How to Start Investing with Just $100

A lot of people think they need thousands of dollars to start investing — but the truth is, you can start with as little as $100. The earlier you start, the more time your money has to grow. Whether you’re 16 or 55, investing even small amounts now can make a huge difference later. This post is targeted toward those with little to no investment experience to help you get started without getting overwhelmed by the endless advice online that only stands to benefit their investments.  

In this post, we’ll walk through:

1. How to start investing 
2. Which accounts to use
3. What to consider investing in
4. How to think long-term 

Step 1: Pick the Right Type of Account

If you want to grow wealth over time, I recommend starting with a retirement account — either a 401(k) (if your employer offers one) or an IRA (Individual Retirement Account). These accounts come with tax advantages and encourage you to keep your money invested long term. 

401(k): Best for Employees

A 401(k) is an employer-sponsored retirement plan. Contributions are automatically deducted from your paycheck and often matched by your employer (usually up to a percentage of your salary). 

• Traditional 401(k): Contributions are pre-tax, lowering your taxable income today. You’ll pay tax when you withdraw the money in retirement.
• Roth 401(k): Contributions are made with after-tax dollars, but withdrawals in retirement are tax-free.

If your employer offers a match, always try to contribute at least enough to get the full match — that’s free money and an instant 100% return.

IRA: Best for Individuals or Side-Income Earners

If you don’t have access to a 401(k) or don’t know how long you’ll be at your job to warrant contribution to a 401(k), you can open an IRA through most brokerages (Fidelity, Vanguard, Charles Schwab, etc.).

• Traditional IRA: Works like a 401(k) — contributions may be tax-deductible, and you pay taxes later.
• Roth IRA: You pay taxes now, but your earnings and withdrawals in retirement are completely tax-free.

For younger investors who expect to earn more over time, a Roth IRA often makes sense — you lock in today’s lower tax rate and enjoy tax-free growth for decades.

If you already have all available retirement accounts maxed out, or you will need the money before retirement, but not in the next 5 to 10 years, then consider contributing to a brokerage account. Just note, you may have to pay tax on dividends and capital gains, depending on your income levels.

Step 2: Remember — Contributions Aren’t Automatically Invested

This is a common mistake for first-time investors: just because you put money into your 401(k) or IRA doesn’t mean it’s actually invested yet. After contributing, you must choose your investments within the account. If you don’t, the money might just sit in a cash or money market fund, earning almost nothing.

When you log into your retirement account, look for investment options like:

• Target date funds (e.g., “Vanguard Target Retirement 2060 Fund”)
• Index funds (VOO, SPY, QQQ, etc.)
• Mutual funds that track the S&P 500 or total market

If you’re unsure where to start, index funds are often the easiest and most effective first step.

Step 3: Choose What to Invest In

1. Index Funds and ETFs

For most new investors, index funds or ETFs (Exchange-Traded Funds) are ideal. The wise Warren Buffett has repeatedly expressed this. Unless you’re analyzing stock daily and keeping up on current company information, Index Funds and ETFs are the way to go.

These funds track a market index — like the S&P 500 — meaning you’re investing in hundreds of companies at once rather than trying to pick individual winners.

Examples of popular, low-cost funds:

• VOO – Vanguard S&P 500 ETF
• SPY – SPDR S&P 500 ETF
• QQQ – Nasdaq-100 ETF (focuses on tech-heavy companies)

Doing a quick Google search will provide you with many more options; these are just a few of the bigger names. When comparing funds, pay attention to the expense ratio — the annual fee you pay for management and the return each fund has historically provided.

For example, VOO’s expense ratio is just 0.03%, meaning you pay only $0.30 per $1,000 per year, and it has returned approximatelyly 15.26% over the past 10 years. QQQ’s expense ratio is around 0.20% and has returned approximately 19.56% over the past 10 years. With QQQ, the return is higher, but the expense is also higher. Depending on whether you prefer higher returns, but higher expenses, or slightly lower returns but reasonably lower expenses determines which funds you deem appropriate. Most funds will show the expense ratio and returns before you purchase, but you can also find all the information you need to know for each fund online.

If you’re just starting, lower fees and long-term consistency usually beat trying to chase big returns.

2. Consider Stable, Long-Standing Companies

If you prefer buying individual stocks, focus on established, stable companies — those that have been around for decades, have strong brand loyalty, and dominate their industries.

Examples include: Walmart, Amazon, McDonald’s, Coca-Cola, Microsoft

These companies are less volatile than smaller startups, making them a solid foundation for new investors who want to learn without taking extreme risk.

You can even invest in fractional shares, meaning you don’t need $3,000 to buy a whole share of Amazon — you can buy just $10 or $20 worth at a time through most modern brokerages.

3. Invest in What You Know (and Use)

One fun and personal way to start investing is to buy shares of companies you actually use and believe in. For example, my wife likes to shop at Target. While I haven’t done much financial research into them, we go there often enough and spend a decent amount of money, so on occasion, I’ll match whatever we spend and invest it. If you believe in a company enough to purchase its goods or services, then that company could be worth investing in.

