What is Micro Investing?

What is Micro Investing?

Welcome to the grown ups piggy bank. Micro Investing is an alternative way to invest in which your spare change could be making you money without you even realizing it.  The best part? Anyone can do it. No matter how much investing experience you have, you could be getting great returns every year on your money.

What Is Micro Investing?

Micro Investing is a new method of investing that is accessible to anybody who has at least $5. Your money is invested through either an app or website, such as Robinhood or Acorns, into a large fund called an exchange traded fund (ETF).  Another of the benefits of micro investing is that you don’t have to pay traditional investment fees.

Why Does It Work So Well?

The reason it works so well is because of economies of scale.  Micro investing companies can purchase shares at lower than market price because they’re buying a high quantity.

How is Your Money Invested?

The goal of micro investing is to allow you to invest small chunks of money in a relatively safe way that also provides decent returns. The way micro investing companies achieve this balance of risk and reward is through diversity. The ETF will have shares in many different companies across different industries, as well as government bonds, corporate bonds, and cash.

Where Do You Find the Money to Invest?

It works like this. You link your credit or debit card with the platform you’re a member of, then for every purchase you make, it will round up to the next dollar, and invest the change. For example, if I buy a coffee for $3.20, $0.80 will be invested at the same time.

Should You Be Micro Investing?

Micro investing is an excellent way to begin investing that isn’t overwhelming or confusing. While you won’t get rich overnight through micro investing, is is certainly a step in the right direction. Having your spare money sitting in a savings account is essentially useless, so why not make your money work for you?

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