Investing on a Low Income

Investing is one of the most powerful ways to build wealth and provide for a more comfortable retirement. However, when you don’t make a great deal of money, the barriers to getting started can seem insurmountable. This doesn’t have to be the case. Here are four ways you can begin investing even when your paycheck is small.


If your company offers a 401(k) retirement plan, contributing to it is one of the easiest ways to get started investing — even if you don’t have much money to spare. Some companies will even match your 401(k) contribution up to a certain amount. For example, say your company offers 50 percent matching up to 6 percent of your income. If you make $30,000 a year and contribute just 1 percent of your income ($300), that 50 percent match would net you an additional $150 in free money each year. And if possible, you’d want to eventually contribute 6 percent of your income to take full advantage of the company match.

Investing apps

Even if you’re only able to set aside a few dollars each month, you can take advantage of numerous investing apps that will help you invest and grow those funds. Eric Rosenberg of The Balance recommends the Acorns app as a good way to get started. After you connect it to your debit or credit card, Acorn automatically rounds up each amount you spend and invests the difference in low-cost exchange-traded funds. For example, if you spend $3.50 on coffee, Acorn will round that up to $4 and invest the extra 50 cents. An added bonus: Acorn only requires an initial investment of $5 to get started.

If you’re looking to invest in individual stocks, Rosenberg suggests the Robinhood app. With this online-only service, you can start investing even if you only have a few dollars to spare. No minimum balance is required and you can make stock trades free of charge, unlike most brokerages.


Roboadvisors are a helpful online tool that use artificial intelligence to help you effectively invest small amounts of money, primarily in low-cost EFTs. Writing for Money Under 30, personal finance blogger Kevin Mercadante identifies three roboadvisors that are especially well-suited for low-income investors. Wealthfront requires a $500 minimum balance to start and M1 Finance requires $100. If you have even less to start with, there’s Betterment, which asks for no minimum balance at all. All three of these tools charge low fees, meaning your money will go further.

Dividend reinvestment plans

Dividend reinvestment plans, or DRIPs, can be an effective way to invest small amounts of money in individual stocks. With these plans, when your stock pays a dividend, that amount can be automatically reinvested. According to NerdWallet writer Andrea Coombes, DRIPs are offered through both companies and brokerages. Opting for a company DRIP can often involve lower or no fees, and you can often invest sums as small as $10 to $50 or buy fractions of more expensive shares. However, if you wish to invest with multiple companies, these accounts can become hard to track if you’re not going through a brokerage.

Can you scrape together $20, $5 or even $1? If so, you can take advantage of these tools and begin investing now — and take your first steps toward greater financial independence and security.