What Is Micro-Investing?

Micro-investing is the practice of investing small amounts of money—often automatically and regularly—into diversified portfolios, typically made up of ETFs (exchange-traded funds). It’s a way to grow your investments over time, even if you’re starting with spare change.

Popular platforms in Australia include:

• Raiz – invests your daily round-ups and recurring deposits

• Spaceship – allows lump sum or automatic contributions into high-growth tech-focused portfolios

• CommSec Pocket – lets you invest in themed ETFs starting from $50

• Sharesies – offers fractional investing across ASX, NZX, and US stocks

How Does It Work?

Most micro-investing apps link to your bank account. You can:

• Round up daily purchases (e.g. spend $4.60, invest $0.40)

• Set recurring contributions (e.g. $10 per week)

• Make one-off lump sum investments whenever you choose

The platform then automatically allocates your money into a pre-designed investment portfolio based on your selected risk profile (e.g. conservative, balanced, growth).

Why It’s Great for Young Investors

1. Low Minimum Investment

Traditional brokerage accounts can require hundreds or thousands of dollars to get started. Micro-investing platforms slash that to as little as $5, making investing accessible for students and young workers.

2. Automated and Passive

You don’t need to know anything about stocks, ETFs, or market timing. The platforms do the heavy lifting for you—selecting, rebalancing, and managing your portfolio.

3. Build Investing Habits

Perhaps the biggest benefit is behavioural. Micro-investing helps build the habit of putting money aside regularly—no matter how small the amount. This consistency is far more important than trying to time the market.

4. Learn by Doing

Many young people hesitate to start investing because they feel intimidated. Micro-investing offers a safe, low-risk environment to learn by observing your portfolio in real-time, without risking large sums.

Real-Life Example: The Power of Compounding

Let’s say you start at age 22, contributing just $20 per week into a micro-investing app, with an average annual return of 7%.

• After 10 years: ~$15,000

• After 20 years: ~$50,000

• After 40 years: over $200,000

That’s the magic of compound returns—your money earns returns, and those returns earn returns over time.

Even if you can only afford $10 a week now, the important thing is getting started. You can always increase your contributions as your income grows.

What Are the Downsides?

While micro-investing is a fantastic starting point, it’s not perfect.

1. Flat Fees Can Eat Into Small Balances

Many platforms charge flat monthly fees (e.g. $3.50/month on Raiz), which can represent a high percentage cost when your balance is small. A $3.50 fee on a $300 balance is equivalent to a 14% annual fee.

2. Limited Customisation

Unlike a traditional brokerage account, you usually can’t pick individual stocks or ETFs. Your money goes into set portfolios, which may not suit everyone.

3. Not a Substitute for Emergency Savings

Micro-investing apps invest your money in the stock market—not a savings account. Your balance can go up or down depending on market conditions, so it’s not where you should park short-term cash like your rent or travel fund.

How to Get Started

1. Choose a Platform: Compare fees, minimum deposits, and portfolio options.

2. Link Your Bank Account: Set up round-ups or scheduled deposits.

3. Select a Portfolio: Pick one based on your risk tolerance and time horizon.

4. Track Progress: Watch your investments grow—but avoid checking too often!

5. Increase Contributions Over Time: As your income grows, boost your deposits for greater impact.

Final Thoughts

Micro-investing isn’t about getting rich quickly—it’s about building smart habits early and giving your money the time it needs to grow. Whether you’re investing the spare change from your morning coffee or $100 from your first paycheck, what matters most is starting now.

Because in the world of investing, consistency beats perfection—and the best time to start is always today.