micro-investing image showing saplings in various stages of growth

Micro-investing allows you to start investing with small sums of money, including cents. The aim is to remove barriers to traditional investment approaches such as minimum balances.

There are a variety of methods to start micro-investing that can help you save a little more in the years to come.

How to Start Micro-Investing?

There are a variety of ways to start micro-investing, but one of the simplest ways is to turn to financial apps like Acorns or Stash.

Start with a small amount of money in one of these apps and select the investment options that most align with your goals and beliefs. You could contribute as little as $5 to start buying fractional shares of a stock.

How Do People Micro-Invest?

Young investors turn to micro-investing through apps like Robinhood and Stash. The apps give a lot of room for young investors to explore their interest in finance and markets.

Micro-investing involves investing a small amount of money that can compound over time. You could start investing with as little as cents on the dollar. While this investment method may not open the entire market to you, there are many assets that can be explored at a low cost.

Micro-investing techniques involve buying fractional shares instead of whole shares, which is why the cost is low. Investing in fractional shares of companies like Microsoft, which have low volatility, can lead to building a more stable investment portfolio.

What Are the Benefits of Micro-Investing?

Micro-investing allows anyone to start an investment portfolio early. It is also a simple process when using apps like Stash, which give investors an opportunity to learn about the stock market and saving.

New investors using the apps are introduced to the stock market slowly but efficiently. Many investors can start building their interest in stock picking over time after learning the basics through the apps.

What Are the Downsides of Micro-Investing?

There are low barriers to entry in the market when using investing apps. However, there are fees associated with the apps that could eat into your investment savings.

There is a detriment to using micro-investing in the long run, especially when using the financial apps.

Usually, the apps become costlier as you place more money into your investment account. Limited use of the apps is beneficial because it is meant to be a learning tool. It will be challenging to grow your investments in the long run using micro-investing as your key investment strategy.

Micro-Investing Can Help Novice Investors

The financial apps like Stash provide a solid gateway to learning about markets. Learning about how to invest in stocks and ETFs through these apps gives young savers the confidence they need to approach the stock market in the future.

Young investors are more likely to start investing with confidence after getting a taste for what investing in the stock market is like.

Preparing for the Bigger Investment

While micro-investing is a solid learning strategy without a lot of added risk, it is not a substitute for earnings coming from using a brokerage account on a platform like Merrill Lynch.

Financial firms like Mooney Lyons can help you get set up with your investing future when you are ready to take the next step.

Get advice at Mooney Lyons to help you manage market risk and provide guidance on where to take your portfolio next.

All investing involves risk including loss of principal.  No strategy assures success or protects against loss.  There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio.  Diversification does not protect against market risk.