When most investors get started, they usually start investing as much as they can.
$50 here, $200 there - but how much should you invest in stocks?
The truth: There’s no magic number. Everyone’s number for what they should invest in stocks is going to be different.
But what will be true for everyone trying to be serious investors: Build a system that pays you first, and forces you to invest before you spend.
Once you build the system, most investors can put it on autopilot and let the wealth building begin.
Let's break down exactly how to figure out your number - this article will show you how to build a system for your money, what you should do before you invest, and more.
Once you know your magic number to invest in stocks, the question will be: Which stocks to invest in?
Our CEO Jaspreet Singh is hosting a free lives investor workshop on March 18th where he's breaking down how to spot market shifts and potential investing opportunities.
Start With One Rule: Invest Before You Spend
The biggest mistake beginner investors make is trying to invest whatever is "left over" at the end of the month.
Spoiler: there's never anything left over.
The fix is building a system where you buy assets before you even see a dollar.
The 75-15-10 plan does exactly that.
This plan states:
- Spend no more than 75 cents of every dollar you earn.
- Invest a minimum of 15 cents of every dollar.
- Save a minimum of 10 cents of every dollar.
If you make $5,000 per month, that means at least $750 goes straight to your investments.
Want to move faster? Bump it to the 50-30-20 plan - spend 50%, invest 30%, save 20%.
The more aggressive you are now, the sooner your portfolio does the heavy lifting for you.
The key here is the system.
As you earn more, this plan will scale with you - so the amount you should invest in stocks will likely change over time.
Next, Build Your Safety Net
Before you put serious money into stocks, you need an emergency fund.
Why? Because life happens. You break your arm or you hit a pothole on your way home from the office and get a flat tire.
Without an emergency fund, you’ll be forced to sell off your stocks or go into debt in order to pay for it.
That impacts how much you should be investing in stocks - and it takes away from your ability to build wealth.
An emergency fund means saving 3 to 12 months of living expenses sitting in cash - not invested, not in the market.
Just sitting there, ready.
Why 3 to 12 months? It depends on where you are in life.
- If you're in your 20s with low expenses and a stable job, 3 months is fine.
- If you have a family, a mortgage, or an irregular income, aim for 6 to 12 months.
Once your emergency fund is fully funded, stop saving and redirect that money to your investments.
Your plan now becomes 75-25. Spend 75%, invest 25%.
At this point, your money can really start to multiple.
If you skip the emergency fund and the market drops 20%, guess what you have to sell to cover an unexpected expense? Your investments - right when they're down.
So What's the Right Dollar Amount to Start With?
Answer: There isn't one.
The question isn't how much you need to start - it's whether you start at all and whether you stay consistent.
Here's an example: Say you invest just $100 per month into a dividend-paying stock.
Add a modest starting position, reinvest everything and keep it going.
- Year 5: Your portfolio is worth roughly $12,400. You've invested about $8,600 total.
- Year 10: Portfolio value climbs to around $29,300. Dividend income alone is over $1,100 a year.
- Year 20: You're sitting on roughly $105,000. Quarterly dividends hit $1,000.
That's $100 a month. Less than most people spend on subscriptions they forgot they had.
The lesson isn't that $100 is the number. The lesson is that consistency compounds.
So, create a system that makes sense, and put your investing on autopilot.
How Much of Your Portfolio Should Be in Stocks?
Once you have money to invest, you need to know how to actually split it up.
A common starting point is this: the younger you are, the more of your portfolio could be in stocks.
Here's how it breaks down:
| Your Stage | Stocks | Fixed Income (Bonds, CDs, etc.) |
| Ages 20-35 | 80-90% | 10-20% |
| Ages 35-50 | 60-70% | 30-40% |
| Ages 50-65 | 40-50% | 50-60% |
| Ages 65+ | 30-40% | 60-70% |
The reason? If the market drops 30% when you're 28, you have decades to recover.
If it drops 30% the year you retire, that's a real problem.
That said, these are guidelines - not gospel. Your actual allocation depends on three things:
- Time horizon - When do you need this money?
- Risk tolerance - How well do you sleep when your portfolio is down?
- Income needs - Do you need cash flow now, or are you building for later?
If seeing your portfolio drop $5,000 makes you want to sell everything, you probably shouldn't be 90% in stocks yet - regardless of your age.
What If You Can't Invest Much Right Now?
Investing is the key to wealth - and starting with even $1 is better than not investing at all.
Many brokerages allow investors to buy fractional shares of a stock - that means you’re not buying a whole share, just the amount you can actually spend.
Note: Investing $1 will not make you wealthy. But, it will eventually compound.
If you lose your job or hit a rough patch, don't stop investing - reduce your contribution to whatever you can afford.
Even $50 a month keeps the habit alive.
When income drops, investors who quit entirely almost never restart.
That’s because they lose the habit - they drop the investor mindset altogether.
When income increases, increase your contributions immediately.
Before you get used to the new paycheck and before lifestyle inflation sneaks in.
This is how you build real wealth - not by earning more, but by investing the difference.
How Much Should You Invest In Stocks? Final Thoughts
How much should you invest in stocks?
It depends - if you’re in the right position, without much debt, at minimum, 15% of everything you earn.
Once your emergency fund is built, 25% or more.
However, if you have a lot of debt, or not a lot of money, invest what you can.
The idea is to get started and work towards building a system.
Eventually, that system will scale with you and build wealth as you go.
The dollar amount matters less than the habit.
A $100/month investor who never misses a month will out-build a $1,000/month investor who stops and starts.
That's how wealth gets built.
Once you have the system built, you’re ready to invest.
Join our CEO Jaspreet Singh on March 18th for a free live investor workshop where he’s breaking down how to spot market shifts and potential investing opportunities.