Market Briefs Newsletter

Subscribe to our FREE finance & business newsletter to get financial news you can finally use.

Thanks for signing up to Market Briefs! Please check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder. 

Be sure to read our Privacy Policy & Terms of Use.

  • Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
Minority Mindset

Minority Mindset

Defy all odds.

  • Home
  • About
  • Blog
    • WEALTH
    • REAL ESTATE
    • CRYPTO
    • STOCKS
  • PRODUCTS
  • MONEY 101
  • GUAC TALK
Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

See more from Stock Market Investing

Are Fractional Shares Worth It? – Investing With Little Money

June 8, 2022 by Makenzi Wood

Makenzi Wood June 8, 2022

Are Fractional Shares Worth It

Disclaimer

We only endorse products that we truly believe in. Some of the links below may earn us some extra guac at no additional cost to you. Please pass the chips & thank you for feeding our habit.

If you’re new to investing, chances are, you don’t have thousands of dollars in your bank account. That was certainly my case when I started investing. 

I barely earned $30,000 a year, but I knew how important it was to invest while I was still young (hello, compound interest). I could barely afford rent, so investing was a struggle. Fortunately, around the same time, fractional shares were picking up steam thanks to the power of personal finance apps. 

If you buy a fractional share, you’re buying less than a full share. That might sound ineffective, but fractional shares make expensive stock in companies like Google or Apple more affordable. 

Plus, fractional shares allow you to put in a set dollar amount in exchange for a teeny tiny portion of a share. For example, when I started investing via Stockpile in 2017, for $25 I got access to shares in Amazon and Tesla—which are now worth 3X more than the $25 I put in. 

In my experience, fractional shares are a great way to get started with investing, even if you don’t have a lot of money. In fact, some platforms will allow you to start investing for just $1. 

But are fractional shares really worth it? Let’s look at the pros and cons of fractional shares, as well as where you can buy fractional shares.

PlatformPromotionsLink
Get a cash bonus of $30-$500 when you deposit $1,000+ in the first two weeks.Invest Today
Get one free stock priced up to $225 when you link a bank account.Invest Today
Get two free stocks when you deposit $5 within 30 days.Invest Today
Start investing with as little as $1.Invest Today

Are Fractional Shares Worth It?

Yes, fractional shares are worth it. Fractional shares make investing both fast and affordable, especially for new investors. With fractional investing, investors can: 

  • Invest set dollar amounts
  • Diversify investments
  • Do dollar-cost averaging

Of course, they aren’t perfect. Fractional shares still have some downsides, including: 

  • Limited availability: Not all brokerages offer fractional shares, and they’re less popular if you’re investing outside of the United States. 
  • Fees: Again, this depends on your broker, but if you’re making a larger quantity of small trades with a broker that charges per transaction, the costs add up. 

Without fractional shares, a single share in Tesla would cost about $1,000. Unless you’re Daddy Warbucks, you don’t have that kind of money lying around. In this situation, you either need to invest your money in cheaper stock (and miss out on Tesla’s gains in the market), or save up your money to invest. Both of those options stink. 

So, fractional shares may be worth it for you if you can’t afford a full share. If you don’t have a lot of money, or if you’re still young, you might want to consider this option.

Read all about the full pros and cons of fractional shares here.

Start Investing Today With M1 Finance

Platforms That Allow You To Invest With Fractional Shares

If you’re already investing, that’s great! You can always ask your existing broker if they offer fractional shares. 

But what if you’re new to investing, or your broker doesn’t do fractional shares? Because fractional shares work differently on the broker’s side (it’s more work for them), not all brokers offer it. 

After a little research, I’ve found that these platforms are the easiest and most affordable way to start investing in fractional shares: 

  • Acorns: Acorns made it easy for me to round up my debit card purchases and invest the difference. So, a lunch that cost $10.50 was rounded up to $11, with $0.50 going towards fractional shares.
  • Betterment: Like Acorns, Betterment offers fractional shares in ETFs instead of individual companies, so you actually get exposure to a collection of companies at once. It’s a great way to diversify your portfolio while putting your investments on autopilot.
  • Fidelity: For as little as $1, Fidelity allows you to choose from 7,000 stocks or ETFs.
  • M1 Finance: M1’s curated Pies are perfect for rebalancing your fractional shares over time—it’s as simple as tapping the “Rebalance” button in your account.
  • Robinhood: Like Fidelity, Robinhood also lets you buy fractional shares for as little as $1, with no commission fees. 
  • Schwab: Starting at $5, Schwab allows you to buy stock in companies on the S&P 500.
  • SoFi: SoFi doesn’t charge any commission fees, so when you purchase a stock for $5, they invest the entire amount you put in. 
  • Stash: Buy fractional shares in either individual stocks or ETFs through Stash. The platform allows for automatic investing so you can put your investments on autopilot.
  • Stockpile: Stockpile was specifically designed for fractional shares. You can even buy stocks for yourself or loved ones with special Stockpile gift cards!

Can You Make Money With Fractional Shares?

The point of investing is to make your money grow. So, can you make money with fractional shares? 

Absolutely! But this isn’t about getting rich quickly. When I invested in fractional shares with Acorns, I built up a modest nest egg after a full year of investing. 

To make money with fractional shares, you need to let your money grow and then sell it once the stock is worth more than you paid for it. You can do both buying and selling through your investment app, so it should be easy as pie to redeem your earnings. 

