In today’s world anybody can invest unlike the past where investing was meant for the rich and people who are financially buoyant and the average man shy away from investing while the poor pretend to not understand it but in recent times, thanks to the economic growth structure everybody and anybody can invest without worrying about their finance, expenses or their bank accounts through Micro investing.
WHAT IS MICRO INVESTING?
Micro investing also referred to as “spare change investing” basically means investing little amounts of money regularly and in turn you earn returns slowly unlike allowing your cash sit in a bank account. The name spare change investing you can invest tiny amounts of money which does not require you changing your lifestyle. Fortunately there are numerous Micro investing apps that allows you save as little as $5.
IS MICRO INVESTING A GOOD IDEA?
Micro investing is a brilliant idea especially if you are starting new and trying to pave your way into the investing world. But you should have it at the back of your mind that you are Micro investing i.e you are investing very little hence you should expect little in return.
Micro investing is excellent when you are saving for a day of need, a vacation or probably you are just trying to master the art of investing but I can’t say it is excellent for those planning for their retirement.
CAN YOU MAKE MONEY FROM MICRO INVESTING?
The sole purpose of investing is in order to earn so if the question on you mind is “if you can make money from micro investing” then the answer is yes you can earn from micro investing and you shouldn’t really be wasting time doubting for the right time to invest is now. Although it is not a fast way of making money, it is more like a subtle manner of preparing you for the the bigger markets while you earn little in return (depending on your input).
HOW DOES MICRO INVESTING PLATFORM WORK?
When you think of micro investing platforms, think of an app that allows you save small amounts of money as often as you wish. This app are usually connected to your normal bank card maybe your debit or credit cards and automatically round up any amount spent using your debit card and deposit the extra in your Micro investment account.
For instance when you get a cup of coffee or cake for $4.50, the app will approximate it to $5.00 which you might not really take note of and deposit the extra $0.50 into your investment account. Interesting right? Now you are probably wondering where all the little cash goes to.
The fantastic thing is that they invest all that extra money in ETFs (Exchange Trade Funds) on your behalf which comprises of several bonds and real estate and in turn you can purchase fractional shares through ETFs which on a normal day you shy away from.
BENEFITS OF MICRO INVESTING
There are several benefits that comes from Micro investing, especially when you can’t drop large amounts at a time and need a more simpler alternative method to save and invest. Let’s look at some of the benefits.
AFFORDABILITY: in micro investing, one does not need a huge amount to start saving, you can save your spare change daily or weekly of steady saving.
EASY INVESTMENT: the money saved is automatically used to invest in stocks and prior understanding of investing is necessarily not needed.
SIMPLE TO USE: it does not require any long process and you are not required to fill lengthy or unnecessary forms.
INSTILLATING SAVING HABIT: it helps people develop the habit of saving in people without compulsion.
LOW RISK: you get to learn the basis of investing without being scared of losing your money considering you are only saving little.
STEP BY STEP GUIDE ON HOW TO MICRO INVEST
STEP 1: Make research on different investment apps in order to find the one that is best for your goals.
STEP 2: Create a Micro investment account. To do this it will require some personal information like your address, bank information, email address and so on.
STEP 3: After creating an account, you will find your bank information and you will be requested to link your debit card. Some apps might perform a deposit just to verify your account before finally linking it up with your micro investment account.
STEP 4: Funding your account with the minimum balance is the next step. In some app you are required to sign up with $10 while some require you to sign up with $5. After you’ve linked your account you can then deposit and start investing.
STEP 5: you are required to choose your risk level which can be conservative, moderate or aggressive when choosing stock to invest in.
STEP 6: Reviewing your investment goals as you grow your priorities tend to change and so will your investment plan or strategy.
WHAT ARE THE TOP MICRO INVESTING APPS IN 2021?
To start Micro investing all you need do is to start by simply downloading the app and you don’t have to worry about choosing the right one as I will be providing you with tem(10) top Micro investing app and their reviews. Below is the list of top ten micro investing app you can choose from;
Acorns was launched in 2012 and serves as the best Micro investing app for young adults and minors, that wants to start small. Acorn rounds up every amount to the nearest dollar and help invest the difference. It runs a zero minimum account and gives $10 bonus on your first deposit.
Robinhood was founded in 2013. They offer a $0 trading fee and monthly maintenance fee. Signing up with Robinhood Micro investing app is free also. You will agree with me that the name befits the app. And they also offer a 0.3% on all unvested cash and allow their user to trade cryptocurrency on the app.
Looking for a good app to learn investing as a beginner, Stash will attend to your need. After sign up the app asks you questions relating to your financial state and goals in order to help you determine your financial risk level. Stash allow low as $5 for user to start investing which is perfect for a beginner.
Also referred to as OG Robo-Advisor. They have no minimum investment and a very low maintenance fee and offer goal based investments like stash and help coordinate tax on all accounts. Betterment Micro investing app is perfect for retirement plans.
M1 finance is a hybrid Micro investing app and offers you a bit of everything. It runs a $0 monthly maintenance fee and commission or trading fees. Aside that it offer you a 35% loan of your account balance i.e you can borrow up to 35% of your equity and it provides you with a 30% bonus when you sign up with $1000. M1 finance is known as the best millennial Micro investing app.
Jp Morgan is an excellent Micro investing app that gives you the best trading experience by putting you in charge. Giving you a several stocks to choose from with a $0 commission on every trade. Helping you build a good portfolio.
Sofi invest is an automated no fee trade investing app, with no commission fee and allows you sign up with as little as $5, granting free stock ranging between $5 to $1000.
Public.com is also a no commission fee Micro investing app like the rest I have listed above and it also gives $10 free stock when you sign-up. Making investing like a social network where other investors can share their ideas more like a community full of investors. It is good for young investors because it gives them the opportunity to learn from other investors.
Greenlight micro investing app made with the interest of minors in mind. The app is known for teaching the ABC of investing and works perfectly if guardians or parent are fully involved in the process as it requires a bank account and their approval is needed for every trade made in such investment account. Greenlight app allows its users to invest as little as $1 and own a fraction of shares.
Wealthsimple is also a robo-advisor, providing investment advice and a never ending access from a financial adviser at no cost unlike other apps that comes with additional cost. Wealthsimple Micro investing app gives you the chance to invest according to your values with some if their current value investment options like Halal investing and socially responsible investing.
Micro investing is not a fast way to earn but a means to help build the habit of investing, making investing for people who feel like they don’t have what it takes to invest probably because of their financial state or people who are scared of losing their money to the stock market easy to approach.
I have only give you a short review on the top 10 Micro investing app or platform known to the public and will advise you to research more on them before making your choice and avoid procrastination.
FREQUENTLY ASKED QUESTIONS (FAQs)
Yes you can choose how much you wish to invest, although som apps require a minimum amount and with time you can decide to increase your investment.
Most investors turn to Micro investing apps because it is easy to use and doesn’t require you breaking your bank to invest unlike the traditional investment that requires a minimum of $500, micro investing app accept as low as $5 with some going even lower to sign up.
Automatic investment plan (AIP) is known as an investment program that enables investors to deposit funds to an investment account regularly.
Some micro investing app has provided the feature that allows cryptocurrency trading. Research more to know if your choice of investing app permits it.
There are four Micro investing strategies. They include:
Value Investing, Growth Investing, Momentum Investing and Dollar-Cost Averaging.