How Much Money Do I Need to Start Investing?

1. Start with safety before you invest a single dollar

The amount you invest only matters after your basic safety net is in place. If you skip this step, even a good portfolio can become a problem the first time life hits you.

Emergency fund first

A common rule of thumb is to hold 3–6 months of essential expenses in cash (or a safe savings account) before committing serious money to long-term investing.

• It stops you from selling investments in a crash just to pay bills.
• It gives you breathing room for job changes, moves, and unexpected expenses.

Deal with high-interest debt

If you’re paying very high interest, investing usually comes second. Paying off 18% APR debt is a guaranteed “return” that markets rarely beat with certainty.

2. There is no universal “minimum amount” to start

Many beginners delay for years because they think they need thousands. In practice, the constraint is usually friction, not “minimums”:

• Broker access: not every broker accepts every country.
• FX costs: spreads and fees on converting your currency to USD.
• Trading costs: commissions and minimum ticket fees (if any).

3. Small monthly amounts still matter (if you actually keep doing them)

The habit matters more than the starting amount. Small contributions become real money when repeated for years. The table above shows the basic idea.

4. Lump sum vs monthly contributions

• Lump sum: more time invested; higher expected long-run return; emotionally harder if markets drop right after.
• DCA: slower entry; often easier psychologically; can reduce “regret” risk.

Non-US investors should add a practical rule: if FX fees are meaningfully fixed per transfer, do fewer, larger transfers. Once the cash is at the broker, you can still invest it gradually if needed.

5. How much of your income should you invest?

• 5–10% of take-home income if you’re starting, rebuilding savings, or your situation is tight.
• 10–15% as a solid long-term default target for many people.
• 15–20%+ if you’re stable and aiming aggressive long-term goals.

6. Extra considerations when investing in US assets from abroad

• Eligibility: some brokers are US-only; global access is not guaranteed.
• FX friction: spreads matter; repeated tiny conversions can be expensive.
• Taxes: US withholding and local taxes can change your net return.
• Product access: some regions restrict specific US ETFs; you may need locally compliant equivalents.

7. Quick checklist (decide your number in 2 minutes)

• I have an emergency fund (3–6 months essentials).
• I’m not carrying high-interest debt (or I’m killing it fast).
• I picked a monthly amount I can repeat for years.
• I know my broker’s funding/FX costs (and chose a deposit frequency).
• I’m not investing money I’ll need in 1–3 years.