How To Invest $20 – Start Small-Scale Investing Now

So you just found an extra $20 kicking around in the washing machine – if you’re wondering how to invest $20, that’s a smart move.

Many people don’t know this, but it’s possible to start investing with just a few dollars. So while $20 might not seem like a lot, it could be the first step in a successful, lifelong investment journey.

Here are some top tips for how to invest $20!

20 Dollar on Hand

Choosing How to Invest $20

Before you decide where to invest your $20, it’s a good idea to figure out some logistics.

Consider Your Goals and Timespan

First, what are your goals? Do you want to use the $20 during your retirement in thirty years? Is this a gift that you’d like to grow so that you can use the funds on something nice, like a vacation or luxury item?

Having an idea of what you are going to do with the money will help you determine the best place to put your money. For example, if you plan on using the money in the next five years, you should probably avoid investing in equities like stocks – their value fluctuates so much that it isn’t wise to risk having to withdraw it all when the market’s down.

What Are Your Circumstances?

Are you on the wealthier side, or is $20 a lot of money to you? This will determine your risk tolerance and how risky you can be with where you invest your money. If you can’t afford to tolerate a lot of risk, you should probably avoid investing your money in high-risk stocks and you should stick to something safer, like a savings investment account.


Keep your fees low when you’re trying to figure out where to invest your $20. Especially when you’re investing such a small starting amount of money, it’s not a good idea to tolerate fees of even one or two percent. Use a fees calculator to figure out how much money might be whittled away from you.

Passive or Active Investing

Passive investing is a great choice for people who don’t want to be constantly fiddling with their investments. If you invest in a passive account like some of the ones we’ll tell you about later in this article, you can sit back, relax, and watch your money grow.

What Should I Invest $20 In? 

Here are a few ways you can put your $20 to good use.

The Stock Market

Investing in the stock market is one of the easiest (and most obvious) ways to put your $20 to good use. You can grow your money with an average return of around 7% per year. That may not sound like much, but it’s certainly better than having your money sitting in a savings account!

You can invest your money in the stock market via a variety of options, including individual stocks, ETFs, mutual funds, and index funds (we’ll go into more detail on many of these below).

There are also several types of accounts you can use, including a traditional brokerage account or a 401(k) or Roth IRA.

Know that individual stocks are some of the riskiest when it comes to investing in the stock market. Individual companies can have mixed results from quarter to quarter so the stock prices can vary widely within just one day.

Invest 20 Dollar in Stock Market

Investment Accounts

There are a few types of investment accounts in which you can put your $20. Both an RRSP and TFSA offer tax benefits (they’re considered tax-advantaged) so that you can get “free money” while taking advantage of tax incentives.

These sorts of accounts offer a great way to save for retirement without getting dinged by the IRS.


Bonds are like loans – essentially, you’ll be giving someone else the money with an agreement that it will be paid back in the future with some interest. There are numerous types of bonds you can put your $20 in, including government bonds and municipal bonds. These are often seen as less risky than stocks.

Mutual Funds

Mutual funds are groups of stocks and other forms of investments. Because a mutual fund is much more diverse than just one stock, it’s a better option for long-term investors who want to make the most of their money without taking on a ton of risk.

Exchange-Traded Funds

ETFs are like mutual funds in that they are groups of stocks and other investments. They have low fees but often cost more than $20 to get started. That’s not always the case, though, so be sure to do your research – ETFs are some of the safest ways to invest in the stock market.

Pay Off Debt

Here’s a simple solution for what you can do with your extra cash – pay off some of your debt. Whether it’s student loans or credit card debt that you’re dealing with, it might make sense to invest $20 in any outstanding debt you already have rather than opening up a new investment account.

Real Estate

You won’t have many options when it comes to investing in real estate with just $20.

However, it’s not totally off the table.

You can invest in a REIT (real estate investment trust). An REIT is a company that owns income-producing real estate, including warehouses, office and apartment buildings, shopping centers, hotels, and more. You invest a small portion of your cash and you can receive a payout later on.

In most cases, you’ll need to invest more than $20 to make sure you’re investing in a quality publicly traded REIT – but that’s certainly not always the case.

You can also give real estate crowdfunding a try. This will let you invest in specific portfolios or properties without needing to be a property manager or landlord. Most real estate crowdfunding sites require you to invest a minimum of $500 to get started, with the exception of one: Groundfloor.

