record of paying back its debt. The likelihood of a default is extremely low. It can happen though.

If you want to invest in treasury securities, you can start buying them through TreasuryDirect.gov. The smallest purchase on most offerings is $100, but you can buy Series I and EE savings bonds starting at $25.

The bottom line

You don’t have to have hundreds of dollars sitting around to start investing. Thanks to technology and innovation, investing today is more accessible than ever. Now you know you can invest with small amounts of money, it’s time to start working toward your personal finance goals. Just keep in mind that no investment is risk-free.

We’ve highlighted only 12 of smart investments you can start making in this list. Even more low-cost investment ideas exist if you look for them. Once you find an option that fits your needs and long- and short-term financial goals, start setting aside money and developing good investment habits.


Public Benefits

  • Get $3-$300 in free stock when your account is approved*
  • Invest in 1000s of stocks and ETFs with fractional shares—no account minimums
  • Follow friends in a social feed and learn from a diverse community of investors
  • * Free stock offer valid for U.S. residents 18+. Subject to account approval.
Visit Public

Author Details

Lance Cothern Lance Cothern, CPA is a personal finance writer and founder of MoneyManifesto.com. Lance's work covering several personal finance topics has been published in U.S. News & World Report, Business Insider, Credit Karma, Investopedia, and several other publications.

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