This approach isn’t about strict financial analysis — it’s about building awareness and interest in investing. Sometimes these investments turn out great (like with Target), other times they flop (like with Sears or ShopKo). When you own a piece of a company you like, you start paying attention to its business, earnings, and growth. Over time, that curiosity becomes financial literacy.

Step 4: Tailor Your Strategy to Your Age

Your investment goals change over time, and so should your strategy. We’ll start at 18 since that’s where you can make financial decisions on your own without parental supervision or guidance, but for the young investors, just know that the same basic rules apply.

Ages 18–40: Growth-Focused

If you’re in this range, time is on your side. You can take more risk because you have decades to recover from market dips. A couple of key points:

• Prioritize Roth IRA or Roth 401(k) contributions.
• Contribute consistently, even small amounts.
• Focus on stock-heavy portfolios or index funds that match the total market.

Contributing to retirement accounts is your best starting point. If you max out retirement accounts, consider using a brokerage account. The market has its ups and downs, but if you keep putting in, let’s say, $100 a month. Your portfolio will ebb and flow with those peaks and drops in the market. Finally, consider stock-heavy portfolios – whether that’s through stock index funds or individual stocks, you can afford a bit more risk for potentially higher returns. While index funds are the safest bet when investing in stocks, you can also choose to invest in individual companies to help yourself learn how the market works and what makes companies valuable. Again, you have time on your side, so if an investment flops, you have plenty of time to recover before retirement. You may also consider Crypto, but before doing so, just know that Crypto is super volatile, so be prepared for massive swings in value.

Ages 40–55: Balanced Growth

This is the stage where you might start mixing growth with some safety. Here are some important considerations:

• Balance between stocks and bonds (e.g., 70/30 or 60/40 portfolio).
• Keep contributing, but start thinking about protecting gains.
• Still use Roth accounts if your income allows — tax-free withdrawals later can be powerful.

At some time during this age group, it’s time to consider moving to a more stable income allocation for retirement, depending on when you want to retire and how much you need. You will still want to be more heavily invested in stock-based assets, but moving some of that to CDs or bonds may be beneficial because you will need this money available for retirement and can’t afford to take the large market dips. Contributions will still prove to be beneficial during this age–especially if you haven’t started. Many retirement accounts offer catch-up contributions for those 50 or older, but don’t wait until then to get started–the longer your money is in the market, the more time for it to grow. 

Ages 55+: Income & Preservation

At this stage, your focus shifts from growth to stability and income. Consider the following:

• Look for high-dividend-paying stocks, bond funds, or CD ladders.
• Prioritize capital preservation and reliable income streams.
• Keep some equity exposure to outpace inflation, but reduce volatility.

You want to be able to enjoy retirement–take that grand vacation you’ve always dreamed about, eat out at all your favorite restaurants, spoil your grandkids–and it’s difficult to do that if your asset base drops suddenly. High-dividend-paying stocks, bonds, and CDs are the best for asset protection. Additionally, they provide a steady stream of passive income, allowing you to live off the dividends and interest instead of the sale of stocks–protecting your assets. You may still consider having some growth stocks, but the majority of your stocks should be in dividend stocks since those preserve value and provide stable income. Most of your portfolio will be in bonds or bond funds and CDs, as these provide the safest return of value, while still matching or slightly outpacing inflation.

Step 5: Use Investing Apps and Automation

If you’re not sure where to start, modern tools make it easy to automate.

• Brokerages like Fidelity, Vanguard, Schwab, and many others let you open an IRA in minutes.
• Micro-investing apps like Acorns, SoFi, Stash, and many others allow you to invest spare change or small recurring deposits automatically.
• Set up auto-invest to contribute $10–$25 per week — you won’t even miss it, and consistency beats timing.

Step 6: Keep Learning and Stay Consistent

Investing isn’t about timing the market — it’s about time in the market. The earlier you start, the more compound growth works for you.

Let’s say you invest $100 today and add just $25 every week ($1,300 per year).
At an average 8% return, after 20 years, you’d have roughly $62,000 — built from small, steady habits.

The key?

• Don’t panic when markets dip.
• Keep contributing.
• Reinvest your dividends.
• Revisit your goals once or twice a year.

It’s easier said than done, but half of investing is having the discipline to not lose sight of your goals when your portfolio starts diving. Long term, the market has provided great returns–you just have to be able to hold strong through the short-term volatility.

Final Thoughts

You don’t need a fortune to start investing — you just need to start.
With $100, you can open a Roth IRA, buy into an index fund, or own a piece of a company you admire. The important part isn’t how much you start with, but that you take the first step and keep going.

If you start now and stay consistent, you’ll give yourself a powerful head start on building long-term wealth — one small investment at a time.

— Brendan Tiedeman, CPA