42% of Americans Say a Lack of Money Is a Barrier to Investing. This Brokerage Account Feature Can Help You Overcome That

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  • A lot of people don't have much money to invest with.
  • The right brokerage account could open the door to plenty of options, even if you're on a budget.
  • Consider opening a brokerage account that allows you to buy fractional shares.

You really don't need a lot of money to start investing -- if you have the right brokerage account.

There's a reason people are encouraged to invest money they don't need to use right away or earmark as emergency savings. If you invest your money in stocks and other assets with growth potential, you have the potential to turn a modest sum of cash into a much larger one down the line. And so once you're all set with an emergency fund, it pays to open a brokerage account and start putting your extra money to work.

But many Americans don't invest their money. And for some, the reason boils down to not having a lot of it.

In a recent survey by Magnifi, 42% of respondents said that a lack of money is a barrier to investing. And if your living costs eat up most of your income, it's understandable that you might not have a ton of cash to invest month after month.

The good news, though, is that it actually doesn't take a lot of money to be a successful investor. In fact, if your brokerage account offers one key feature, you may find that it's possible to build the portfolio you want without being held back.

Does your brokerage account offer fractional shares?

It's possible to buy shares of stock at less than $10 apiece. But some shares of stock cost well more than $500 on an individual basis.

Now, let's say the companies you really want to invest in are those with higher share prices. You might assume that you're out of luck until you're able to save up more money to invest. But that's not necessarily true.

These days, many brokerage accounts offer the option to invest in fractional shares. This means buying a portion of a share of stock if a full share isn't financially doable for you.

So, let's say you have $200 to invest this month and you want to put money into a company with a $600 share price. If your brokerage account allows you to buy shares on a fractional basis, you can take your $200 and buy one-third of a share of stock rather than pass up on the chance to invest in the company you're interested in.

In fact, fractional shares are a great way to build up a diversified portfolio. And having a wide range of stocks and assets can not just help you build wealth, but also protect you from extreme losses. And so if your brokerage account doesn't offer that option, it may be time to move your money over to a new account that does.

Don't wait to invest

It pays to start investing as soon as possible so you can start growing long-term wealth. Even if you're only sitting on $50 or $100, you should put that money into a brokerage account and start building a portfolio. And if you find a brokerage account that offers fractional shares, you won't have to limit yourself to lower-cost shares that may not fit into your personal investment strategy as well as some of the pricier shares out there.

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