Introduction

The biggest lie in investing is that you need a lot of money to get started. You don't. With $100 and a smartphone, you can open an investment account today and start building wealth. The secret isn't the amount you start with — it's starting at all.

Before You Invest: Two Prerequisites

1. Have an Emergency Fund

Never invest money you might need in the next 1–2 years. Investments can lose value in the short term. Your emergency fund ($500–$1,000 minimum) should be funded before you invest a dollar.

2. Pay Off High-Interest Debt

If you're carrying credit card debt at 18–25% interest, paying it off is the best "investment" you can make. A guaranteed 20% return beats any stock market return.

Step 1: Choose Your Investment Account

Roth IRA — Best for Most Beginners

A Roth IRA lets you invest with after-tax dollars and withdraw everything tax-free in retirement. $7,000/year contribution limit in 2026. This is the single best account for most beginners.

  • Open at Fidelity, Vanguard, or Schwab — all have $0 minimums
  • Contribute any amount up to the annual limit
  • Invest in index funds within the account

401(k) — Always Get the Match First

If your employer matches 401(k) contributions, contribute at least enough to get the full match. A 50% match is a guaranteed 50% return on your money. Nothing beats it.

Step 2: Choose Your Investment

Index Funds — The Smart Beginner Choice

An index fund is a basket of stocks that tracks a market index like the S&P 500. Instead of picking individual stocks, you buy a tiny piece of the 500 largest US companies at once.

💡 Pro Tip: Warren Buffett has repeatedly said that for most people, a low-cost S&P 500 index fund is the best investment available. You don't need to beat the market — just match it.

Recommended Funds for Beginners:

  • VTI — Vanguard Total Stock Market ETF (expense ratio: 0.03%)
  • VOO — Vanguard S&P 500 ETF (expense ratio: 0.03%)
  • FXAIX — Fidelity 500 Index Fund (expense ratio: 0.015%, $0 minimum)
  • SWTSX — Schwab Total Stock Market Index Fund (expense ratio: 0.03%)

Step 3: Set Up Automatic Investing

After your initial $100, set up automatic monthly contributions of whatever you can afford. Here's what consistency looks like at 8% average annual return:

  • $50/month for 30 years: $50,226
  • $100/month for 30 years: $100,451
  • $200/month for 30 years: $200,902
  • $500/month for 30 years: $502,258

Common Beginner Mistakes

  • Waiting until you have "enough" money — there's no threshold, start with $100
  • Checking your portfolio daily — markets fluctuate, long-term investors ignore short-term noise
  • Panic-selling during market downturns — crashes are buying opportunities
  • Chasing "hot stocks" from social media — this is gambling, not investing
  • Ignoring tax-advantaged accounts in favor of regular brokerage accounts

Conclusion

Investing is not complicated: open a Roth IRA, buy a low-cost index fund, automate monthly contributions, and leave it alone for decades. Your future self will be extraordinarily grateful. Open your account today — it takes 15 minutes and $100 is all you need to start.