61% of Americans Who Don't Own Stocks Say It Doesn't Pay to Invest if You Don't Have a Lot of Money. Here's Why They're Wrong

Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures our experts’ opinions aren’t influenced by compensation. Terms may apply to offers listed on this page.


  • Many people feel that investing a small amount of money doesn't make sense.
  • But the sooner you start investing, the more financial gain you stand to enjoy over time.

You shouldn't let limited funds delay your investing career.

Inflation has been putting a strain on consumers for well over a year now. And as a result, many people have had to dip into their savings accounts and cut out expenses just to stay afloat and avoid debt.

As such, many people who would otherwise want to invest may be holding off due to a lack of funds. And if you're in a situation where you need all of your money for essentials, then that makes sense.

But even if you only have a small amount of money on hand to invest with, it pays to open a brokerage account or IRA and put that money to work -- even though most people may not agree with that sentiment. In a recent Wells Fargo survey, 61% of respondents said they think investing isn't worth it if you don't have a lot of money. But here's why they're very, very wrong.

A small investment could go a long way

Let's say you're pretty strapped for cash and can really only carve out $100 to invest in your IRA or brokerage account. You might think, "Why bother? It's not like that $100 investment is going to make me a millionaire."

You're probably right in that regard. Even if your portfolio does extremely well, it's unlikely that a mere $100 investment will grow into $1 million in your lifetime. But could that $100 grow into a lot more money over time? You bet it could.

The S&P 500 index, which consists of the stock market's 500 largest publicly traded companies, delivered an average yearly return of almost 12% between 1957 and 2021. Even if we want to be a bit more conservative and apply a 10% average annual return to your investment portfolio, if you invest $500 over 50 years, you'll grow it into $12,000. That's a really nice gain.

And that's why it pays to start investing as soon as you have spare cash to work with. It doesn't matter if you don't have a whole lot of money. The key is to put the money you do have to work as early as possible so you can take advantage of compounded returns in your IRA or brokerage account.

You may not even be limited in the stocks you're able to buy

If you only have $100 to invest, you might assume that a lot of the more expensive stocks out there are off the table. After all, if a given company is trading for $500 a share and you're limited to $100, you clearly can't swing a full share.

But you don't have to buy a full share. Most brokerage accounts these days allow you to purchase shares of stock on a fractional basis. So in this case, you'd simply take your $100 and buy one-fifth of a share of the company you want to own. It's that simple.

You may not have a lot of money to invest right now, and that's okay. But don't assume that a small investment won't go a long way. Quite the contrary -- you may be shocked (in a good way) at just how much wealth you're able to accumulate by investing a modest amount of money.

Alert: our top-rated cash back card now has 0% intro APR until 2025

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee! Click here to read our full review for free and apply in just 2 minutes.

Our Research Expert

Related Articles

View All Articles Learn More Link Arrow