Investing in stocks or mutual funds can seem like a scary thing, after all, the risks could be very high. Add the word “micro” before it, and the fear sort of subsides, doesn’t it? It’s all about small, miniscule investments in stocks. Much of this can be done online and without any prior knowledge about the stock market.
How it Works
It’s about taking small amounts of money and putting them into stocks. You automatically get a portfolio tailored for you and all you need to do is sit back and watch your money grow incrementally. We must also add that there is still a chance you might lose money, but the risks are much less significant.
Your money typically goes into ETF (exchange trade funds), which helps spread your money around to hundreds of companies and therefore lowering the risk.
All this does not require any expertise on the stock market since the difficult legwork is done for you.
Low Barrier to Entry
Anyone can start micro-investing, and that’s because there is no minimum to start. You can go as low as 5 to 10 dollars if that’s all you have to spare. The younger you start, the better! And since there isn’t a minimum there is almost no excuse not to. It also gives your children (and maybe even you) the sense of saving and investing.
Many Americans aren’t saving enough for retirement, heck, not a lot of them are even saving anything at the end of the month. Paycheck to paycheck living is more and more widespread, and this is a way to hopefully counteract that.
There are no strategies needed, no over-wracking your brain, it’s just plain and simple easy, and it’s accessible to anyone.
Manage it With Apps
Everything can be done online nowadays and of course micro-investing has made its way into your phones in the form of apps and into your computers in the form of websites. Micro-investing is made easy with the existence of these apps and websites that let you set up your portfolio and never have to worry about it again. Like mentioned in Tips Dollar, you can have a lifestyle that properly merges spending and investing seamlessly.
While all other websites, if not all of them, promise lucrative returns, you should still give a glance at where your money is going, what sort of portfolio you have set up and the potential risks.
For micro-investment apps, a few of our favorite include: Acorn, Stash and Robinhood.
Some of these apps round your purchases up to the nearest dollar and handle everything for you automatically. Why not make your extra cash (even extra change) work for you?
A lot of people toss their spare change on the counter or find some nickels wedged between couch cushions. What if you could take all of that and more and grow it into a larger amount? With no minimum to start, micro-investing allows you to do just that. Remember, the word “micro” is at the forefront, so don’t expect exponential returns, it’s a small start after all. On the flipside, micro-investments also equal micro-risks.