One of the biggest myths in investing is that you need thousands of dollars to get started.
But thanks to fractional shares, that’s no longer true.
Today, you can invest in companies like Apple, Amazon, or Tesla with just $1 — making the U.S. stock market more accessible than ever.
In this article, you’ll learn what fractional shares are, how they work, their advantages, and how you can use them to start building your investment portfolio — even on a tight budget.
What Are Fractional Shares?
A fractional share is a portion of a full share of a stock or ETF.
Instead of needing to buy a whole share (which can cost hundreds or even thousands of dollars), you can buy just a slice of it — based on the dollar amount you want to invest.
✅ Example: If Amazon stock costs $3,000 and you only have $30, you can buy 1/100th of a share.
It’s like buying a slice of pizza instead of the whole pie — you still enjoy the benefits, just in a smaller portion.
How Do Fractional Shares Work?
Fractional investing lets you:
- Choose a dollar amount to invest (e.g., $10, $25, $100)
- The platform automatically calculates how much of a share that buys
- You earn returns proportionally — including dividends and price gains
✅ You don’t miss out just because you can’t afford full shares.
Most platforms pool fractional shares behind the scenes, so the buying and selling experience feels seamless to you.
Benefits of Investing With Fractional Shares
1. Start With Any Budget
Even with just $5 or $10, you can become an investor today.
✅ This removes the biggest barrier to entry — making investing truly accessible to everyone.
2. Invest in Expensive Stocks
You don’t need $500 to own a share of Tesla or $3,000 for Amazon.
Fractional shares allow you to invest in high-profile companies without waiting.
3. Easy Diversification
Instead of buying one stock, you can buy small portions of many stocks or ETFs.
✅ Even with $100, you can build a diversified mini-portfolio.
4. Automatic Investing
Many brokers let you:
- Set recurring investments (e.g., $25/week)
- Reinvest dividends into fractional shares
- Build wealth quietly and consistently
5. Makes Investing More Educational
Fractional investing lets you experiment, learn, and build confidence without high risk.
✅ It’s perfect for beginners who want to learn by doing.
Which Platforms Offer Fractional Shares?
Many top U.S. brokers now offer fractional share investing, including:
| Broker | Minimum Investment | Features |
|---|---|---|
| Fidelity | $1 | Fractional shares + DRIP |
| Charles Schwab | $5 | Great tools and support |
| Robinhood | $1 | Easy mobile interface |
| SoFi Invest | $5 | Automated investing available |
| M1 Finance | $1 | Build custom portfolios (pies) |
✅ All offer commission-free trading and access to major U.S. stocks and ETFs.
How to Start Investing With Fractional Shares
Step 1: Open a Brokerage Account
Choose one of the brokers listed above based on your preferences (interface, features, etc.).
Step 2: Fund Your Account
Transfer money from your bank — even a small amount is enough to start.
Step 3: Choose Your Stocks or ETFs
Pick based on:
- Companies you believe in (Apple, Microsoft, etc.)
- Broad-market ETFs for diversification (e.g., VTI, VOO, QQQ)
✅ You can invest a fixed dollar amount into any stock or ETF — no need to worry about share price.
Step 4: Set a Recurring Schedule (Optional)
Automate your investments:
- $10 every Monday
- $50 each payday
- Reinvest dividends
✅ Consistency is more powerful than timing the market.
Step 5: Track and Learn
Watch how your fractional shares grow over time.
✅ Learn how prices fluctuate, how dividends are paid, and how compounding works.
Sample Beginner Portfolio With $100
| Investment | Allocation | Amount Invested |
|---|---|---|
| Apple (AAPL) | 25% | $25 |
| S&P 500 ETF (VOO) | 25% | $25 |
| Microsoft (MSFT) | 25% | $25 |
| Vanguard Total Bond ETF (BND) | 25% | $25 |
✅ This setup provides growth, diversification, and balance — all with just $100.
Things to Keep in Mind
- You still pay taxes on dividends and capital gains — even on fractions
- Not all stocks may be available in fractional format
- Order types may be limited to market orders only
- You may not have shareholder voting rights for fractional shares
✅ These trade-offs are minor compared to the accessibility they offer.
Final Thoughts: Start Small, Think Big
You don’t need to be rich to invest — you just need to start.
Fractional shares make it possible for anyone to own a piece of the companies and funds that shape the world.
So whether you have $5 or $500, take that first step.
Your future wealth will thank you.