Small Investment Ideas for Investing With Little Money

Investing can be an intimidating topic. Unfortunately, many people think they don’t have enough money to invest, so they simply do nothing.

The truth is, you don’t need to have a lot of money to get started with investing. Yes, some investments will not be accessible or appropriate for you as a new investor, but there are still plenty of excellent options.

Don’t wait until you have more money to get started, or you’ll miss out on valuable opportunities.

In this article, we’ll look at 15 small investment ideas that allow you to start with as little as just a few dollars.

Small Investments That Make Money

Whether $50, $100, or $500, there are plenty of good small investment ideas that will produce solid returns for you.

Please note: This article provides ideas, not personalized investment advice. If you’re looking for advice or guidance, please reach out to a professional who can give you customized advice for your situation.

1. Invest in Fractional Shares

Traditionally, one of the major roadblocks that prevented new investors from investing in the stock market was the share price of popular stocks. Thankfully, today there are a growing number of apps and online brokerages that allow you to invest in fractional shares of your favorite stocks.

Want to invest in companies like Amazon, Google, or Apple but don’t have hundreds or thousands of dollars to purchase a full share? No problem. You can buy a fractional share, or as Public.com calls them, a ‘slice of stock.’ Buy a stock slice and own a stock proportional to that dollar amount.

Public.com is one of our favorite platforms, and it’s extremely friendly to new investors. You can purchase fractional shares of stocks, ETFs, and cryptocurrency, and you’ll pay no commissions for the trades. In addition, Public.com has no minimum balance requirement, so there’s no reason not to get started. Get a free slice of stock (up to $300 value) for creating a Public.com account.

When you’re purchasing fractional shares, the key to long-term growth is to keep investing whenever and whatever you can. Since you don’t have to wait until you have enough money to purchase a full share of stock, you can transfer $5 or $10 at a time whenever you’re able and buy fractional shares of your favorite stocks.

2. Take Advantage of Free Stock Offers

Right now, several investment apps and platforms offering free stocks or bonus money to invest as an incentive for new users to create an account. These signup bonuses provide an easy way to get started. You’ll only need a few dollars to fund your account and take advantage of the free bonus. Who doesn’t love free stock?

Here are some of our favorite current bonus offers:

• Webull offers up to 12 free stocks worth up to $30,000.
• Public.com offers up to $300 of stock for new users.
• Moomoo offers up to 5 free stocks worth up to $2,500 each.
• Robinhood offers a free stock valued at $2.50 – $255.
• Tornado offers a bonus of $10 – $1,000 to invest.
• M1 Finance offers $50 if you fund your account.

Please note: You’ll need to signup by using the referral links above to qualify for the bonuses.

Public.com offer valid for U.S. residents 18+ and subject to account approval. This is not a recommendation. You can lose money with any investment. Open To The Public Investing is a member of FINRA & SIPC. Regulatory and firm fees apply. New customers receive free stock with value $3-300; 0.3% receive the max value.

Most of these investment apps have no account minimum and commission-free trades. The apps are for new investors, so they’re simple to use.

With no minimums and no fees, there’s nothing that prevents you from starting right away. And, you can see even more ways to get free stocks here.

3. Buy Dividend Stocks

If you’re not sure how to start investing, one popular option is to focus on dividend-paying stocks. When publicly traded companies earn a profit, they have the option of reinvesting the gains into the business, or they can pay investors by issuing dividends (or a combination of both).

Younger companies in aggressive growth mode will choose to reinvest the profits, but many older, more established businesses will share profits with investors through dividends. There are hundreds of companies that have strong track records of consistently paying dividends to shareholders.

These companies that pay dividends are generally solid investments that are likely to produce more stable returns and are viewed as lower risk than the general stock market. While purchasing individual stock always carries risk, these established companies generally experience less volatility than growth stocks.

As an investor, you’ll have an option to receive the dividends as cash, or you can have them automatically reinvested. The reinvested dividends purchase more shares, which allows you to earn even more dividends in the future. If you’re a long-term investor, reinvesting dividends is the best approach. With dividend stocks, you’ll benefit when the share price increases, plus you’ll benefit from the dividends.

