Thanks to micro-investment opportunities and the best micro-investment apps around, you don’t have to be a millionaire to invest your money. Now, there are fantastic money making apps like Acorns that make investing a small amount possible.
With as little as $1, you can watch your money grow, cash it out and save it towards a common goal with friends and family onboard or reinvest it.
Read Also: 6 Simple Ways to Save Over $8,000 This Year
What is Micro-Investment?
Micro-investing is the act of regularly putting small amounts of money into investment apps. This is as opposed to traditional investing, where you usually set aside more significant amounts of money for investment in a more erratic schedule.
Usually, until your savings reach a significant enough number to justify the cost and effort involved in choosing stocks or other investments.
Micro-investment means you can start investing with minimal amounts. Because not everyone is a millionaire, we do not always have hundreds of thousands of dollars to invest. And this is where micro-investment comes in.
Micro investing allows anyone with just a few bucks to become an investor. However, it does not mean that you will make a million only by investing $5 at a time. Instead, it helps you to start your investment journey to make it as easy and stress-free as possible.
Some of the best micro-investment apps allow you to put in $1 per week towards your investment account. Minimal amounts imply that you don’t need to have a lot of money to start.
The best part is that it can help not to risk your entire savings. This is in case your investment doesn’t turn out as high as you hoped.
Risk and Return
Since all kinds of investment, including micro-investment, carries risk, investing less money does not strike out risks. There remains a chance for risks since you are working with actual money.
Therefore, if you do not want your investment to go to waste, you need to apply the same logic you use on a more significant investment scale.
In any automated investment, i.e., one where a bot trades on your behalf, know that no form of artificial intelligence is going to override common sense!
Remember this quote from economist Paul Samuelson:
Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.
Because we now have some of the best micro-investment apps, it is becoming easier to be a micro-investor. With your smartphone and $5, you can start investing.
Here are 6 of the best micro-investment apps for beginners with low cash.
The Betterment app is one of the best micro-investment apps around. It comes with an option for no minimum investment. With two relatively new premium services on the ground, only its original Betterment Digital offering is still without a minimum.
Like other apps of its kind, Betterment is a robot-advisor that aids the diversification and automatic rebalancing of users’ portfolios.
Depending on your risk tolerance level and savings goals, the app aids users in choosing investments from up to 12 class of assets. After establishing an investment portfolio, the app rebalances automatically whenever dividends, withdrawals, or contributions indicate a need.
Even though there is no minimum for the traditional Betterment Digital offering, a 0.25% annual fee applies to assets under management. This is a relatively cheap deal in the world of investing.
Plus for an annual fee of 0.40%, users can sign up for Betterment Premium. This helps to gain access to a team of financial advisors through unlimited phone call access.
Also, Betterment uses a goal-based savings program to understand better and help its users. It establishes this during the sign-up process, which asks for age and annual income to start.
Then goes on to offer suggested goals using that information as a premise. Such purposes typically include saving enough to take care of three to six months of living expenses in case of emergency strikes, saving toward retirement, etc.
Users also can create personally tailored goals or choose the ways that they want their money invested.
Open an account here.
Acorns was founded by the father-and-son team Jeff and Walter Cruttenden, and according to a 2015 article by Business Insider, it generated over $23 million in just eight months of starting.
It is one of the best micro-investment apps that invests the amounts you usually would not use. For example, the change after buying a couple of drinks. That is, it automatically invests spare change when you make purchases with your credit or debit card.
When you link up your credit or debit card to your Acorns app; each time you use that card to make a purchase, the app rounds your purchase up to the next dollar before investing your change into a diversified portfolio of index funds. The portfolio of index funds is carefully selected by Harry Markowitz, a Nobel prize-winning economist.
Forbes hailed the Acorns app as “effortless,” and PayPal proved it great for use investing $30 million in it. It billing for accounts under $5, 000 is $1 per month while accounts above $5, 000 are charged at 0.25% per annum.
