Thanks to micro-investment, you don’t have to be a millionaire to invest your money.
Awesome money making apps like Acorns makes it possible for you to invest a small amount starting at as little as $1. From there, you can watch your money grow, cash it out, save it towards a common goal with friends and family or invest it again.
What will I learn?
What is Micro Investment?
Well, it means you can invest with very small amounts.
We’re not all millionaires. We don’t have hundreds of thousands of dollars to invest. That’s where micro-investment comes in.
It lets anyone with just a few bucks to become an investor.
No, you’re not going to make millions of dollars by investing $1 at a time. But, the idea is to get you started. Make it as easy and painless as possible.
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Some of these apps let you put in $1 a week towards your investment account. Minimal amounts means you don’t need a lot of money to start out, and if your investment doesn’t turn out as great as you hoped, you’re (hopefully) not risking your entire savings.
Risk and return
All kinds of investment, including micro-investment, carries risk.
Investing less money doesn’t mean less of a risk: You’re still taking a risk, you’re still working with real money and you still don’t want to see your investment go south. You should apply the same logic to a smaller investment than you would to a larger one.
In any kind of automatic investment (i.e. a bot that makes trades on your behalf), know that no form of AI is going to override common sense!
Keep this quote from economist Paul Samuelson in mind…
“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.” – Paul Samuelson
How to Start Micro Investing
Thanks to a few great apps, it is so easy to become a micro-investor. All you need is your smartphone, a few bucks, and you’re ready to go.
Here are 4 of the best micro investing apps that you can download and start investing your money right away.
Acorns was founded by father-and-son team Jeff and Walter Cruttenden, and according to a 2015 article by Business Insider, it’s raised over $23 million.
Simply, it’s a micro investment app that invests the amounts you would normally forget about, like the change after buying a couple of drinks.
Forbes hailed it as “effortless”, and even PayPal showed faith in Acorns when they backed the company with an investment of $30 million.
Fees for Investing with Acorn
For accounts under $5, 000, they charge $1 per month.
Accounts above $5, 000 are charged at 0.25% per annum.
Where to Get the Acorn App
Stash allows you to start by investing a minimum of $5 into a list of options available from 30 investment themes, which includes currently hot topics to put your money like Robots Rising and Equality Works.
The app doesn’t have a huge learning curve, and what I like about Stash is the fact that it doesn’t mind teaching you as you go along.
Fees for Investing with Stash
The first three months of using Stash are free, after that Stash charges a $1 per month fee.
Like with Acorns and many other options on this list, it becomes percentage-based once your account reaches upwards of $5, 000.
Where to Get the Stash App
The premise of Clink is well-described in the tagline: Save one dollar a day.
It’s tied to your bank account and you can decide to either :
- set a fixed amount to be transferred and invested to Clink per day (starting at $1)
- set a fixed percentage of your spending to be transferred to your Clink account every time you make a purchase.
A nice extra feature about Clink is the fact that you can create a Group Savings where you, your friends and your family can save towards a common goal. You can either invest the money yourself, or you can set the Clink app to work with a fixed amount, which is transferred automatically to your Clink account.
According to their “about” section, their Exchange Traded Funds are backed by The Vanguard Group, one of the largest investment companies worldwide.
Fees for Investing with Clink
Clink shares the $1 monthly fee with many of the investment options, and the same applies to accounts that reach over $5, 000 – they’re charged at a 0.25% yearly instead.
Where to Get the Clink App
If online reviews are anywhere near believable, then Robinhood is your go-to app for trading stock. In fact, they were listed on Google Play’s 2015 ‘Best of’.
Their information is updated in real-time, and you can add certain stocks to your Watch List if you’d like to keep an eye on where they’re going.
While Robinhood makes trading stocks easier, it shouldn’t override common sense. Their app comes with a detailed disclaimer (worth reading beforehand!) that warns you against the fact that there’s no surefire way to know what’s going to come out on the other end – and also cautions the user against blindly rushing into margin trading before understanding exactly why they’re doing so.
Fees for Investing with Clink
One of the cool things about the app is the fact that they charge no commission to handle any of the gritty behind-the-scenes stuff.
Yes, you get to trade stock for free. You pay zero dollars!
Where to Get the Robinhood App
The Bottom Line
If you haven’t yet, download one of these apps and start investing.
Again, you don’t have to put thousands of dollars in. Just start with your extra change here and there. The most important part is to get started.
Sure, as with any investment, there are risks and rewards. You won’t make a lot of money, but you also don’t lose a lot of money. But at the very least, you earn something that is far more valuable than a few dollars you may make from your micro investment – the experience and knowledge required to trade on a bigger scale!