How to Invest $20: Easy Ways to Put Your Money to Work

By Todd Kunsman


Published on

Updated on

As you begin thinking about your financial future, you may wonder what your extra money can do for you.

Not everyone has thousands of dollars right from the start to invest and that may deter a lot of people (including yourself). 

But in this digital age with updated regulations around investing and new fintech companies — you can start to invest with much less money. In fact, there are a few ways that you can invest $20 wisely and start building a smaller, but growing nest egg. 

Now investing $20 won’t make you rich overnight nor can you expect massive returns from this amount. But anytime you have some extra money, it can be a good idea to put it towards some investments. 

Let’s learn about how to invest $20 and some of the best ways you can get started. 

Is Investing $20 Actually Worth It?

While you might be happy that you have $20, invested as a one-time thing is not going to be life-changing. However, it does get you in the right mindset and the good habit of investing, which will be impactful as you work on your finances. 

Compound interest is a wonderful concept and when you think about the numbers, it might surprise you at how much money can accumulate over time. 

Below are three scenarios with investing $20:

  • If you invested $20 in the stock market and never invested again, in 30 years with a 7% return rate you’d have over $150. Not that exciting, right?
  • If you invested $20 in the stock market each month consistently, in 30 years with a 7% return rate you’d have over $2,100. Still not great, but look how much more you have.
  • If you invested $20 in the stock market each week, in 30 years with a 7% return rate you’d have over $8,400.

The examples above are to show you how compounding works to your advantage. 

Of course, that amount is not enough for you to survive in retirement, so you’ll want to contribute more than $20 on some recurring cadence. For example, you should definitely take advantage of a company 401k and contribute enough to get any match your work offers. 

However, if you have $20 in extra money to invest or you are just starting to learn, it’s worth adding to your investments as well. After all, every bit will compound and help you reach your financial goals. 

Tip: Work on building your emergency fund first if you don’t have one. Keep putting that extra $20 towards that as it can be a financial lifesaver during any emergency. 

Where Can You Invest $20?

So you know that $20 is not a large sum of money, but it is possible to invest that amount. So how can you invest this money? Well, you have a few options to consider, and each offers some pros and cons. 

Additionally, it’s important to always remember your risk tolerance, your financial goals, and your timeline of when you may need this money. 

1. Stock Market

The first place you can invest $20 is with the stock market. Investing in stocks is the most common way you can start to invest and there are lots of options to consider. 

However, if you want to buy index funds or ETFs, you won’t be able to with just $20 due to the costs. For example, Vanguard Index Funds have a minimum of $3,000 to invest. 

ETFs are cheaper, but most are at least $50+ to buy a share. So you can open an IRA, Roth IRA, or traditional brokerage account and put the $20 into the account, then invest in an ETF when you have enough. But you’ll need to consistently add $20 or more to your account. 

Another option is to invest in individual stocks that are under $20. I typically only invest in a select few individual companies as there is much more risk. And companies that are valued under $20 a share can be much more volatile. But you can certainly find some gems at this price as well. 

2. Fractional Shares 

If the traditional route with the stock market is not enticing yet, there is another way to invest $20. You can still invest in stocks that you can’t afford, but instead, you invest in fractional shares or a “slice” of the full stock price. 

Fractional shares let investors buy just a portion of a stock based on the money they have, making it easier to get started with small amounts of money. This financial concept also called “micro-investing,” which has changed the game and allows more people to learn and begin investing. 

What’s cool about fractional share investing is you can invest in individual stocks with a few bucks (and even ETFs pending the broker). 

Where you can invest in fractional shares:

  • Acorns: You can invest your spare change that is automatically set-up to invest in stocks, ETFs, or a tailored portfolio based on your financial goals. You can get started with as low as $5 and automatically set recurring investments. Learn more and get started with Acorns
  • Stash: Another micro-investing company, you can invest with as low as $5. The platform offers fractional shares, you can earn stocks when you use their Stock-Back® Card, banking options, and more. Plus you have access to tons of stocks, bonds, and ETFs. Learn more and get started with Stash
  • Public: One company that is becoming popular is Public. The platform allows investors to buy fractional shares of stocks, ETFs, or choose funds based on themes that they are interested in. Plus, there is a social element to Public to learn from the community. Learn more and get started with Public.

3. Real Estate

As you begin to invest your money, you’ll begin to learn the value of diversification. It’s important to help protect your money against volatility and having other options for your money to grow. 

One way to do this is with real estate via rental properties, land or farmland, REITs, or real estate crowdfunding. 

But wait, how do I invest $20 in real estate? Is that even possible? Yes, it is!

But like the stock market, this amount is not going to get you very far. However, what it does do is get you in the habit of investing and learning as you go without risking too much money. 

With $20, you have two options to consider to get exposure to real estate. 


This stands for real estate investment trust and is a company that owns income-producing real estate. REITs will typically include commercial real estate, ranging from office and apartment buildings to warehouses, hospitals, shopping centers, and hotels. 

For example, Vanguard’s VNQ is an ETF with broad diversification in companies that own real estate. There is also a list of publicly-traded REITs on the stock market that you can invest in too. However, most are going to cost you more than $20 so you will need to save up to begin investing. 

Real Estate Crowdfunding:

The real estate crowdfunding market is booming, giving investors a chance to invest in specific properties or portfolios of properties with ease. No need to be a landlord, property manager, or deal with other traditional real estate issues. 

Fundrise and DiversyFund are two popular names in the space, but their minimums are $500 to get started. However, there is one other platform that allows you to invest in single-family homes for $10: Groundfloor. 

With Groundfloor, you have options to invest in high-yield, short-term real estate debt investments with returns in 6 to 9 months. This can be an option to diversify, mix in some real estate, and learn without risking much money. 

4. Fine Art

Another alternative investment that many wealthy individuals consider is fine art or well-known art. Typically, this can require hundreds of thousands or millions to get involved, so investing in art is not for everyone. However, the crowdfunding market has not only changed the game for real estate but now for art. 

The latest way to invest in art is through a platform called Masterworks

The company was founded by art experts, who acquired famous paintings from the most prestigious names in the art. Names like Andy Warhol, Claude Monet, Jean-Michel Basquiat, and others. But you can invest in shares of this artwork for just $20! 

The investment is a long-term hold of 3-10 years, but you can also sell your shares on their Secondary Market to other investors too, so you have the potential to exit early.

Art certainly has its own risks, but it has a very low correlation to what the stock market or real estate market is doing. 

Now I always recommend starting with the stock market when you begin to invest. It’s where you want to establish your 401k (if your work offers one) or an IRA on your own. But if you have those outlets already, investing $20 or more into art could be an interesting alternative investment. 

Final Thoughts

Investing $20 is not going to make you wealthy, but it gets your money mindset in shape and helps you establish good personal finance habits. 

Whether you invest $20 sporadically, monthly, or weekly — eventually overtime that consistency starts to add up. And as you get comfortable and increase how much you can invest, you can start to see compound interest really go to work for you. 

Everyone has to start somewhere, so even if you have little money or no clue what you are doing, the above options can be great learning experiences. So the question back to you is —  how are you going to invest $20 today?