Investing 101: How to Start With Just $50
You Don’t Need a Lot of Money—Just a Little Momentum
Most people think investing is only for people who already have money. I used to believe that too. I figured I’d wait until I was “making more” or “debt-free” before I even touched the stock market. But here’s the truth that changed my life: you can start investing with just $50 or even $5. Seriously.
The key to building wealth isn’t about how much you start with—it’s about how early and consistently you begin. In this guide, I’m going to walk you through exactly how to get started as a total beginner, even if you don’t have much cash to spare.
This isn’t about get-rich-quick tricks. It’s about planting small financial seeds now that can grow into serious money over time.
Why You Should Start Investing (Even With a Small Amount)
Let’s start with the why. If you’ve got money sitting in a regular savings account, it’s probably earning about 0.01% interest (if anything). That’s not keeping up with inflation, which means your money is losing value just by sitting there.
Now compare that to investing in the stock market. Historically, the average return on the S&P 500 (an index of 500 of the largest U.S. companies) is around 7–10% annually after inflation.
So even a little invested consistently over time can make a huge difference. Let’s say you invest just $50/month starting at age 25. If your investment grows at 8% annually, you’ll have around $145,000 by the time you’re 65. All from $50 a month.
It’s not about timing the market or picking hot stocks—it’s about time in the market. And the sooner you start, the better.
Step 1: Shift Your Mindset — Investing Isn’t Risky, Ignorance Is
Here’s the first thing I had to unlearn: “Investing is gambling.”
No, it’s not. Gambling is betting on luck. Investing is building wealth through ownership. When you invest in companies or funds, you’re becoming part-owner of real businesses that generate real profits. Yes, the stock market goes up and down—but historically, it always trends upward over the long term.
If you keep your money out of investing out of fear, you’re actually taking a bigger risk: the risk of not growing your money at all.
Step 2: Choose the Right Account (Where Your Money Grows)
Before you buy any stocks, you need to decide where your money will live. That means choosing the right type of investment account.
Option A: Roth IRA (Best for Long-Term, Tax-Free Growth)
- Who it’s for: U.S. residents with earned income under ~$153k (single) or $228k (married).
- Why it’s great: You invest with after-tax dollars, and your money grows tax-free. That means you won’t pay taxes on your gains when you withdraw in retirement.
- Contribution limit: Up to $7,000 per year (in 2025), but you can start with just $50.
I started my Roth IRA with $100, and I still contribute small amounts each month. It’s a long-term wealth machine.
Option B: Brokerage Account (Flexible, No Contribution Limits)
- Who it’s for: Anyone. No income limits.
- Why it’s great: No restrictions on withdrawals, and you can use it for medium- or long-term goals.
- Catch: You’ll pay taxes on your gains and dividends.
Use this if you’ve maxed out your Roth IRA or want more flexibility with your money.
Step 3: Pick an Investing Platform (User-Friendly + Low Fees)
Now let’s talk where to actually open your account. These are the best beginner-friendly platforms that let you invest with little money and no account minimums:
Stash Invest
- Best for: Beginners who want to learn as they go and invest small amounts
- Features: Allows fractional share investing, includes built-in financial education, and even offers a debit card with cashback.
- Minimum to start: As little as $5
- Why it’s great: It helps you build confidence while investing in real companies and ETFs—even if you’re just starting out.
Heads-up: Stash does charge a monthly fee ($3+), so make sure you’re contributing regularly to make it worth it.
M1 Finance
- Best for: People who want to automate their investing and build custom portfolios
- Features: Lets you invest in “pies,” which are customizable bundles of stocks or ETFs. You can automate deposits and rebalance your portfolio with one click.
- Minimum to start: $100 (or $500 for retirement accounts)
- Why I like it: It’s clean, powerful, and perfect for long-term, passive investors.
Other investment platform to consider: Vanguard, Fidelity, Charles Schwab.
Personally, I started with Stash Invest because of their beginner friendly platform and built-in financial education. Once I got more confidence with investing, I started an individual investment account on M1 Finance. My money kept on growing since I started.
Step 4: Choose What to Invest In (Simple Is Best)
Here’s where most people get overwhelmed. Stocks? ETFs? Mutual funds? Crypto?
Let me keep it super simple: you don’t need to pick individual stocks. In fact, I’d argue that you shouldn’t—especially at the beginning.
Start With These Beginner-Friendly Investments:
Index Funds
An index fund is a bundle of stocks designed to mirror the performance of a segment of the market.
- Best example: S&P 500 Index Fund (tracks 500 major U.S. companies)
- Why it’s great: Instant diversification + low fees
- Examples: VFIAX (Vanguard), FXAIX (Fidelity), SWPPX (Schwab)
ETFs (Exchange-Traded Funds)
Similar to index funds, but they trade like stocks. Many track the same indexes.
- Example: VOO (Vanguard’s S&P 500 ETF)
- Why it’s great: No minimums—you can buy a fraction for as little as $1
Target-Date Retirement Funds
These adjust automatically based on your age. Just choose the year you plan to retire.
- Example: Vanguard Target Retirement 2065 Fund (VLXVX)
These options keep it simple, diversified, and passive.
Step 5: Automate and Chill
Here’s the real magic: automating your investing. Set up automatic contributions—$50/month, $25 every payday, whatever works for you.
This removes the emotional decision-making and keeps your habit consistent.
My Setup: I have $100 auto-transferred from my checking to my Roth IRA weekly. I haven’t missed it once—but I’ve watched it grow.
Step 6: Let Time (and Compound Growth) Do the Work
You don’t need to be checking your investments every day or reacting to the news.
In fact, the less you look, the better.
Here’s why: compound interest is like planting a tree. At first, it feels slow. But over time, it takes root—and eventually grows into something massive.
Check this out:
| Monthly Investment | Annual Return | Time | Total Contributions | Final Value |
|---|---|---|---|---|
| $50 | 8% | 30 years | $18,000 | $68,484 |
| $50 | 8% | 40 years | $24,000 | $146,815 |
That’s with just $50/month.
Now imagine if you increase that amount over time.
Common Investing Myths (That Keep People Broke)
Let’s bust a few myths that I hear all the time from people who are hesitant to invest:
- “I need a lot of money to start.”
Nope. You can start with $5, $25, or $50. - “The market is too risky.”
Historically, the U.S. stock market has always recovered—and grown—over time. - “I don’t have time to learn everything.”
You don’t need to. Just learn enough to invest in a diversified fund and automate it. - “I’ll wait until I have more income.”
The best time to start is now. The second-best time is today.
Bonus Tips to Build Confidence
- Read one book: “The Simple Path to Wealth” by JL Collins is beginner gold.
- Keep it boring. Boring investing is usually the most effective.
Final Thoughts: Start Small, Start Smart, Start Now
When I started investing, I didn’t have thousands sitting in a bank account. I had debt, bills, and a ton of self-doubt. But I made a promise to myself that I’d start where I was—with $50—and stay consistent.
Fast forward to now, and I’ve built a habit that feels empowering, automatic, and aligned with my future goals.
You don’t need to be perfect. You just need to begin.
So here’s your challenge: Open an account this week. Fund it with $50. Invest in a low-cost index fund or ETF. Then set a reminder to do it again next month or set auto transfer to it every month.
Your future self will thank you—big time.