How to start investing when you are broke!

Think you need a lot of money to start investing? Think again. Learn how I started building wealth even when I was broke, the power of early investing, and how you can start today—no matter your financial situation.

Lifestyle-Driven Savings™
Ivy, LyfStyled

From Paycheck to Paycheck to My First Investment

I remember early in my career, when I was no longer relying on my parents for money—but I was still broke. Living paycheck to paycheck, I felt like I could barely keep up, let alone think about investing.

Then life hit me with a wake-up call.

A roommate unexpectedly moved out, leaving me stuck paying double rent for three months. The financial squeeze was real, and I had no backup plan. That’s when it hit me:

Financial emergencies happen no matter your income level.
You either prepare for them or let them take you down.

That was the moment I decided to stop being naïve and start being intentional with my money. I wasn’t going to let another unexpected expense leave me scrambling. I started saving and investing, even with the little I had.

And here’s what I learned along the way.

Why Investing Matters, Even When You’re Broke

Inflation and Taxes Eat Away at Your Money

If you’re not investing, you’re losing money every single day. Here’s why:

Inflation: Prices go up over time, meaning your cash loses purchasing power. A $10 meal today won’t cost the same in 10 years.

Taxes: Your paycheck might increase, but so do taxes, leaving you with less take-home pay.

According to the U.S. Bureau of Labor Statistics, the average inflation rate over the past decade has been around 2-3% annually, meaning that if your savings aren’t growing at least that much, you’re effectively losing money.

We have covered building up savings that support your life goals in other posts. It’s important to also grow your wealth by starting to invest. However, keeping money in a savings account alone won’t make it grow. You need investments that outpace inflation to build real wealth.

Investing is Free Money (Yes, Really!)

When I first started learning about investing, I realized that not investing meant I was leaving free money on the table.

Dividends: Some investments pay you just for holding them. Imagine getting paid simply for owning stock. That’s what being a shareholder of a dividend paying stock essentially means. The company shares the profits they have made by paying out dividends to their shareholders.

Stock Growth: Companies increase in value over time, meaning your initial investment can be worth far more in the future. My personal experience with this was the phenomenal recovery that the stock market made after going deep into the red at the begin of the COVID pandemic. I bought share during this period and was luck to gain over 700% growth within 10months of holding the shares.

Don’t miss out on investing in the stock market. Money invested wisely has the potential to work for you, even while you sleep.

Investing Has Never Been Easier

Gone are the days when you needed thousands of dollars or a financial advisor to start investing. Today, you can:

Buy fractional shares for as little as $1 (platforms like Robinhood, M1 Finance, and Public make this possible).
Automate your investments with robo-advisors or copy-trading, so you don’t have to track the market daily.
Start small, learn, and scale up. You don’t need to be an expert to begin.

If you have money for coffee, you have money to invest. Start small and build from there.

Investing Has Never Been Easier

When I started investing, I didn’t have much. But I had time. And time is one of the biggest advantages in investing.

Why? Compound interest.

If you invest $100/month at 8% interest starting at:

Age 25 → $349,100 by 65
Age 35 → $149,000 by 65
Age 45 → $60,000 by 65

The earlier you start, the more your money grows, thanks to compound interest (Einstein called it the eighth wonder of the world!).

Investing small amounts early is better than waiting for the “right time.”

“If you don’t find a way to make money while you sleep, you will work until you die.”

The Best Investment You Can Make Today

Since we all have different circumstances, the best investment is the one that fits your:

Timeframe – How long can you leave your money invested?
Financial Goals – Are you investing for retirement, a home, or passive income?
Risk Tolerance – How comfortable are you with market fluctuations?
Experience Level – Are you new to investing or already familiar with the markets?

Once you determine these factors, you can decide where to start investing. Some beginner-friendly options include:

Index Funds & ETFs – Low-cost, diversified investments with steady growth.
Dividend Stocks – Companies that pay you passive income over time.
Real Estate Crowdfunding – Own real estate without buying physical property.
Robo-Advisors – Automated platforms that invest for you based on your risk level.

Wealth Starts With a Single Step

The hard truth is that being broke is no excuse for not investing. Even when I had very little, I forced myself to start building wealth. And that decision changed my financial future.