You can also earn money with fractional shares if you invest in companies that give out dividends to their investors. 

Like any investment, fractional shares are never guaranteed. They still carry the risks you face if you buy a full share. Of course, you’ll lose less money if you buy a fractional share, so the good news is that it can hedge against huge losses.

Use M1 Finance To Invest In Fractional Shares Today

Yes: Fractional Shares Are Worth It

The main advantage of fractional shares is that they’re a smaller, more manageable way to get involved in the stock market. If you aren’t sure about whether investing in stocks is for you, a fractional share might be a good way to ease your way into it. 

But keep in mind that you’re investing a relatively small amount of money. And that means you won’t get as much return on it as you would with a full share. Still, it’s a great place to start, and you may want to move up to full shares in the future.

At any rate, fractional shares have revolutionized modern investing. I was able to start investing when I was 22 years old (and flat broke) thanks to fractional shares. With fractional shares, everyday investors like myself now have access to a part of the market that was previously too expensive, and that’s a win.

Keep Reading:

  • How to Create a Stock Market Investment Plan
  • Best Age To Start Investing – Here’s How To Start
  • How To Start Investing With $100 Per Month

Get the Minority Mindset Stock Market 101 Guide

Written by Makenzi Wood.

Kenzi is a writer obsessed with frugal living. She's a reformed shopaholic who's now happily debt-free and working towards FIRE.

Primary Sidebar

Advertiser Disclosure

Our promise to you.

Minority Mindset, LLC is an independent, advertising-supported publisher. We are not an investment advisor. Always do your own due diligence and never blindly listen to a random article on the internet. We do our best to provide financial education with our free videos, articles, tools, and other self-help content. But these are for informational purposes only, they’re not investment advice.

Minority Mindset does not and cannot guarantee the accuracy or applicability of any information regarding your individual circumstances. The examples we provide are hypothetical and we encourage you to get advice from a qualified professional regarding specific investment, tax, legal, and financial issues. Previous market performance does not guarantee future performance.

We want everyone to be able to make educated financial decisions. We do not feature every company or financial product available. However, we’re proud of the financial education and guidance that we provide at no charge.

We’re paid by our brand partners and advertisers. This may influence which products we mention, review, and where they appear on our site. But it does not affect our recommendations or advice.

More From Stock Market Investing

  • Is SoFi Legit? Using SoFi To Invest
  • How Does The Stock Market Work
  • Are Fractional Shares Worth It? - Investing With Little Money
  • Investing In Fractional Shares - The Pros And Cons

Get Your FREE Guide To The Stock Market

& our daily newsletter

Thanks for signing up for our financial education emails! Check your email to confirm your subscription. If you don't see the email in an hour, check your spam and promotions folder.

Be sure to read our Privacy Policy & Terms of Use.

Featured Stock Market Investing Posts

Is SoFi Legit? Using SoFi To Invest

How Does The Stock Market Work

How Does The Stock Market Work

Are Fractional Shares Worth It

Are Fractional Shares Worth It? - Investing With Little Money

Pros And Cons Of Fractional Shares

Investing In Fractional Shares - The Pros And Cons

The Latest On Stock Market Investing

Stock Market Investing Accounts

Best Stock Market Investing Accounts for 2022

M1 Finance Review

The Ultimate M1 Finance Review - Great For Experienced Investors

Robinhood Review

Robinhood Review - How To Use Robinhood In 2022

Webull Alternatives

Webull Alternatives To Consider - Top Investing Apps In 2022

Top 5 Investing Apps With Instant Deposit

The Top 5 Investing Apps with Instant Deposit

What Is M1 Finance

What is M1 Finance? How to Start Investing with M1 Finance

How To Invest in Stocks For Beginners In 2022

How To Invest In Stocks For Beginners - Ultimate Guide

As funny as meme stocks are should you really invest in them?

Understanding Meme Stocks - Proceed With Caution

A Beginners Guide to Stock Market Investing

A Beginner's Guide to Stock Market Investing

What are earnings reports

What Are Earnings Reports and What Do They Mean For My Investments?

Footer

Keep Hustlin’

Company

  • About Us
  • Store

Help

  • Contact Us
  • Advertise
  • YouTube

Legal

  • Privacy Policy
  • GDPR Opt-Out
  • Comment Policy
  • Terms of Use

Follow us on:

Disclaimer: The information on this site is of a general nature only. It does not take your specific needs or circumstances into consideration. You should look at your own personal situation and requirements, and seek independent professional advice, before making any financial decisions. Our content is provided for informational purposes only, and no content that is provided or included in our products or services is intended for trading or investing purposes. We will not be liable for the accuracy, usefulness, or availability of any information transmitted and/or made available by way of our products or services, and shall not be responsible or liable for any trading and/or investment decisions made by you based on any such information. For a further understanding of this Disclaimer and use of our site, please see the information contained in our Terms of Use and Advertising Disclaimer.

Minority Mindset may earn a portion of sales from products that are purchased or recommended through our site as part of our Affiliate Partnership with retailers and brands.

Minority Mindset has partnered with CardRatings for our coverage of credit card products. Minority Mindset and CardRatings may receive a commission from card issuers.

© 2022 Minority Mindset, LLC. All Rights Reserved.