A big trend in the financial world today is the concept of micro-investing. If you are unfamiliar with this concept, it allows people to invest their cash into financial markets and receive higher returns compared to a traditional savings account. What makes micro-investing so attractive is it incorporates technology to make it user-friendly and stress-free. A question that commonly arises is whether micro-investing is simply a trend or if you can legitimately build wealth and consider it a viable long-term portfolio investment. We’ve taken a closer look to answer this question.
Micro-Investing Is An Alternative To A Savings Account
Most financial experts agree that micro-investing is a better option than sticking money into a traditional savings account. A savings account at a bank or other financial institution may give you around a 1% annual return, which is hardly enough to build any type of wealth. With micro-investing, you use exchange-traded funds (ETFs) to put your money in and can potentially get double-digit returns. Just remember that with a small investment you will be limited to a small return, but the returns via micro-investing are typically more significant than with a bank savings account.
Who Is Micro-Investing For?
The great thing about micro-investing is anyone can do it and you don’t have to have a large pile of cash laying around to begin. Several apps are available for you to download, and each has unique characteristics so you can find the right one for you. Some of the best ones are Acorns, Stash, Public, and Robinhood. It’s simple to link a bank account to transfer funds quickly and easily with these apps. People who utilize micro-investing apps don’t always have a lot of financial knowledge, may be hesitant to invest in the stock market, don’t have a lot of extra cash, and don’t want to make long-term commitments. This doesn’t mean an experienced investor can’t find viable investment opportunities from a diversification perspective with micro-investing, but the micro-investing community consists mostly of people who fit into the other profiles.
Use Micro-Investing As A Building Block For Long-Term Wealth
The consensus among financial experts is micro-investing is a great alternative to traditional savings accounts, but they won’t make you wealthy directly. However, with the earnings you enjoy through micro-investing, you can apply those funds to other investment vehicles you may not have had the means to even consider before. Some people use the funds earned from micro-investing to boost their emergency savings or to get their feet wet with investing to build a stronger portfolio investment later.
Stock Investing Info looks at many different investment options for investors no matter their age or the financial knowledge they have. Micro-investing offers interesting investment opportunities for anyone to consider. You won’t become wealthy solely with micro-investing, but it can lead you to other investment opportunities in the future. Feel free to contact us to learn more about this strategy and many others to help boost your investment portfolio.