With Groundfloor, you only need to commit to $10. You can choose to invest in high-yield, short-term real estate debt investments and get a return in as little as six months.

Real Estate Investing


Some people consider cryptocurrency to be a bit on the speculative side, but it can be a good way to invest money if you don’t have a ton to start with. Cryptocurrency can be volatile, with your money growing by 10 to 20% some days and falling by 30% the next.

You can invest in cryptocurrencies like Bitcoin, Bitcoin Cash, and Ethereum.

Peer to Peer Lending

Peer-to-peer lending is similar to investing in bonds in that you will be loaning your money to someone else and making money, in return, off the interest. Again, there are countless websites that can help you do this.

Invest in Your Education

Another easy way to invest your $20? This one doesn’t necessarily offer an immediate or even a tangible return, but it’s a great way to capitalize on the small amount of money you have available.

By putting your money toward taking courses on platforms like Udemy, you can invest in your education. Udemy is

Udemy courses allow for lifetime access and ease of use. The courses here don’t have deadlines and with thousands of topics to choose from, it’s easy to find a class that will help you build your skillset without breaking the bank.

Invest $20 with Investment Apps

Not sure you want to go the traditional route by investing in the stock market? Fortunately, the 21st century has afforded us many unique opportunities to invest $20 that simply weren’t available in years past.

When you invest in fractional shares, you buy just a small portion of a stock, making it easier for you to get started with a limited amount of money. Also known as micro-investing, this is a great way for you to dip your toe into investing.

Below are three superb apps to try.


Investment Apps for Fractional Shares-Public

Public is an investing platform that is meant to make you more social! You can share your investments with your family and friends, encouraging them to grow their money as you make money for yourself. The minimum investment is extremely low.

Click Here To Get Started


Investment Apps for Fractional Shares-Webull

Webull will let you expand your stock portfolio and even own fractional shares of top companies. The best news? There’s only a $5 minimum to get started!

Click Here To Get Started


Investment Apps for Fractional Shares-Acorns

Acorns is considered a robo-investing app that will round up all of your purchases to then invest. There are some management fees charged by the app – while these are small, it’s something to be considered with any investment account. That said, Acorns is a super convenient personal finance app to consider if you want “free money!”

Click Here To Get Started


Investment Apps for Fractional Shares-Stash

The Stash Investing App is a great place to start if you want to invest money in small amounts or begin investing as a newbie. With Stash, you’ll benefit from low account minimums and small monthly management fees – all in exchange for passive investment!

There are all kinds of investment options you can choose from and you’ll get a free $5 when you start, which is a big bonus if you’re only investing $20 to begin with.

Click Here To Get Started

Try a High Yield Savings Account

A high yield savings account is simply a type of bank account that offers a higher interest rate on your deposits than an ordinary bank account would.

Generally, you’ll have to open one of these online in order to get the best rates – your local financial institution typically won’t offer that kind of rate of return. Using a high yield savings account to stash your $20 is also a great way to save money to start an emergency fund to cover that unexpected emergency expense, too.

Final Tips on How to Invest $20 Wisely

Whether you’re investing directly in the stock market, in a high yield savings account, or some other method, these are some helpful tips to follow so that you can invest your money wisely.

First, diversify your investment portfolio. When it really comes down to it, how much money you can make will depend on spreading your money across multiple assets. This will lower your overall risk and make investing much safer.

So if you’re just investing in stocks, maybe you could also invest in real estate. You’ve only ever invested in commercial real estate, consider giving a robo advisor or another form of passive investing a try. Whatever you do, don’t put all your eggs in one basket, even if you aren’t investing serious money.

Look for low-risk opportunities with limited fees and a low minimum investment. If you aren’t sure exactly what to look for or where to put your initial investment, consider meeting with financial advisors who can help give you a better idea of a good investment strategy for you and your money.

Finally, stay in it for the long run. Sorry to say it, but you’re not going to make much money by just investing $20.

However, $20 is a great way to start investing – and over time, you might find that just a little money turns into a whole lot. So be patient and don’t be afraid to invest!

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Kevin Martin

Kevin is an ambitious entrepreneur that is obsessed with all things related to finance. From a young age, Kevin has always been involved with side hustles ranging from online selling to freelance work. Over the years, Kevin graduated from side hustles and started launching multiple online and offline businesses. Kevin is a serial entrepreneur who loves starting new businesses and exploring all things related to business and finance. He is constantly looking for new ways to save money, invest money, and create income streams.