To get started, see these lists of Dividend Kings and Dividend Aristocrats. The companies on these lists have excellent track records of consistently paying dividends.

Investing in dividend stocks is easy. Thanks to apps like Public.com, Robinhood, and Webull, you can get started with as little as a few dollars by purchasing fractional shares.

4. Invest Automatically

As we’ve seen already, you don’t need a lot of money to start investing. It’s possible to begin with as little as a few dollars. To grow your investment over the long-term and turn it into something significant, the key is to keep adding new money, and the best way to do that is by automating.

When it comes to automated investing, M1 Finance is our favorite platform. M1 helps you to automate your investing in several different ways:

• You can set up automatic contributions on any schedule that works for you. Add money to your account weekly or monthly based on your cash flow.
• M1 Finance will automatically invest according to your preferences. They offer more than 80 expertly-created portfolios that you can choose from or create your own. Whenever you add money to your account, it’s automatically invested based on your selected portfolio.
• M1 Finance will automatically place the trades for you. If you’ve set up automated contributions, there’s nothing you need to do, so it’s straightforward.
• Dynamic rebalancing allows you to tell M1 Finance to rebalance your investment portfolio at any time automatically.

All of the features listed above are available through a free M1 Finance account. In addition, there are no management fees, and the trades are commission-free. We love M1 Finance because it simplifies the investing process and because there are no fees, allowing your money to grow and compound faster.

5. Real Estate Crowdfunding

Contrary to what you might think, you don’t need a lot of money to get started with real estate investing. There are a few different ways you can invest in real estate with smaller amounts of money, and crowdfunding is one of the most straightforward and most practical options.

Many of the leading real estate crowdfunding platforms are only open to accredited investors, but there are also some options that are available to anyone (see my article Real Estate Crowdfunding for Non-Accredited Investors). Some types of alternative investments require larger sums of money to get started, but with real estate crowdfunding, you can get started with as little as $10.

In some cases, you’ll invest in online REITs (Real Estate Investment Trust) or portfolios of properties, and in other cases, you’ll invest in a specific property.

Fundrise

Fundrise is one of the most popular real estate crowdfunding platforms. By investing in Fundrise, you’ll be investing in a portfolio of income-generating assets rather than investing in a single property. In addition, it’s a totally hands-free investment, as Fundrise handles all the work for you. For those looking to get started with real estate investing, Fundrise is an excellent choice. Please see our Fundrise review for more details.

Groundfloor

Groundfloor is another real estate crowdfunding platform that’s ideal for beginners. With Groundfloor, you can start investing in real estate for as little as $10, perfect for investing smaller amounts of money. Unlike Fundrise, Groundfloor allows you to invest in individual properties. Instead, it’s a peer-to-peer lending platform where house flippers can get short-term loans to renovate houses for resale. Historically, Groundfloor investors have earned an average of about 10% interest.

Arrived Homes

Arrived Homes is a relatively new platform that allows anyone to invest in rental properties. You can buy shares of rental properties for as little as $100 and earn passive rental income, plus appreciation. It’s an excellent option for those who want to own rental properties but don’t want the headaches of being a landlord.

6. Robo Advisors

Whether you want to invest within an IRA or just a regular taxable account, using a robo advisor is a good option for just getting started. A robo advisor will ask you a series of questions about Whether you want to invest within an IRA or just a regular taxable account, using a robo advisor is a good option for just getting started. A robo advisor will ask you a series of questions about yourself and your goals (including your age, level of risk tolerance, when you plan to retire, etc.) and make investment decisions based on your situation. The goal is to maximize the rate of return while managing risk based on your situation and preferences.

Using a robo advisor is an excellent choice if you’ve been putting off investing because you feel like you don’t know enough about how to invest your money. The robo advisor will do the work for you, which is perfect if you have a busy schedule.

Another reason to consider a robo advisor is that you can get started without needing a lot of money to invest. Here are a few of the leading investment options:

• Titan ($100 minimum)
• Betterment (no minimum)
• Wealthfront ($500 minimum)

7. Your Employer-Sponsored Retirement Plan

Possibly the easiest way to get started with investing is to set up automatic contributions to a retirement plan made available through your employer, such as a 401(k) or 403(b). According to Census Bureau statistics, 79% of American workers have access to a 401(k) plan, but only 41% of those who have access actually contribute (source).