Robinhood is one of the laudable micro-investing apps on the market. It boasts of more than a million users who have spent over $25 billion in investment transactions through the platform.
The app was created and launched in 2014 by two Stanford graduates who saw a need for low-cost, mobile stock trading.
The Robinhood app allows users to trade stocks without charging any fee. It makes its profit on money users deposit in their Robinhood brokerage account. It also profits when users borrow money to trade with, and by moving orders through specific platforms.
The app also requires no minimum investment, and this makes it highly accessible and easy to join.
Only recently, the platform started a premium subscription service called Robinhood Gold. This premium service allows premium subscribers to make off-hours trades, trade on margin (basically, access a line of credit in some situations), and make same-day deposits to their bank accounts after sales of stock.
Although the app makes it exceedingly easy to trade stocks at the push of a button, it now offers little in the way of research or tools. By itself, the app only provides real-time market data without extensive analysis while its official blog, Under the Hood, has some interesting posts on updates related to the Robinhood.
Since the app does not support incoming customer account transfers (also known as ACATs), investors already using a more traditional brokerage firm will have to liquefy their investments before they can reinvest through the Robinhood app.
Also, even though there is a good selection of stocks and ETFs to choose from, its users are currently not allowed to trade in bonds, mutual funds, futures, or options.
Open an account with Robinhood now!
The mission of the Clink app is explicitly stated in its slogan: Save one dollar a day.
The app is tied to your bank account, and you can decide to either fix an amount to be transferred to and invested by Clink per day (starting at $1) or fix a percentage of your expenses to be transferred to your Clink account every time you make a purchase.
Another nice extra feature about Clink is that you can create a Group Savings. With the group savings, you can join your friends and family to save towards a common goal.
You can either invest the money yourself or set the Clink app to work with a fixed amount automatically. This amount is transferred to your Clink account instantly. This feature makes it one of the smooth top use and best micro-investment apps around.
According to the app’s “about” section, their Exchange Traded The Vanguard Group backs funds. The vanguard group is one of the largest investment companies worldwide.
Clink, like other investment options, has a $1 monthly fee. It applies the same to accounts that reach over $5, 000 and so charges 0.25% yearly instead.
Get clink on Android and Apple phones now.
Motif is a unique type of online brokerage app that offers bundles of stocks (called “motifs”) that follow specific themes. Each motif contains up to 30 carefully weighted stocks, all with something connecting them to the theme.
For instance, one of the highest performing motifs over the last year is the “Battling Cancer” motif. This contains not just primarily stocks of biotech companies, but also the shares of pharmaceutical, medical devices, and medical diagnostics companies.
Other motif offerings include “Frack Attack,” “Emerging Markets Consumer,” and “Caffeine Fix.”
There are no account minimums, which means Motif does fall into the micro-investing category. However, users need to reach a $300 balance before they can invest in a motif.
This is higher than most of the micro-investing apps on the market. The trade-off is that users of Motif get a very feature-rich app experience, including tools available online through the Motif website.
Motif is especially great for users who wish to invest according to their social and political leanings. This is because the motif idea allows thematic investing. Buying or selling of each motif costs $9.95, with individual stock or ETF trades going for $4.95.
And a relatively new service, Motif Blue, offers automatic rebalancing and repurchasing, allowing users to automate their investments even more.
You can subscribe to Motif on their secured website.
Stash allows you to start investing with a minimum of $5. Your investment goes into a list of options that are available from 30 investment themes. Investment options currently include hot topics to put your money like Robots Rising and Equality Works.
Although the app doesn’t have a huge learning curve, what I like about Stash is that it doesn’t mind teaching you as you go along.
For the first three months, you can use the app for free. Afterward, it charges a $1 per month fee. Like with Acorns and many other best micro-investment apps on this list, it becomes percentage-based once your account reaches upwards of $5, 000.
Navigating the world of investment becomes a lot easier when you use these best micro-investment apps. The best part is that you do not need to be overly rich to start investing.
The apps in this post will help you invest and earn more. Check them out now!