You start investing with little money.

In fact, you can start investing with just 100 dollars. It is a myth that you’ll need a lot of money to start investing.

I started my investing journey when I only have less than $100 in bank.

Slowly but gradually, I start to invest in different things and build my portfolio and grow my wealth.

If you are like me, with little money to invest.

Here are the few best ways to invest your money wisely for beginners.

Let’s make a difference in your financial future even if you don’t have much money to invest.

9 Best Ways to Invest With little money

Understand that every big investor like Warren Buffett start by investing small amount of money.

They were small investor just like you, before they become rich and successful.

What’s important is that you have to start investing as early as possible.

Going out of your comfort zone and start investing is hard.

But once you’ve start investing, you’ll find investing to be pretty simple.

(I totally understand how hard it is to start when you have little money to spare, because I started my investment small as well!)

Start investing at a young age is important if you want to be wealthy. The more time your money is in the market, the more time you’ll allow your money to compound.

1. Pay Off Debt

Paying off your debt will be the first and most important thing you should do when you have little money to invest.

But wait, is that investing?

Yes, paying off debt is invest for your future.

But before I continue on explaining what do I mean by investing for your future, you need to understand a bit more about debt.

Different types of debt

  1. Bad Debt – Debt that takes money from your pocket
  2. Good Debt – Debt that helps you earn money

Here when I mention about paying off debt, I am talking about paying off the bad debt you got from your payday loan, credit card debts etc.

To understand more about bad debt and good debt you can check out our article on good debt vs bad debt.

Why it is important for you to pay off all bad debt when you have little money to invest?

  1. First, bad debt can affect your credit score. People with a bad credit score are seen as higher default risk, which banks may requires you to pay a premium in interest for the loan you apply for your mortgage. 
  2. Secondly, paying off debt is the best way to have guaranteed above average return on your money.

This is especially true if you are having credit card debts. Interest charged by credit card company is in the double digits.

Let’s say you have credit card debt of $1,000 with an interest rate of 12% per annual. 

By simply paying off your credit card debt, you have just lock in a guaranteed 12% return on your money!

There is no guaranteed invest that gives you a double digit return on your investment anywhere, apart from paying off your debt.

Paying off bad debt can let compound interest work for you.

How does compound interest work?

Compound interest is interest that is earn on top of your previous interest earned. As you earn interest, it will be added to your principle and previously earned interest. This will be totaled for the next interest earned. Compound interest will allow you to earn more interest over time.

  1. Compound interest can work for you, when you invest and grow your money over time.
  2. Compound interest can work against you, when you take up debt and grow your total amount of debt over time.
How to Invest With Little Money -

2. Saving Accounts

Saving account may not be exciting, but it is one of the best place to accumulate your capital.

Although most banks give little to no interest, putting your money in the saving account allows you accumulate your capital and prepare for a good investment opportunity in the future.

Most importantly, putting money in your saving accounts helps you to build up your emergency fund.

Investing your money to build an emergency fund is important.


Because having an emergency fund is an investment in your financial security.

Emergency fund can prevent you from being forced to sell your investment at a bad time because of some unforeseen events.

Having 0-1% return from bank’s interest may not sound exciting.

But with the added benefit of acting as an emergency fund, this is an investment you should consider.

How to Invest With Little Money - Saving Accounts

3. Employer-Sponsored Retirement Plan

Probably the easiest way to invest is to join the employer-sponsored retirement plan.

Basically, you’ll just need to set-up a payroll deduction plan with your employer.

Choose to a set a percentage from your paycheck contribute to the retirement plan. How much you choose to contribute, depends on your needs and level of comfort.

You can either choose as low as 1% to as high as 20% of your salary. Sometimes, the percentage allowed is also dependent on each company.

If you are lucky, some companies offers matching contribution for each dollar you put into the retirement plan. It is basically free money for your retirement.

And here is something even more exciting than free money.

Tax benefits!

Not only all your contribution is tax-deductible, but what you earn from your investment through this employer-sponsored retirement plan will not be subjected to income-tax until you withdraw your money at your retirement.

Why tax benefit is it exciting?

Generally, an employee pays 15% to 40% in tax. With your contribution that is tax-deductible, you are basically having 15% to 40% return on your investment.

Furthermore, you will have an opportunity to allow 15% to 40% more of your money to compound for the next 30 to 40 years.

This can mean the difference of retiring rich as a millionaire, or retiring with just enough to get by.

4. Retirement Plan

Retirement planning should start as early as possible, even when you have little money to invest.

When you are at the age of 60. You may want to thank yourself for starting your retirement planning early.

You may be self-employed, or your company does not offer you employer-sponsored retirement plan. You can still plan your retirement with either a traditional IRA or a Roth IRA.

Why is it good to invest in IRA or a Roth IRA?

Similar to employer-sponsored retirement plan, IRA or a Roth IRA allows you to have a tax-free compounding on your investment.

Although there is no employer matching contributions, traditional IRA or a Roth IRA can be held in a brokerage account that offers much more investment alternatives.

Investment compounded for 30 to 40 years can be a huge retirement sum.

How to Invest With Little Money - Retirement Plan

5. U.S. Treasury Bonds

U.S. Treasury bonds (T-bond) are marketable, fixed-interest government debt securities.

The government will be committed to pay the owner of the bond on the fixed-interest for a certain number of years.

At the end of maturity, the government will pay the owner of the bond their principle.

