Starting investing when you are young can have a lot of advantages, even when you have little to no money, you should start your investing journey.

It is a myth that you’ll need a lot of money to start investing.

“You can start your investing journey with just less than $100 in your bank, in fact every investor started their investing jouney with little to no money, just like you and me.”

I remember years ago, I brought my first stock with my parents, because I don’t have enough money, and I am not old enough to set up a brokerage account. During that time, I learned a lot of investing lessons the hard way along the way. Although I didn’t officially start my investing journey until I am in my 20s, I grow my investing knowledge as I save up to invest in stocks.

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

Here are the few best ways to start investing your money, and difference in your financial future even if you are a beginner investor and don’t have much money to invest.

9 Best Ways to Invest With Little Money to No Money

Understand that every big investor like Warren Buffett starts by investing a small amount of money. These successful investors were once small investors just like us 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.”

By Antony,

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

Starting 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.

Read Also: Warning Signs of Stock Market Crash

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 investing for your future.

But before I continue on explaining what 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 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 the 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. Bad debt can affect your credit score. People with a bad credit score are seen as higher default risk, and banks may require you to pay a premium in interest for the loan you apply for your mortgage. 
  2. Paying off debt is the best way to have a guaranteed above-average return on your money.

This is especially true if you are having credit card debts. Interest charged by credit card companies 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 locked 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 earned on top of your previous interest earned. As you earn interest, it will be added to your principal 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 -
Pay off Bad Debt

Read Also: How to get out of debt fast?

2. Saving Accounts

Creating a savings in your savings account may not be exciting, but it is one of the best places to accumulate your capital.

Although most banks give little to no interest, putting your money in a savings account allows you to 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 a 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
Savings Accounts

Read Also: Ways to profit from a Market Crash

3. Employer-Sponsored Retirement Plan

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

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

Choose to set a percentage from your paycheck to 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 offer matching contributions 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 exciting?

Generally, an employee pays 15% to 40% in tax. With your contribution that is tax-deductible, you are basically having a 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 between retiring rich as a millionaire or retiring with just enough to get by.

How to Invest With Little Money Employer Sponsored Retirement Plan
Employer-Sponsored Retirement Plan

Read Also: What are the risk and benefits of investing in Real Estate Index Trusts (REITs)?

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

Although there are no employer matching contributions, a 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
Retirement Plan

Read Also: How to prepare for a market crash by age?

5. U.S. Treasury Bonds

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

The government will be committed to paying 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 as a fixed deposit of the bank, without the downside of early withdrawal penalties. 

How to Invest With Little Money - US Treasury Bonds
U.S. Treasury Bonds

Read Also: How to make $50,000 passive income for retirement?

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 pay 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 a brokerage fee. Companies that offer DRIPs allow 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 has to be taken, as all investment comes with a certain level of risk.

  • Only invest in a great dividend-paying company.
  • Do a 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
Dividend Reinvestment Plan

7. Low Fee ETFs

Exchange-Traded Funds (ETFs) allow 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 allow you to invest much more safely.

Why invest in ETF stocks?

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

A great tip on buying a good ETF will be choosing an ETF 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 ETF to start on your investment journey.
  2. Read books and articles on investing and learn from the experience of others.

Enrich yourself in the knowledge of 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
Low Fees ETFs

8. Invest in Your Own Business

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

With the advancement in the 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 who start up their business with just over $100.

The $100 Startup - Chris Guillebeau -

The $100 Startup, By Chris Guillebeau

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

Not only does the author makes each start-up story fun to read, but there are also 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, in the past when you need tens of thousands of dollars to start a business, nowadays you can start a business with just $100 in the bank.

How to Invest With Little Money - Start Own Business
Start Your Own Business

9. Invest in Yourself

You are your own best investment.

Investment in your own education and enriching your knowledge is the best investment you can ever make. 

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

All these new skills and knowledge you learn can possibly bring your career up to 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 learned can help you in either getting a promotion or giving you an opportunity to get into a higher-paying job.

What do you need to invest in yourself?

  • Time to dedicate yourself to learning that new skill.
  • Discipline to learn the skill well.
  • An 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 inspires 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
Invest in Yourself

Read Also: Are dividend stocks good for young investors?

Can You Start Investing With Little to No Money?

You can start investing even when you have little money to spare because not all forms of investment is solely depending on how much money you have, but how well you utilize what you have to become something more.

Investing does not require you to have millions of dollars.

If you want to start your investing journey, $100 is enough for you to start investing.

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

  1. Pay of Debt
  2. Savings 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 the things you know from reading our articles will help you in your investing journey.

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

By Will Durant

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