February 3, 2021

How to Invest $5 in Stocks

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Think $5 is too small to make a difference in your financial future? Well, imagine if you shelled out $1.97 to buy a share of Amazon in the 1990s.

Most people think you need a thousand bucks lying around to start investing. In reality, the biggest factor in building wealth is how early you start, not how much you currently have.

That's why many newbie investors are using Acorns, Stash or Robinhood to grow their savings. These micro-investing apps allow anyone to start, even with just $5. But each one works a little differently.

Take 5 minutes to find out which is best for you...

1. Acorns: Invest Spare Change into the Stock Market

Contrary to popular belief, you don't need to know terms like "trading on margin" or "capital gains" to invest in the stock market.

An app called Acorns can automatically choose your investments and manage your portfolio for you. Let's say that filling up on gas costs $24.54. The app will round up that charge to the next dollar and invest the difference ($0.46) for you. Over time, your daily purchases really do add up.

If you're 18 years or older, all you need to get started is a U.S.-based checking account. There's no minimum deposit required. Just open your account, start spending, and watch the savings trickle in.

Note, Acorns charges members a monthly flat fee for its investing and banking services, starting at $1 per month. As a bonus, Acorns will give CreditDonkey readers $10 to invest for signing up.

2. Stash: Buy Fractional Shares for Just $1

High-performing stocks like Tesla are too expensive for most investors. A single share could cost hundreds or even thousands of dollars.

Luckily, Stash lets you invest in a piece of Tesla, Amazon, Google, and other household names, starting at $1.

These "pieces" are called fractional shares and it means you own a piece of these valuable companies. When they do well, some of them even send you a cut of their profits in the form of "cash dividends."

Old-school online brokers like Vanguard and E*TRADE don't support fractional shares. So if you're set on big name companies, use Stash. Right now, you'll get $5 for joining - a nice way to double your $5.

Not sure what to invest in? Stash will help you choose investments tailored to your goals, risk tolerance, and interests. It's great for beginners who want to learn about the stock market. Keep in mind, they charge $1 per month for the basic, guided investing plan.

3. Robinhood: Get Up to $200 in Free Stock

If you want to dip your feet into investing without losing money to fees, download Robinhood. When you sign up, they'll drop a free stock into your account (worth anywhere from $2.50 to $200).

Aside from the freebie stock, Robinhood is popular with new investors because it's 100% free to use. They don't charge any commission or monthly fees and there's no minimum to start. You can continue to invest small sums of money as you're able to afford it.

That said, Robinhood doesn't offer the same kind of guidance as Acorns and Stash. You need to be comfortable making investment decisions and managing your own portfolio.

Bottom Line

If you take one thing from this review, remember that no one is "too broke to invest." Micro-investing apps are a great way to invest with small amounts of money - even just $5.

Depending on how you want to start, each app offers something different. Robinhood has zero fees but provides no investment guidance at all, while Stash helps you build a portfolio. And Acorns makes all the choices for you.

Bonus: Become Smarter in Just 5 Minutes

Picture this: Your coworkers are talking about current events. Once again, you just listen and nod because you don't quite know what they're talking about.

Sound familiar? Of course you want to stay informed, but most news is pretty dry. Luckily, you can get unbiased news that's actually fun to read emailed to you every morning.

Morning Brew is a free newsletter designed for young professionals to get on their A game. You get the latest updates about business, politics, and tech in just 5 minutes. You can even read it first thing before you get out of bed.

Bonus: Flip Houses From Your Laptop

Have you ever thought about buying and flipping houses, but don't have enough capital? On top of that, there's a lot of work involved, and who has time for that?

The Groundfloor platform lets you do that all from your laptop. Invest in projects starting from just $10. And leave the actual buying, fixing, and selling to professional real estate developers.

Groundfloor is different from other real estate crowdfunding platforms. You're funding loans with short 6-18 month terms, so your money isn't tied up for years. Plus, you get steady payments while the loans are repaid.

Write to Amber K at amber.kong@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts. And remember that you can listen to CreditDonkey Radio any time.

Note: This website is made possible through financial relationships with some of the products and services mentioned on this site. We may receive compensation if you shop through links in our content. You do not have to use our links, but you help support CreditDonkey if you do.

CreditDonkey is a paid Affiliate/partner of Stash. Investment advisory services offered by Stash Investments LLC, an SEC-registered investment adviser. This material has been distributed for informational and educational purposes only, and is not intended as investment, legal, accounting, or tax advice. Investing involves risk.

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