How to Invest $50 In The Stock Market (2024)

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Most people wait to start investing until they have a significant amount of money saved up. This made sense a few years ago for two reasons:

  1. Mutual fund companies had high account minimums (some were as high as $3,000).
  2. Brokerage firms charged high fees, which ate up the returns of small accounts.

But now there are high-quality, zero-fee investment providers that let you get started for $50 (or even less, in some cases).

If you’re wondering how to invest $50 in the stock market (or whatever little money you have, for that matter), this article can help.

Table of Contents

Should You Start Investing?

Before you start investing in the stock market, you want to make sure that doing so makes financial sense.

The number one reason why you shouldn’t start investing is high-interest debt. If you have high-interest debt like credit card balances, you should hold off on buying stocks.

That’s because the stock market has returned an average of about 7% per year after inflation. So if you have debt at a higher interest rate than 7%, getting out of debt as fast as possible is your best investment. It’s also a guaranteed rate of return, which is something the stock market can’t provide.

Does Investing With Little Money Matter?

Next is the fact that a little money plus a lot of time results in a lot of money.

To illustrate this point, here’s what $50 a month at a 7% returns compounds to:

YearsAmount
10$8,388
20$24,791
30$57,057
40$120,530
50$245,390

When you start early, even as a teenager, you have the tremendous advantage of compound interest on your side. This is how you can build generational wealth, even if you don’t make a lot of income.

You can learn more about investing when you have a tight budget in our article about investing on a $50,000 per year salary.

What Type of Investment Account Should You Open?

There are two primary types of investment accounts.

  1. Taxable accounts.
  2. Retirement accounts.

In a taxable account, any income earned is, as the name suggests, subject to taxes. That includes dividends and gains if you were to sell. Examples of taxable accounts include standard brokerage accounts, like the ones you’d get by signing up with Robinhood.

With retirement accounts, such as IRAs and 401(k)s, taxes may be deferred (so you owe less today) or paid upfront so your investments can be sold tax-free during retirement.

The difference between these account types is huge!

Let’s say you invested $50 per month for 40 years (between the ages of 25 and 65). If you placed those funds in a taxable account, you might end up with a figure around $50,000. If you placed them in a traditional retirement account, that figure might be closer to $75,000.

Your actual returns would vary depending on many factors, including your investment choices and the overall economic environment. However, these figures (as illustrated in the chart below) show the impact of investment fees and taxes on the value of your portfolio over time.

How to Invest $50 In The Stock Market (1)

Taxes eat away at your gains, so it’s important that you pick the right investment account.

If your employer offers a 401(k) with an employer match, this is a great place to start. You won’t come close to matching the returns your employer’s 401(k) match will provide.

If you don’t have access to a 401(k) with an employer match, I’d recommend a Roth IRA, which allows you to contribute after-tax money today and then withdraw that money tax-free starting at the age of 59.5 years.

Here’s a guide that explains more about the differences between traditional and Roth IRAs.

Keep in mind that 401(k)s have their own fees, which can also eat away at your potential returns. We created a calculator help you determine your 401(k) account expense ratio quickly.

Different Ways to Invest in Stocks

You might be thinking that you want to take your $50 and invest it in a company like Amazon, Facebook or Tesla. But if maximizing your returns is your goal (which it should be), that may not be in your best interest.

Few investors, including professionals, are able to pick individual stocks and beat the market. They might get lucky once or twice, but study after study has shown that few succeed in the long run.

Of course, it’s hard not to try and pick the next big stock market winner. After all, this is what gets a lot of people interested in investing. I’m in this camp myself.

If that’s the case for you, I suggest limiting the amount you invest in individual stocks to no more than 10% of your total investments. You can check out our beginner’s guide to investing in stocks to learn more about individual stock investing, including where it fits within your overall financial plan.

The approach that research shows has enabled individual inventors to outperform market averages — and even most investment professionals — is low-cost index fund investing.

An index fund is a mutual fund that holds a collection of stocks. For example, an S&P 500 index fund holds stock in all the companies that make up the S&P 500 (which includes the 500 largest companies in the U.S.).

There are a number of advantages to investing in index funds, especially for those wondering how to invest $50 in the stock market:

  • Low fees. Index funds charge very low fees.
  • Tax efficient. Because they don’t trade a lot of stocks, index funds incur minimal taxes.
  • Low maintenance. You get a totally hands-off investment.

Related reading: How to invest for retirement In your 20s, 30s and 40s.

Where to Invest as Little as $50

The one downside to getting started with as little as $50 is that you’re limited to certain investment providers.

Many investment firms still have minimum deposits that start at $1,000.