Investing in U.S. Treasury bonds is commonly regards as a risk-free investment due to very little risk of the government defaulting the bond.

With as low as $100, you can start subscribing to these T-Bonds.

What’s more, you can sell your bonds anytime with no early withdrawal penalties.

You can view it like a fix-deposit of the bank, without the downside of early withdrawal penalties. 

How to Invest With Little Money - US Treasury Bonds

6. Dividend Reinvestment Plan

Dividend Reinvestment Plan (DRIP) automates your reinvestment of the dividend you get from the stock to buy more of the company’s shares. 

DRIP is usually available for stocks that pays a dividend.

Is DRIP investing worth it?

Yes, DRIP plans are worth it and reinvesting your dividend will benefit you more than taking cash if you are a passive investor. Unlike buying stock from the open market, where there will be brokerage fee. Companies that offers DRIPs allows you to reinvest into their companies without any form of fees.

Even with little money to invest, DRIP allows you to grow your portfolio over time.

Best advantages of DRIP is that, it allows you to perform dollar cost average (DCA) automatically.

DRIP is a totally passive way of investing that you can let it grow for years till your retirement.

DRIP is a good option for passive investors who want a more hands-off approach to investing.

But caution have to be taken, as all investment comes with a certain level of risk.

  • Only invest in a great dividend paying company.
  • Do periodic review of your investment at least once per quarter.

You can learn how to find a good dividend paying stock in my other articles.

How to Invest With Little Money - Dividend Reinvestment Plan

7. Low Fee ETFs

Exchange Traded Funds (ETFs) allows you to invest in a bucket of stocks that represents that sector or industry. 

Investing in EFTs is especially good for investors who don’t know much about investing but wish to start their investing journey.

With a limited amount of investing knowledge and cash, ETFs allows you to invest much more safely.

Why invest in ETF stocks?

ETF stocks offer lower operating cost than traditional mutual fund, where an ETF allows you to diversify your portfolio to a bucket of stocks which helps to reduce your risk.

Great tip on buying a good ETF will be choosing an ETFs with low fees.

Fees alone can cause you thousands of dollars when you add them all up years later.

Beginner investors should not pick stocks, as they are very likely to commit one of the 7 deadly sin of beginner investors. Which may end up losing all their money.

Instead, you should start your investing this way:

  1. Buy a low fee ETFs to allow youself to start on your investment journey.
  2. While you are investing, read up books and articles on investing like this one.

Enrich yourself on the knowledge on investing before you start buying individual stocks.

Knowledge is the difference between, getting a profit from investing and losing from investing.

How to Invest With Little Money - Low Fees ETFs

8. Invest in Your Own Business

Invest in your own business might sometimes be the best way to invest instead of investing in other’s business.

With the advancement in internet and changes in the current world. You can easily start your own business with just over $100 dollars.

In fact, there is actually a book written by Chris Guillebeau that told the stories of business owners which start up their business with just over $100.

The $100 Startup - Chris Guillebeau - incomebuddies.comThe $100 Startup

This is one of the best book I have ever read on business startup, and probably you should too.

Not only the the author makes each start-up stories fun to read, there are many things to learn from the different business owner, who start up their business with just over $100, and build them into a 5 figure business.

Starting a business might just be the best investment you can make.

Unlike, the past where you need tens of thousands of dollars to start a business, nowadays you can start a business with just $100 in bank.

How to Invest With Little Money - Start Own Business

9. Invest in Yourself

You are your own best investment.

An investment on your own education and to enrich your knowledge is the best investment you can ever made. 

Learn a new language, a new course on computer application, or even read a life changing book from my library

All these new skills and knowledge you learn can possibly bring your career up into the next level.

It is totally possible for you to acquire a certain life changing skill within a few months, or even days.

These new skills you’ve learn can help you in either getting a promotion, or gives you an opportunity to get into a higher paying job.

What do you need to invest in yourself?

  • Time to delicate yourself into learning that new skill.
  • Discipline to learn the skill well.
  • Open mind to challenge yourself out of your comfort zone.

What can you do to invest in yourself?

  • Take the course that teaches you a new skill.
  • Read an article that inspire you to dream big.
  • Buy a book and learn from the experience of the author.

Investing in yourself is not only simple to do, but it is the best way to change your life for the better.

How to Invest With Little Money - Invest In Yourself

My Takeaway

Investing does not requires you to have millions of dollars. You can start investing even when you have little money to spare.

$100 is enough for you to start investing.

Most importantly, you have to move out of your comfort zone and start on something.

Slowly, but eventually, you will succeed.

Here are the 9 best ways to start investing with little money:

  1. Pay of Debt
  2. Saving Accounts
  3. Employer-Sponsored Retirement Plan
  4. Retirement Plan
  5. U.S. Treasury Bonds
  6. Dividend Reinvestment Plan
  7. Low Fees ETFs
  8. Invest in Own Business
  9. Invest in Yourself

Investing is never easy, but with the things you know from reading our articles, it will help you in your investing journey.

Successful investors like Warren Buffett read approx 500 pages a day.

Knowledge on investment can be learn from books or articles like this one. Reading can only make you wiser and smarter, so that you too maybe able to make the right decision in your investment.

Will Durant Said:

“Education is a progressive discovery of our own ignorance.”


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Disclaimer: I am not your financial adviser or lawyer, information found in our website are just my opinions. You should always ask your financial adviser or lawyer for any financial or law related advice.

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