Here’s a number most “how to start investing” guides won’t lead with: $100 per month, invested consistently for 30 years, has historically grown to over $226,000 β based on the S&P 500’s long-term average return. Your total out-of-pocket? Just $36,000.
That $190,000 gap is compound growth doing the heavy lifting. And the barrier to entry for anyone wondering how to start investing? It’s basically gone. Most major brokerages require $0 to open an account, fractional shares let you buy into funds for as little as $1, and the entire process takes about 15 minutes.
The real question isn’t whether you can start investing with $100 β it’s whether you know which steps actually matter and which ones are noise. This guide on how to start investing strips it down to what you need to do, in order, with zero filler.
Your numbers will be different. Try it β plug in your own starting amount, monthly budget, and timeline:
Compound Growth Calculator
Plug in your numbers. Watch compounding do the work.
How to Start Investing: The 30-Second Version
Before the step-by-step breakdown of how to start investing, here’s the entire playbook in three cards. If you get only these three things right, you’re ahead of most people who never start at all.
That’s the framework for how to start investing. The rest of this guide explains how to execute each step, which account type fits your situation, and what the math looks like over time.
Before You Start Investing: Two Boxes to Check
Before you rush to figure out how to start investing, consider this: putting $100 into the market while carrying $5,000 in credit card debt at 24% APR is like filling a bathtub with the drain open. The math doesn’t work in your favor. Two financial foundations tend to make the investing journey smoother.
The exception: if your employer offers a 401(k) match, many financial professionals recommend contributing enough to capture the full match β even while paying off debt. A 100% employer match is an immediate 100% return on that money.
How to Start Investing: Pick Your Account Type
The account you choose affects your taxes and flexibility more than the investments inside it. Here’s how the three main options compare for someone learning how to start investing.
| Feature | Brokerage Account | Roth IRA | 401(k) |
|---|---|---|---|
| Tax Advantage | None | Tax-free growth & withdrawals | Tax-deferred growth |
| 2026 Contribution Limit | Unlimited | $7,500 (under 50) | $24,500 |
| Withdrawal Flexibility | Anytime, no penalty | Contributions anytime; earnings after 59Β½ | After 59Β½ (10% penalty before) |
| Employer Match | No | No | Often yes |
| Minimum to Open | $0 at most brokers | $0 at most brokers | Through employer |
| Best For | General investing, mid-term goals | Long-term retirement savings | Retirement with employer match |
A common starting order: Many investors begin by contributing enough to their 401(k) to capture the full employer match, then open a Roth IRA for additional tax-free growth. A taxable brokerage account comes into play when those tax-advantaged options are maxed out β or when you want access to funds before retirement age.
Not sure which account to prioritize when you start investing? The approach that tends to maximize long-term value involves capturing every dollar of employer match first, then filling tax-advantaged space, then using taxable accounts for the overflow. Every situation is different β a fee-only financial advisor can help map out an order that fits your income and goals.
How to Start Investing in 5 Steps
You can go from zero to your first investment in under 30 minutes. Here’s the step-by-step process.
That’s how to start investing β five steps, one afternoon. The hardest part is usually Step 4, deciding what to actually buy. The next section narrows that down.
How to Start Investing: What to Buy With Your First $100
With thousands of ETFs available, the paradox of choice can freeze you. For most people figuring out how to start investing, a single broad-market ETF is a solid starting point. Here’s why β and which ones have the longest track records.
| ETF | What It Tracks | Expense Ratio | # of Stocks | Why Beginners Use It |
|---|---|---|---|---|
| VOO | S&P 500 | 0.03% | ~500 | 500 largest U.S. companies, one purchase |
| VTI | Total U.S. Market | 0.03% | ~3,600 | Entire U.S. stock market including small caps |
| SCHD | Dividend Growth | 0.06% | ~100 | Quarterly dividend income + growth |
| VTI + VXUS | Global Market | 0.03% / 0.07% | ~12,000 | U.S. + international diversification |
The difference between VOO and VTI? Minimal. Both track nearly identical large-cap U.S. stocks and charge 0.03% in fees. VTI adds small- and mid-cap exposure, but the two have moved in near-lockstep historically. If you’re agonizing over which one, the decision to start matters more than which of these you pick first.
One thing to keep in mind as you start investing: individual stocks are not the same as ETFs. Buying a single company’s stock concentrates your risk in one business. An ETF spreads your $100 across dozens or hundreds of companies β so one bad earnings report doesn’t sink your portfolio.
How to Start Investing: What $100 Per Month Actually Becomes
This is where learning how to start investing gets genuinely interesting. The table below shows what happens when you invest $100 every month at different average annual returns β using historical ranges for context.
| Time Period | You Contribute | At 7% / yr | At 10% / yr | At 12% / yr |
|---|---|---|---|---|
| 10 Years | $12,000 | $17,308 | $20,484 | $23,004 |
| 20 Years | $24,000 | $52,093 | $75,937 | $98,926 |
| 30 Years | $36,000 | $121,997 | $226,049 | $349,496 |
Look at the 30-year row at 10%. You put in $36,000 of your own money. The market grew it to $226,049. That means 84% of the final balance came from compound growth β not your contributions.
This is the single most important number for anyone learning how to start investing: the earlier you begin, the more of that growth you capture.
And if you bump that monthly contribution to $200? The 30-year figure at 10% roughly doubles to $452,000. The savings rate β not income level β is what drives the math.
These figures assume a constant average annual return compounded monthly. Actual market returns fluctuate year to year β some years you’ll see gains well above 10%, others will be negative. Past performance doesn’t guarantee future results.
Now here’s the part most people underestimate: when you start matters more than how much you start with. Plug in two different starting ages below and see the gap for yourself.
The Cost of Waiting
Same contribution, different start age. See what delay actually costs.
How to Start Investing Without These 5 Costly Mistakes
Knowing how to start investing is only half the equation. Avoiding these common pitfalls is the other half.
What Starting to Invest Is Not
A few misconceptions about how to start investing keep people on the sidelines longer than necessary.
“I need thousands of dollars to start.” Not true. Fractional shares let you invest as little as $1 at most major brokerages. You don’t need enough for a full share of anything.
“Investing and gambling are basically the same.” Buying a single meme stock on a Reddit tip? That’s speculation. Buying a broad-market ETF that owns 500+ companies and holding it for decades? Historically, that has looked nothing like gambling β the S&P 500 has never posted a negative return over any rolling 20-year period.
“I need to learn technical analysis first.” You don’t. You need to open an account, buy a diversified fund, and contribute consistently. That’s how to start investing β and you can learn more as your money grows. Compound growth doesn’t wait while you study candlestick charts.
Frequently Asked Questions
Is $100 really enough to start investing? +
Should I open a Roth IRA or brokerage account first? +
What’s the difference between investing and trading? +
How do I start investing if I still have student loans? +
Can I lose all my money investing in ETFs? +
How much should I invest each month? +
This article is for informational purposes only and does not constitute investment advice. Past performance does not guarantee future results. All investing involves risk, including the possible loss of principal. Always do your own research or consult a licensed financial advisor before making investment decisions.