Micro-investing: Is This Right For You?

Micro investing is investing small sums of money on a regular basis. Compared to other investment options like stock purchases or real estate, it requires large amounts and your money needs to be tucked away for a long period and wait for it to grow. With micro-investing, you can invest your money without having to sacrifice some of your other expenses such as food, clothing, or travels.

Micro-investing is a new concept because in the past when people hear the word “investing” people always assume that they need to shell out large sums of cash to start an investment. But these days, micro-investing has become popular especially to millennials or those who are just new to investing.

There are many advantages of micro-investing. Aside from not needing a huge capital to invest, you can use apps to automate your investments. The app that you use will deduct a small amount of money from your debit card or bank account and automatically transfer the money to your investment. Most of the time you are not realizing that you are saving a lot of money.

Here are some of the micro-investment apps that allow you to save and invest your money into small sums. These apps will make saving more convenient and easy for you. Just connect these apps to your debit card, and the micro-investing app will round up your purchases and automate your savings.

  1. Robinhood

If you are looking for an app that allows you to open a free account choose Robinhood. Robinhood doesn’t charge commissions and transferring funds to your bank is also free.

This app is designed by the developers with the new investors in mind. It is easy to use, no confusing language, and a totally no-frills micro-investment app. With Robinhood, you can also trade full stocks and buy and sell with bitcoin. You are able to be in control of your investments by viewing the real-time market data.

The app is available on iTunes and Google Play

  • Stash

This is a micro-investment app that is great for beginners who want to oversee their investments. It doesn’t charge trading fees or commissions and they are very transparent with fees being charged to the users.

Stash suggests that reading their published investor’s guide first before making any investments to make sure that you are educated and comfortable investing. This app allows you to choose types of companies you’d like to invest in. You can also choose the causes or advocacies that you want to support and invest your money in them.

After choosing these companies, you will see a list of companies that matches your preferences. Once you have decided, you can add it to your Stash portfolio and choose “Auto-Stash” where you allow the app how much money can be deducted on your account.

Stash is available on iPhone and Android devices, but only available for access for US residents for now.

  • Acorns

Consider Acorn if you are a “hands-off” type of investor and let the app work its magic. Once you connect your debit card or bank account to Acorns, it will round up your purchases and deposit the money to your Acorns account. Acorns allows you to choose where to invest. But you can also set it and forget it and let the app invest for you.

  • Betterment

Betterment is another hands-off app for you. Though it is a hands-off app, it can give you access to different financial advisors who can guide you in your decision on where to invest your money.

When you open an account with Betterment, you’ll have two options: Betterment Digital and Betterment Premium. The former is the less complicated of the two because it doesn’t require minimum funds on the account and a small fee (0.25% of your assets). On the other hand, Betterment Premium has a higher fee (0.4% of your assets) but gives you easier access to financial advisors.

Will micro-investing work for you?

Micro-investment presents a huge potential to be helpful for beginner investors or even students who have lived on a small income. Micro-investing apps are designed to motivate you in investing your hard-earned money even in small amounts. But to be completely honest, micro-investing is not ideal when you are approaching your retirement years. Although you don’t need a lot to start saving, you will get a small return. Your goals of becoming a millionaire or early retirement cannot be fulfilled by just investing small amounts. But micro-investing helps you build a habit of saving, managing your loans and relationships with licensed moneylenders as well as investing your money in an easy and automated way.

About RJ Frometa

Head Honcho, Editor in Chief and writer here on VENTS. I don't like walking on the beach, but I love playing the guitar and geeking out about music. I am also a movie maniac and 6 hours sleeper.

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