One of the reasons people put off investing is that they think they need a lot of money to begin. Micro-investing addresses this by allowing people to start small and gradually grow their investments.
Keep reading to find out what micro-investing means and how it can help you as a newbie or would-be investor.
What is micro-investing?
In general, micro-investing refers to the practice of investing affordable amounts of money into different assets. These include managed funds and stocks.
The main idea behind micro-investing is that even small investments can add up over time. It allows people to start investing even if they have a limited budget.
This is especially helpful for beginners since certain investment vehicles require a large initial capital. They might be too expensive for the average person.
Micro-investing platforms, on the other hand, allow you to invest with P1,000 or even less.
How can you get started with micro-investing?
Investing is something you need to prepare for even if you’re starting with a small amount. Here’s how to begin:
1. Make sure you’re ready to invest
There are a few basic steps to follow before you start investing. These steps include paying your debts off, saving up for emergencies, understanding your risk profile, and setting your investing goals.
It’s ideal to be in good financial health and to have the right investing mindset when you’re starting out. You’ll have better chances of managing risks and maximizing potential earnings if you’re well-prepared.
2. Look into micro-investing platforms
List down the investment platforms that will allow you to start small. Here are a few questions to ask when studying your options:
- Is it legitimate?
Check if the platform or company is licensed by the relevant regulatory bodies before making any transaction.
- What are the investment choices?
Find out if your chosen platform offers investment options that suit you. These choices should align with your risk profile and goals.
- Are there any fees?
When you’re investing small amounts, your potential earnings are also likely limited, especially at the start. Remember to check for any fees to know if they’re reasonable and to be sure that they wouldn’t eat into your profits.
A good investment platform should also offer the help and information you need to make sound decisions.
3. Set aside an amount for regular investing
After creating an account with a micro-investing platform, the next thing to do is to budget for investments. Regular and consistent investing will give you higher chances of reaching your goals.
It can be helpful to set reminders on when to add money to your investments. Some platforms may even allow you to automate your periodic contributions.
Keep in mind that micro-investing might not be a 1-step solution to reaching all your goals. However, it can still serve as an important aspect of your wealth-building strategy.
When you want to grow your money, investing small amounts is often better than not investing at all.
