Is $500 enough to get started when investing in shares in Australia?

If you’re new to investing, it’s understandable to wonder how much money you actually need before you can make your first move. Many new investors may assume they need thousands of dollars to start building a portfolio, but the rise of low-cost online brokers, fractional investing, and investing apps means you can begin with far less today.

So, yes: $500 is enough to begin investing. The key is understanding what you buy, how you manage fees, and how you plan to build on that first investment over time. 

What does $500 actually get you?

On the Australian Securities Exchange (ASX), most first-time purchases of individual companies must meet the Minimum Marketable Parcel (MMP) rule . This sets a minimum initial buy of $500 (excluding brokerage fees) for your first trade in a single company. So technically, you can get started with that amount, but it may only stretch far enough to buy into one company.

If you want more variety, some international brokers allow fractional share investing. That means your $500 can be divided into small portions of big global companies, or spread across multiple exchange-traded funds (ETFs).

For beginners, the main limitation is diversification. While $500 is enough to start, it isn’t usually enough to build a balanced portfolio all at once.

CHESS vs. custodial platforms

This $500 minimum depends on the ownership structure offered by your broker:

1. CHESS sponsored trades: The $500 MMP applies to trades where your shares are held under the Clearing House Electronic Subregister System (CHESS), which provides you with legal, direct ownership and a unique Holder Identification Number (HIN).
2. Custodial platforms: If you use a custodial platform, the $500 minimum is often waived, allowing you to make much smaller share purchases. These platforms hold the shares on your behalf in a pooled account (the custodial model), bypassing the ASX's MMP rule. They often allow for fractional share purchases.

Diversified investment options

Here are a few ways first-time investors could put their initial $500 to work:

Investment option	Description / Key features
ETFs (Exchange-Traded Funds)	Offer diversification through a bundle of companies. They are generally low cost and accessible for beginners.
Listed Investment Companies (LICs)	Provide exposure to a managed portfolio through a single purchase, and often have dividend reinvestment options.
Dividend Reinvestment Plans (DRPs)	Automatically reinvest dividends into more shares, helping you grow your position without extra out-of-pocket contributions.

Why fees matter when you’re investing small amounts

When your starting balance is $500, the impact of fees is magnified.

• Brokerage fees: A $15 fee on a $500 trade is a 3% cost upfront.
• Platform charges: Some brokers have monthly or annual account fees.
• ETF or fund management fees: These are ongoing charges you’ll pay each year.
• Currency conversion fees: Apply if you’re buying international shares.

Choosing low-fee platforms can help make your investment stretch further.

How $500 can grow over time

A small start can grow significantly when you keep adding to it. While stocks aren’t guaranteed to always go up, the scenario below shows consistency can matter more than the initial deposit.

When it might make sense to wait

You may choose to hold off or save a little more if:

• Brokerage or platform fees will take up a large percentage of your $500.
• You don’t yet have an emergency savings buffer.
• You want a more diversified starting point than a single stock.

If diversification is the goal, starting with ETFs can be a more practical entry point, giving you exposure to a mix of assets without a large upfront investment.

Tips to get the most from your first $500 investment

• Use low-cost brokers.
• Automate small, regular contributions.
• Spread your investing over time with dollar-cost averaging.
• Reinvest dividends where available.
• Keep an eye on fees so they don’t erode your returns.

$500 is enough to begin investing in shares, but it’s just the first step. What matters most is how you build on that foundation. By choosing low-fee options, adding to your investment consistently where sensible and affordable, and staying focused on long-term goals, even a modest starting amount can grow into something meaningful.