Also, you need a brokerage that allows you to invest in fractional shares. Many of today’s most popular stocks go for hundreds or thousands of dollars per share, so going with a brokerage that allows you to purchase fractional shares gives you significantly more options.

How to Invest $50 In The Stock Market (2)

How to Invest $50 In The Stock Market (3)

How to Invest $50 In The Stock Market (4)

Brokerage

Brokerage

Public

Robinhood

Moomoo

Account Types

Account Types

Taxable accounts only.

Taxable accounts only.

Taxable accounts only.

Minimums

Minimums

$0 to start investing.

$0 to start investing.

$0 to start investing.

Promotions

Promotions

Free share worth up to $70.

N/A.

Up to five free shares.

Trading Hours

Trading Hours

9:30 a.m. to 4 p.m. EST.

9 a.m. to 6 p.m. EST.

4 a.m. to 8 p.m. EST.

Investment Types

Investment Types

Stocks only.

Stocks, ETFs, and options.

Stocks, ETFs, options and crypto.

Exchanges

Exchanges

U.S. exchanges only.

U.S. exchanges only.

U.S., China and Hong Kong.

Deposits

Deposits

Bank transfer, debit card, check or wire.

Bank account or debit card.

Bank transfer or wire.

Support

Support

Live chat and email.

Phone and email.

Email support only.

Best For

Best For

Buy-and-hold individual stock investors.

Beginning investors looking to actively trade.

Experienced active investors.

Visit PublicPublic Review

Visit Robinhood

Visit Moomoo

Investing With Little Money FAQ

How can I invest $50 dollars for a quick return?

There are two guaranteed ways to get a quick return. First, if your employer has a 401(k) match, start contributing up to that match. That’s free money you don’t want to miss out on. You can also take advantage of a handful of free stock promotions, which can immediately increase your return.

Is investing with little money worth it?

Yes! Little amounts of money, even just $50 a month, can grow to large sums given enough time. Also, there are tax benefits to investing with little money. If you qualify, there’s a retirement savings contribution credit (up to 50% of your contributions).

Are micro-investing apps worth it?

Micro-investing apps often have monthly fees can overtake your returns. Depending on the size of your account, you may be better off just investing on your own and not paying the monthly fee. Still, these apps do offer some benefits. See our list of best micro-investing apps, and learn more in our complete guide to micro-investing.

Are there any good books on investing with little money?

See our list of best stock market books for beginners.

Can you invest in real estate with little money?

Yes, many new platforms allow you to start with just $10. Read our guide on how to invest in real estate with little money to learn more.

What to Do After You Invest

Once you’ve made your first investment, you may be wondering what to do next.

First, you want to set up an automatic deposit into your investment account. Ideally, set up a recurring transfer from your checking account to your investment account for the day after your paycheck hits. This will help you make sure you actually move money over on a consistent basis.

Next, challenge yourself to increase the amount you’re investing. If you increase the amount you invest by $10 each month, you’ll be up to $170 per month after just a year.

After that, it’s a matter of being patient.

Investing is a long-term game. Those who win are those who are patient. This isn’t gambling, and you’re not going to find the next Google or Amazon. Your goal is steady, consistent gains that compound over time. That may sound boring, but it’s the best way to get rich.

You also may want to use an app that tracks your investments. If you do, just don’t get too concerned when your portfolio value drops. Down markets are inevitable. Be patient. The last thing you want to do is sell when your investments have bottomed out.

And keep in mind that any given dip is just one brief moment in time. Remember the financial crash of 2008, when investors lost billions upon billions of dollars seemingly overnight?

Well, here’s how that dip looks a little over a decade later, on a chart showing the ups and downs of the S&P 500:

How to Invest $50 In The Stock Market (5)

So stick with it and have faith, even when things are looking ugly. That trend line is sure to take a sharp turn down at some point sooner or later, and that’s just fine — you’re in this for the long haul.

How to Invest $50 In The Stock Market (6)

R.J. Weiss

R.J. Weiss, founder of The Ways To Wealth, has been a CERTIFIED FINANCIAL PLANNER™ since 2010. Holding a B.A. in finance and having completed the CFP® certification curriculum at The American College, R.J. combines formal education with a deep commitment to providing unbiased financial insights. Recognized as a trusted authority in the financial realm, his expertise is highlighted in major publications like Business Insider, New York Times, and Forbes.

    How to Invest $50 In The Stock Market (2024)

    FAQs

    How to Invest $50 In The Stock Market? ›

    While you can totally toss that $50 into the S&P 500, consider starting with a company that interests you personally. That way, you're more inclined to pay attention to your money. Even if the stock doesn't do well, you can learn valuable lessons about the stock market for the low, low price of $50.

