Micro-investing: What it is and how to get started

Micro-investing can be a great way to get started with investing when you don’t have much in savings. We'll help you understand the basics of micro-investing and show you how you can turn spare change into thousands of dollars over time.

Last updated on January 29, 2023, and last reviewed by an expert on January 15, 2022.

Many people think of investing and the stock market as an activity for the wealthy. The old adage “It takes money to make money” reinforces this idea, but you may be pleasantly surprised to know that you can start investing with just a few dollars a week.

Micro-investing involves saving small sums of money — such as spare change — and investing it consistently into the markets through ETFs or fractional shares of stock. Over the long-term, even small amounts of money can turn into tens of thousands of dollars if invested wisely.

Here’s how to get started with micro-investing.

How micro-investing works

In general, micro-investing allows you to invest your savings even when you don’t have much in savings to speak of. Skipping small purchases that have become a habit or rounding up to the nearest dollar when spending can help you get started. Personal finance apps like Acorns and Stash even offer debit cards that will automatically round up your purchases and invest the additional money in ETFs or fractional shares of stock.

Suggested read: 6 best investments for beginners

With stocks of certain well-known companies such as Amazon and Google’s parent company Alphabet each selling for more than $2,500 per share, it can take time to save enough to purchase just one share. Fractional shares allow you to invest before you can afford an entire share.

This approach of consistently investing savings into the stock market over time has proven to be profitable over the long-term. Investing a fixed amount each week or month is known as dollar-cost averaging, which takes the market-timing decision out of the equation. The consistent purchases mean that you’ll be buying more shares when prices are low and fewer shares when prices are high. With dollar-cost averaging, you’ll be buying over time and averaging your purchase prices.

Advantages of micro-investing

Disadvantages of micro-investing

The bottom line

Micro-investing can be a great way to get started with investing when you don’t have much in savings. Consistently contributing small amounts can add up over time when invested properly, but you’ll need to contribute substantially more to secure your future retirement.

Suggested read: 7 best ways to invest while you’re in college


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