Many people still believe investing is only for the wealthy. But in 2023, that couldn’t be further from the truth. Thanks to financial technology, fractional shares, and automated investing tools, you can begin building wealth with as little as $5.
You don’t need a big salary—you need a strategy. And the sooner you start, the better your long-term results. Here’s how to start investing with little money and build a solid financial foundation.
Change Your Mindset About Investing
The first step is to shift your perspective. Investing is not about hitting home runs—it’s about consistency. Small contributions grow over time through compound interest. Waiting until you have more money only delays your progress.
Start now with what you can. Even $20 a month, invested regularly, creates long-term results. Focus on habits, not perfection.
Use Fractional Shares and Low-Cost Apps
Platforms like Robinhood, Fidelity, Charles Schwab, and SoFi allow you to buy fractional shares of major stocks and ETFs. Instead of needing $300 for a full share of Amazon, you can invest just $10.
Micro-investing apps like Acorns and Stash round up your daily purchases and automatically invest the difference. These tools lower the barrier to entry and remove guesswork.
Start With ETFs or Index Funds
If you’re new to investing, consider exchange-traded funds (ETFs) and index funds. These investments give you instant diversification by tracking a broad market index, like the S&P 500.
ETFs like VOO or SPY offer exposure to hundreds of companies, reducing risk and minimizing fees. You don’t need to pick individual stocks to build a solid portfolio.
Automate Contributions to Build Momentum
Set up automatic transfers from your checking account to your investment platform. Choose a fixed amount each week or month. Automation turns investing into a habit and eliminates the temptation to skip contributions.
Over time, you’ll adjust your budget around this habit, making consistent progress without thinking about it.
Open a Roth IRA or Standard Brokerage Account
If you’re in the U.S., a Roth IRA is a powerful long-term tool. It lets you contribute post-tax dollars and withdraw gains tax-free in retirement. Even if you only contribute $50 per month, you’ll benefit from decades of compounding.
If your income disqualifies you from a Roth IRA, or you want more flexibility, a standard brokerage account works too. Both are beginner-friendly and easy to manage online.
Reinvest Dividends Automatically
Many ETFs and stocks pay dividends. Be sure to turn on dividend reinvestment (DRIP), so your earnings are automatically used to buy more shares. This accelerates growth without extra effort.
Even small reinvestments compound over time and contribute to long-term gains.
Invest Lump Sums When Possible
If you receive a tax refund, birthday gift, or bonus, consider investing part of it. These lump-sum infusions can speed up your progress without straining your budget.
Even $200 invested once a year makes a big difference over time.
Avoid High-Fee Funds and Scams
Stick to low-cost ETFs and avoid actively managed funds with high fees. A fund with a 1% annual fee may seem small, but it could cost you thousands in the long run.
Also avoid “get rich quick” crypto schemes or trading platforms promising unrealistic returns. If it sounds too good to be true, it probably is.
Choose a Robo-Advisor for Simplicity
If you’re overwhelmed by choices, use a robo-advisor like Betterment or Wealthfront. These services build and manage a personalized portfolio based on your goals and risk tolerance.
They’re beginner-friendly, affordable, and require little effort on your part. You can start with as little as $10.
Use Side Hustle Income to Invest
Start small with your main income, and use money from side gigs or freelancing to increase your investments. Platforms like Upwork, Fiverr, or even local gigs can help you generate a few hundred dollars a month.
Direct this income toward your investments and watch your net worth grow.
Track Your Progress and Stay Motivated
Use an investing tracker or app to visualize your growth. Watching your portfolio rise—even slowly—reinforces good habits.
Avoid checking it daily. Markets fluctuate. Focus on consistent contributions and long-term goals.
Know What You’re Investing For
Are you investing for retirement, a home, or future freedom? Defining your goal helps you stay motivated when the progress feels slow.
It also determines your investment choices. A 25-year-old investing for retirement can take more risk than someone saving for a home in two years.
Be Patient and Trust the Process
In 2023, markets will rise and fall. Don’t panic. Keep contributing. Stay the course. The most successful investors are the most consistent, not the most aggressive.
Wealth is built with time and discipline, not timing the market.
Final Thoughts
You don’t need thousands of dollars to start investing. You just need a plan and a little consistency. With fractional shares, automated tools, and beginner-friendly platforms, anyone can begin their investing journey in 2023.
Start today. Invest what you can. Let your money grow with you.