If a 401(k) or 403(b) is available to you, you can elect to contribute a specific percentage of your wages, and it will be taken out automatically before each paycheck. Automated contributions are outstanding because they will happen with no other action from you once set up. So you’re not going to forget to make the investment or decide to spend the money on something else.

Contributing to a 401(k) or 403(b) employer plan can also reduce your taxable income, so you’ll wind up paying less in taxes and keeping more of your money.

Another reason why this is an excellent option for new investors is that you don’t need a chunk of money to get started. You can fill out a form with your employer’s HR department and start contributing just a small percentage of your wages going forward, even if you currently have nothing set aside to invest.

Most employers will offer a match, and it’s recommended that you contribute enough to get the entire match. For example, if your employer will match your contributions up to 5% of your wages, you should contribute at least 5%. So between your contributions and the match, you’ll be contributing 10% of your pay to the retirement plan.

8. IRAs

There are a few different types of Individual Retirement Accounts (IRAs), with the most popular being the Traditional IRA and the Roth IRA. Your contributions to a Traditional IRA will reduce your taxable income (if you meet the qualifications). Your investments in a Traditional IRA will grow tax-free, and you will be taxed when you take the money out of the IRA in your retirement.

Contributions to a Roth IRA will not reduce your taxable income now, but you’ll never be taxed on the growth, and you will not be taxed when you take the money out in your retirement.

The 2021 contribution limits of $6,000 (if you’re under 50) or $7,000 (if you’re 50 or over) apply to both Traditional and Roth IRAs. That is the total amount you can contribute to either type of IRA or a combination of both types.

While anyone can contribute to a Traditional IRA, contributions will not be tax-deductible if your income exceeds a specific limit. The limits are based on modified adjusted gross income (MAGI).

Some income requirements restrict who is eligible to contribute to a Roth IRA. The restrictions below are also based on modified adjusted gross income (MAGI):

• Single individuals with an income over $125,000 are not eligible.
• Single individuals with incomes between $125,000 and $140,000 can contribute a reduced amount.
• Married couples filing jointly with income over $198,000 are not eligible.
• Married couples filing jointly with income between $198,00 and $208,000 can contribute a reduced amount.
• Married couples filing separately are less likely to be able to contribute to a Roth IRA. See this page for details.

You can invest in many different things within an IRA. For example, you could choose to open a Certificate of Deposit (CD) with a local bank or online bank within an IRA. For example, you could open an IRA with a financial institution like Vanguard, Fidelity, Charles Schwab, or another brokerage and invest in mutual funds or ETFs. You could also invest in individual stocks within an IRA.

Each institution will have guidelines related to minimums, but you don’t need much money to get started with an IRA. For example, you can open an IRA at Betterment with no minimum, so there’s no excuse not to get started.

9. Peer-to-Peer Lending

Peer-to-peer lending is another excellent option for investing a small amount of money. The two leading platforms are Prosper and Lending Club, and both allow you to get started for as little as $25.

If you’re not familiar with peer-to-peer lending, it allows people to get loans without going through a bank. Instead of a traditional loan from a bank, people can borrow money from other people, like you and me. As an investor, you can make money from the interest that is charged on the loans.

There are pros and cons to peer-to-peer lending. The pros include:

• Easy to get started
• Low minimum investment
• Potential for good returns

The cons include:

• Risk
• Not liquid
• Can take some time to choose the loans you want to invest in

If you’re interested in getting started, I recommend reading An Investor’s Guide to Peer-to-Peer Lending.

10. Build Up Your Savings

It may not be the most exciting investment, but simply putting money into a savings account is also an excellent place to start and offers low risk. If you’re using a savings account, be sure to choose a high-yield account that will allow you to earn a decent interest rate. Many online banks, like CIT Bank, offer rates far higher than what you will make with most local banks.

You can build up your savings for many different purposes, like establishing an emergency fund, saving up for a more significant investment, saving for a house, or any other goal.

You can open a savings account at CIT Bank with $100, so you don’t need a lot to get started.

