If you’re a young adult in the U.S. trying to figure out how to start investing with limited money, you’re not alone. The good news is that you don’t need thousands of dollars to begin. With today’s apps and fractional shares, investing with $50, $100, or $500 is easier than ever.
As legendary investor Warren Buffett famously said: “The best time to start investing was years ago. The second-best time is now.”
Starting small is powerful—especially when you’re young.
Why Every Young Person Should Start Investing Early
Time is your biggest advantage. Through compound growth, even small contributions can grow significantly.
For example:
Investing $50/month at a 7% average return can grow to $62,000 in 30 years—even though you only invested $18,000.
Vanguard founder John Bogle highlighted this simple truth:
“The miracle of compounding returns is overwhelmed by the tyranny of compounding costs.”
This is why low-cost, simple investments work best for beginners.
Best Investment Apps for Young Beginners
These U.S.-based platforms let you start with as little as $1:
- Robinhood – Easy to use, supports fractional shares
- Fidelity – Great research tools and $1 minimum
- Charles Schwab – Trusted, low-fee index funds
- SoFi Invest – Beginner-friendly interface
Most charge zero trading commissions, meaning more of your money goes directly into investing.
What to Invest in With $50–$500
Here are simple, proven investment types backed by the strategies of great investors.
1. Low-Cost Index Funds (John Bogle’s Top Pick)
Index funds give you instant diversification by investing in hundreds of companies.
Beginner-friendly examples:
- VOO – Vanguard S&P 500 ETF
- VTI / SCHB – Total U.S. stock market funds
- FZROX – Fidelity ZERO Total Market Index Fund
These are popular because they’re:
- Low cost
- Low stress
- Long-term growth focused
Bogle built his entire career on these funds because they help everyday investors succeed.
2. Fractional Shares of Popular Companies
If you want to own a piece of companies you love—Apple, Microsoft, Tesla—fractional shares make it possible with just $10–$50.
Warren Buffett champions investing in companies you understand:
“Buy into a company because you want to own it, not because you want the stock to go up.”
3. Target-Date Retirement Funds
These are perfect for beginners who want “automatic investing.”
Examples:
- Vanguard Target Retirement 2050 Fund
- Fidelity Freedom Index 2045 Fund
They automatically adjust based on your age, making them ideal for Roth IRAs.
How to Start Investing With Different Amounts
Investing $50
- Buy fractional shares of an S&P 500 ETF (VOO)
- OR buy $50 worth of a company you trust
This builds your first investing habit.
Investing $100–$250
Consider a simple beginner portfolio:
- 60% Total Market ETF (VTI, SCHB)
- 20% Dividend ETF (SCHD)
- 20% A company you believe in
Or open a Roth IRA and buy a target-date fund.
Investing $500
Build a more balanced portfolio:
Buffett-Style Portfolio
- 80% S&P 500 index fund
- 20% bond index fund
OR a diversified ETF mix:
- 50% U.S. Total Market
- 20% S&P 500
- 20% International Stocks
- 10% Real Estate (REITs)
Tips from Legendary Investors for Beginners
✔ Warren Buffett: Invest Consistently
Use dollar-cost averaging—invest the same amount every month regardless of market conditions.
✔ John Bogle: Keep Fees Low
Low-cost index funds beat most expensive, actively managed funds over time.
✔ Peter Lynch: Invest in What You Understand
His advice: “Know what you own, and know why you own it.”
Final Thoughts: Your Future Self Will Thank You
You don’t need a lot of money to build wealth—just the willingness to start.
Whether you can spare $50 or $500, the key is to:
- Start early
- Keep it simple
- Invest consistently
- Think long-term
The sooner you begin, the more time your money has to grow.