When you were younger, you most likely had a piggy bank where you would store all your coins. Now, although it acts as a safe storage place, you know that it doesn’t give you anything in return. That money saved can actually be used elsewhere, such as micro-investments, not only to store your money in but also to potentially return you with even more.
Micro-investing apps are today’s piggy banks, allowing you to store your change and invest at the same time. If you have never heard of micro-investments, we’ll share all that you need to know about it in the sections below:
What Is Micro-Investment?
It is a platform that allows you to save small sums of money. At the same time, the platform uses that money to invest, meaning that it encourages people to spend their money no matter how little knowledge they have about the world of investments.
Are Micro-Investments Popular?
Yes, it is popular, especially with investors, and for many good reasons. The first would be that you wouldn’t have to make a deposit to start the investing process. Traditionally, if you were to invest in anything, you’d have to deposit a certain amount of cash, whether it is a few hundred dollars to even thousands. Micro-investments, however, have broken down that barrier, allowing you to invest with a mere one dollar while some platforms don’t require anything for you to begin.
Another reason it is gaining popularity is that it is incredibly convenient to take part in it. The applications you will use are easy by nature, since the target market is anyone at any level of investment knowledge.
Are There Any Downsides To Micro-Investments?
Similar to all things in life, micro-investments are not exempted from having downsides. The biggest downside is that you can actually get much bigger returns elsewhere. This means that if you’re an investor looking to gain a million dollars within the next year with your $10,000 investment, you’ll have to look elsewhere. In other words, if you’re a seasoned investor, micro-investments might not give you the returns you’re looking for.
Are There Any Fees Relating To Micro-Investments?
As you may know, fees can seriously pull down the returns you might have gained from your investment. Although it does come with costs, how much and how they charge will typically depend on how much you’ve invested so far. For example, for those that charge a flat rate, you might be charged two dollars per month for an investment of less than $5,000. However, once you go above that threshold, you might be charged in a percentage, something along the lines of 0.2%. Generally, the more you invest, the lesser you’ll be charged.
If you’re new to investment and do not have much money, micro-investments are a great way to get started. Not only will you be able to save money with it, but you can also gain extra money. Plus, since you aren’t investing much, you don’t have to worry about losing too much. However, always remember that with any investment you make, there will be risks that may come along the way. Most micro-investment platforms will indicate how much risk you’re putting yourself in and your job is to figure out how much risk you’re willing to take so that you can reach your investment goals.
If you’re interested in micro-investing, get in touch with us today at Zero Effort Cash to see how we can help!