Some people think that investing is expensive and costs a lot of money.
They think you need a big round number, let's say, hypothetically, $1,000 or $2,000, before they can even think about investing it.
And then because they're spending it all at once, they get analysis paralysis and second guess themselves and their decisions.
This is fair enough: if you think you've only got one shot, how can you decide when to take it?
But staying on the sidelines and never jumping in may not be the best choice either.
Luckily, there's another option.
Instead of investing a huge chunk of money all at once, you could instead follow an investment strategy that invests small amounts over time.
These micro-investments could still add up to a big amount of money, and they could contribute to your long-term goals, though returns are never guaranteed.
How do you start micro-investing?
Micro-investing is an investment strategy that can help you invest in the stock market in small amounts over time.
You can start micro-investing in five steps.
- Decide what to invest in
- Pick an amount to invest, and whether you want to invest it regularly
- Consider round ups and Boosts
- Find an app or broker that has the features you need
- Understand the risks, including the potential for loss
At Spaceship we make it super easy with our Spaceship micro-investing app.
1. Decide what to invest in
Professional investors spend most of their time choosing what to invest in.
Micro-investing into ETFs or managed funds means you can leverage their research for your own gain.
For example, at Spaceship, our in-house Spaceship Voyager Investment Team researches the long-term trends we think have growth potential, and the companies that we think fulfil our 'Where the World is Going' criteria therein, to include in our Spaceship Universe and Spaceship Earth managed funds.
Rules-based portfolios, such as the Spaceship Origin Portfolio or Vanguard MSCI Index, instead follow rules such as 'include the biggest stocks on the stock market', or 'include the biggest stocks in a particular industry or country'.
You can also do your own research.
2. Pick an amount to regularly invest (Here's what Spaceship Voyager investors do)
If you want to become a regular investor, you have to invest regularly.
At Spaceship our investments have long-term time horizons, which means we recommend customers plan to hold them for at least 3 to 7 years, depending on the portfolio you choose. Because the value of investments can go down as well as up, micro-investing is generally not suitable for short-term savings goals.
And it doesn't have to be big bucks – because the point is that it adds up.
3. Boost your micro-investments
Another way to become a micro-investor is to use tech to boost your investments.
Micro-investing platforms, including the Spaceship app, can offer features to boost your investment depending on your behaviour.
For example…
There are Spaceship Boosts you can set up that invest an amount of your choosing every time it rains; each time you catch an Uber; or whenever you buy a coffee. You can even choose to round up your purchase to the nearest dollar and invest the spare change.
These can be useful tools if you're not yet ready to set up a weekly plan, but still want to become a regular investor – and Boosts and round ups can still add up quickly.
4. Find an app or broker with the micro-investing features you need
Look for features such as whether there are minimum investment amounts, holding periods, the range of assets on offer, the fee structure, and whether it's a reputable company.
You should be able to easily understand what you're investing in, what the investing fees are, if there are any other monthly fees, and what you should expect as a customer.
5. Remember the risks
Investing involves significant risks that you should consider before starting:
Market risk
The value of your investment can fall, and you may get back less than you invested.
Fees
Small, frequent investments can be impacted by flat fees. Ensure the fee structure doesn't outweigh your potential returns.
Limited choice
You may only have the option of investing in a pre-set portfolio rather than individual stocks.
You should read the Product Disclosure Statement (PDS) and Target Market Determination (TMD) to ensure the product is right for you.
Frequently asked questions
Is micro-investing worth it in Australia?
For beginner investors or those without a large lump sum, micro-investing can be a practical way to start building wealth and develop consistent investing habits.
What's the minimum amount to start investing with Spaceship?
You can get started with as little as $1 with Spaceship Voyager.
Is micro-investing good for long-term wealth building?
It can be, particularly when combined with regular contributions over time. Small amounts invested consistently can compound significantly over a 3–7 year horizon. Here's a look at what can happen when you invest $50 per week.
