At times when persons consider the thought of investing, there may be a bit of fear as well as the concern that in order to get started will need a large lump sum of money. As such, several persons have already been doing micro-investing and the process of such, without even realising that they have. Let’s go back to sometime when you were much younger.
When many persons were growing up, there was the process of collecting a horde of spare coins and placing them into a jar. This would happen for quite a time until we think we’ve had enough or a large enough amount and place them into rolls and head to the bank to deposit. Guess What? – This is the primary principle of micro-investing.
Micro-Investing is the process of investing small amounts of your money on a regular basis.
This small consistent action can lead to a sizeable build up over time and even make way to participate in various finacial markets. As we can conclude, the process of putting aside those small amounts didn’t have a major impact on our lifestyles and the recurrence on a regular basis meant that we got accustomed to the process as well. In other words we created a habit, while still living life and even enjoying it somewhat.
Use The Available Technology/Apps
In today’s time, and the wider use of digital currency and transactions, micro-investing can be a bit more seemless, even easier to do.
There are now several widely available apps that make it automated and seemless. What is also recommended is that persons start with an initial nominal amount say for example $20 transferred to an account every Friday Evening for say 6 months.
This is of course just an example of how to get started. Even though there may not be a specific dollar value to get going, as each person is individualistic, the idea is to just get started, and with an amount that is comfortable.
Along with this in mind, some of the micro-investing apps can assist with the algorithmic-based recommendations. The AI generate support will ask you a few questions on your information, goals, your tolerance for risk and even current financial circumstances. These put together, can aid in an informed and possibly a guided decision and pathway.
Get In The Act
With many of the various apps designed for this purpose, you can easily set them up that they allow you to round up all of your regular purchases to the nearest dollar. It is the extra funds from these transactions that can then be directed into your investment account.
Of course when the account mets your designated threshold the securities of choice can be attained with the total funds collected.
Again this is micro-investing in action. Some of the options may even provide for the low minimums for some investments or even into fractional shares. Therefore as a micro-investor your can still have a relatively wide range of securities available to you.
Consider A Financial Buffer
Taking in the process now where the threshold say for 3-months or even 4-months is looking a bit more sizeable in accummulation, it is at this point that one can consider working towards building an One-Month buffer.
This One-month buffer can be the start of your emergency fund or even act as a buffer should something happen to your primary stream of income. Be mindful that it started on the micro-investing process, and the habit can still continue as the foundation grows.
Start Working Here
Okay so let’s get started – Here are a few steps that we can take to get going:
- Make the decision to get started
- Set the specific date and the frequency (weekly/monthly) – Recurring Small Deposits
- Link Your Bank Account or Investment Account – away from your regular savings account
- Calculate the amount which you will get started on saving/investing in the journey
- Will you use the app to automatically round up and invest?
- Identify – What Are You Going To Invest In? Is It, Mutual Funds? Shares?
- Work towards your Financial Buffer – whether its a month, 3 months or even 6 months
- If you have trusted friends/colleagues get them to check on your progress – Helps With Your Consistency
- Do a Monthly Check-In to see your progress – No Pressure!!! – but only as an Indicator
Depending on the app that you use, your fund transfers may have to reach a certain threshold before they’re invested, but this level is usually quite low. This journey of micro-investing is really an easy step and tends to be a painless way to get going on your wealth building, and working towards your bigger goals.
Think of it like – how a small axe can cut down a large tree. Small steps – Micro… towards the bigger goal… Investing…