    Can you buy stocks with $50? ›

    However, it doesn't take much money to start making money investing in stocks. Of course, you still must find great companies to buy. That's not a difficult task, though. Here are three stocks under $50 you can buy hand over fist right now.

    Is it worth investing $50? ›

    Investing only $50 a month adds up

    Contributing $50 a month to an investment account can help create impressive savings, even at a moderate 5% annual growth. It's a common myth that you need a few thousand dollars to begin investing.

    Can I start trading with $50? ›

    You can use any deposit you like, $50 or $100, even $1 (if Broker accept such amount) or the amount you are able to invest. Any amount. If you follow money management, your deposit will stay alive long-long time, even if you are beginner.

    How much can $1 get you in stocks? ›

    Investing $1 a day can turn into tens of thousands of dollars over a long period of time. You can get started by opening a brokerage account and researching low-cost index funds.

    Is investing $50 a week worth it? ›

    Assuming a 15% annual growth rate (on average), a $50 per-week investment could grow to a value of more than $1.5 million after 30 years. And it would take a little more than 27 years for it to hit the $1 million mark.

    Can you buy Starbucks stock? ›

    Starbucks Corporation's Common Stock is traded on Nasdaq under the trading symbol SBUX. Starbucks stock may be purchased in two ways: Through a stockbroker, or. Directly through the Direct Stock Purchase Plan administered by our transfer agent, Computershare.

    What happens if you save $50 dollars a month for a year? ›

    If you set aside $50 a month for one year, you'll have $600 saved. That's better than $0. As you continue to contribute more money, your account balance will grow. By keeping your extra cash in a high-yield savings account, you can earn interest while your money sits in the bank.

    Is it worth investing $20 a week? ›

    Small amounts will add up over time and compounding interest will help your money grow. $20 per week may not seem like much, but it's more than $1,000 per year. Saving this much year after year can make a substantial difference as it can help keep your financial goal on your mind and keep you motivated.

    Is 50 too late to invest? ›

    It's never too late.

    Use any knowledge of the tax system you already have and apply it to your investing journey – it will benefit you.

    Can you make $200 a day day trading? ›

    A common approach for new day traders is to start with a goal of $200 per day and work up to $800-$1000 over time. Small winners are better than home runs because it forces you to stay on your plan and use discipline. Sure, you'll hit a big winner every now and then, but consistency is the real key to day trading.

    Is Mcdonalds a good investment? ›

    McDonald's's analyst rating consensus is a Moderate Buy. This is based on the ratings of 26 Wall Streets Analysts.

    How much do you need to make $100 a day trading? ›

    You're really probably going to need closer to 4,000 or $5,000 in order to make that $100 a day consistently. And ultimately it's going to be a couple of trades a week where you total $500 a week, so it's going to take a little bit more work. Want to learn more about trading?

    Has anyone gotten rich from stocks? ›

    Certain billionaires made their fortunes in the stock market. The list includes John Paulson, Warren Buffett, James Simons, Ray Dalio, Carl Icahn, and Dan Loeb.

    Can you live off investments? ›

    How much you need to live off interest depends entirely on your expenses and where the balance is invested. A million dollars in a retirement account might produce enough income for the median American to get by, but you'd need larger returns to cover a six-figure lifestyle. Consider your lifestyle goals, too.

    Can I invest with 3 dollars? ›

    But you don't need a ton of money to buy into the stock market. In some cases, you can get started with as little as $1. Stocks and exchange-traded funds can only be bought in whole units at many brokers. Depending on the company or fund, that could mean thousands of dollars for a single share.

    What is a good stock under $50? ›

    The top undervalued, non-penny stocks on the NYSE or the Nasdaq for March 2024 that trade below $50 per share include Joyy, Ebang International Holdings, STRATTEC Security, Central Plains Bancshares, EuroDry, Landsea Homes, Viatris, Alico, Universal Stainless & Alloy Products, EQT, and Consolidated Water Co.

    Is $10 enough to invest in stocks? ›

    Some of the best US stocks to invest in under $10 include Southwestern Energy Company (NYSE:SWN), New York Community Bancorp, Inc. (NYSE:NYCB), Alight, Inc. (NYSE:ALIT), and others.

    What can I invest in with $50 bucks? ›

    Much like Bank of America Corporation (NYSE:BAC), Teck Resources Ltd (USA) (NYSE:TECK), and Pfizer Inc. (NYSE:PFE), Kraft Heinz Company (NASDAQ:KHC) ranks among the best stocks under $50 to buy.

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