Here's How To Start Building Wealth With Only $20
According to Fidelity’s 2026 State of Retirement Planning Study, 72% of Americans expect to retire on their own terms, with 74% noting that they had a plan to reach their financial goals. While this can be intimidating to read as someone who’s just getting into personal finance, the good news is that we all have to start somewhere. Even if you can only commit $20 or have minimal financial resources, you can begin building toward your future.
Here’s how you can start building wealth with only $20.
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Start With Small Contributions
“Though $20 may not be enough cash to consider oneself capital-rich, employing that amount as a starting point can be the stepping-stone to positive financial habits,” said Daniel Gleich, a financial expert and current board member at Madison Trust Company.
While it can be intimidating to see how much money wealthy people have accumulated, you have to remember that they started somewhere, too. You’ll want to start small until you’re able to increase your income and can set more money aside. The goal is to get into the habit of setting money aside so you're ready when your income goes up.
Build the Habit of Investing With $20
“That $20 won’t make immediate substantial wealth, but it will create a system,” remarked E.J. Simonsen, a financial advisor and founder at EIDLexit. “The goal is to take that first investment and make it a habit to invest another $20 every week or month.”
The experts agreed that your $20 contributions will help you build the habit of investing. However, they added the cautionary warning that the realistic timeline is measured in years (not weeks). The good news is that even $20 a week can add up to over $1,000 in annual savings, without even factoring in compound interest.
Invest In Index Funds
Gleich noted that many brokerages offer S&P 500 index funds or ETFs that are relatively low-cost and require only a small initial investment. By getting started with $20, you learn how to open an account and the entire process, which will be helpful when you’re able to invest more.
Open Your Retirement Accounts
Gleich emphasized that by investing through a traditional IRA, you’re potentially allowing $20 to compound as your investments earn income. If you’re a young investor looking to build a retirement portfolio, that $20 invested weekly can go a long way in 40 years.
Find a High-Yield Savings Account
If you’re not ready to start investing, consider a high-yield savings account where you can invest $20 weekly or whenever you can to build an emergency fund. This financial buffer can potentially bail you out one day when an unexpected expense pops up.
Invest In Yourself
Sometimes the best way to invest $20, whether in one shot or over time, is to invest it in increasing your future earnings. Gleich suggested considering taking an online course, joining a networking event or earning an industry certification, which could lead to greater employment opportunities and wealth.
Simonsen took it a step further and stated that he would split up every $20 decision between investing and self-development.
“Invest $10 in a broad stock market index fund through a brokerage that offers fractional shares," he said. "Put the other $10 to work by investing in a skill that can increase your earning potential, such as bookkeeping, negotiation, entrepreneurship, digital marketing or an online course you can apply to today.”
By developing new skills, you can qualify for higher-paying gigs that will allow you to invest more.
Increase Your Contributions
As you start to make more money in your career or you begin a side hustle that helps you boost your income, you can begin investing more. Since you’ve already built the habit, you’ll have options.
Gleich stressed that the key to building wealth with small amounts is to be consistent, roll over your principal and interest into new investments and keep on planning for the future.
Stay Patient and Focus on the Long Run
If you want to start building wealth with only $20, you want to stop focusing on how much money you have and start examining your behaviors.
“Creating lasting wealth has much more to do with consistently investing, growing your earning power, living below your means, and avoiding debt than any single particular investment," Simonsen said.
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This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal or tax advice.
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