11. Invest in ETFs

Exchange-Traded Funds, ETFs, are an excellent choice for buy and hold investments. If you prefer a passive approach to investing and you have a long-term focus, you may want to consider investing in ETFs. Many ETFs are intended to track a specific market index, like the S&P 500, so you’ll be getting some diversification in your portfolio by investing in a single fund.

One of the reasons why ETFs are so popular is because the fees and expense ratios tend to be very low (generally, lower than mutual funds). This is ideal for long-term investments because it allows your money to grow and compound faster.

The price of ETFs varies depending on the fund you want to invest in. Many ETFs have a cost of around a few hundred dollars or less. However, with platforms like Public.com and M1 Finance, you can buy fractional shares of ETFs with an initial investment as low as $1.

If you’re not sure which ETFs to buy, please see our list of the best ETFs for long-term growth for some ideas.

12. Invest Your Spare Change

One of the easiest ways to start investing is by using your spare change. Acorns is a popular investing app that rounds up your purchases to the nearest dollar and invests the difference for you. You’ll barely notice the difference, and you’ll start building your portfolio on autopilot.

Acorns is a very hands-off way to start investing. Once it is set up, which only takes a few minutes, it requires no effort from you. Your money will be invested into a diversified portfolio created by the experts at Acorns.

Of course, you can also make other contributions to your accounts instead of simply relying on the spare change from the products you purchase. You can set up recurring transfers or contribute any time you’re able.

13. Invest in Your Own Business

So far, we’ve looked at some conventional options like savings accounts, stocks, and retirement accounts. Another option would be to invest in yourself and your own business. Believe it or not, you don’t need a lot of money to start an online business.

I’ve been self-employed through my internet-based business since 2008, and I started it with less than $100. You can quickly start a blog or website with very little investment. For just $2.95 per month (if you sign up through this link) for web hosting with Bluehost, you can have your own website or blog.

Investing in your business is also different from all of the other options here because it will involve some work as well as investing a small amount of money, but the potential payout is unlimited. You’ll be creating an income stream that could far exceed what you would earn from a traditional job. The first blog that I started with less than $100 wound up making me more than $1 million.

If you’re interested in starting an online business, see my articles How to Start a Blog and How to Make Money Blogging for Beginners.

14. Invest in Your Skills

Another way to invest in yourself is to pay for training that teaches you a new skill and allows you to make even more money in the future. In terms of ROI, this can be one of the best options on this list.

You could take countless online courses if you want to learn new ways to make money online, but here are two that we highly recommend.

• Transcribe Anywhere provides the best training for anyone interested in making money as a transcriptionist. If you have some typing skills, this is an excellent option. You’ll be able to make money from home (or anywhere) and enjoy a completely flexible schedule.
• 10K VA is the top course for learning how to monetize your existing skills and make a high income as a virtual assistant (VA). This is an ideal option right now because there’s a huge and growing demand for skilled VAs.

15. Learn Something New

If you’re looking for very inexpensive products that serve as an investment, one of the best ways to learn something new is to purchase a book. Many books cost less than $20. The lessons you’ll learn might help you learn to invest better or learn new ways to make more money, which can be invested.

Here are some of the best books on making money.

Bonus Idea: Use Bumped

Here’s a bonus idea that doesn’t involve an initial investment but still helps build your portfolio.

Bumped is a new mobile app that allows you to earn stock based on your purchases. It works similar to a cashback program, except instead of cash, you earn stock!

When you sign up for Bumped, you’ll create your account and link your debit card or credit cards. Then, when you make purchases at stores and websites that participate in their program, you’ll earn stock in those companies.

There are no fees to use Bumped, and all you need to do is take a couple of minutes to link it to your cards. So it’s an effortless way to get some extra rewards and to start investing.

If you like earning cash back and rewards from your purchases, you will love Bumped. And best of all, it doesn’t interfere with your other rewards and cashback, so you can stack the rewards for an even bigger impact.

Final Thoughts

If you’ve ever felt like you don’t have enough money to start investing, hopefully, this article has convinced you that there are several viable options to start investing with a small amount of money. You don’t need thousands of dollars to get started. Any of these options would be an excellent place to begin, so choose the one that seems most appealing to you and take steps to get started.