Micro-investing is the process of investing small amounts of money regularly. The process of micro-investing involves small and sometimes irregular investments where the individual can set up recurring payments or invest a lump sum as cash becomes available.
Understanding micro-investing
Before there was such a thing as a digital transaction, consumers looking to save their spare change may have used a piggy bank.
As cash becomes obsolete, however, many consider micro-investing to be a viable modern-day alternative.
Micro-investing is a passive solution designed to make investing simple and accessible for beginners. Most can get started with as little as $5 invested into a diversified portfolio.
The process of micro-investing involves small and sometimes irregular investments.
The individual can set up recurring payments or invest a lump sum as cash becomes available.
Some micro-investing platforms will also allow the user to round up a transaction to the nearest dollar and invest the difference.
For instance, the purchase of a coffee for $3.75 would be rounded up to $4 with the remaining 25 cents invested.
With interest rates at historic lows, micro-investing can generate a better return than if the funds were to sit idle in a standard savings account.
The main micro-investing platforms
There are many micro-investing platforms on the market today, with most removing or at least reducing the barriers to traditional investing such as brokerage fees, management fees, and minimum investment amounts.
Some of the most popular micro-investing platforms include:
Acorns

A mobile app that rounds up the spare change from daily purchases and invests the remainder into a diversified portfolio of exchange-traded funds (ETFs), bonds, indexes, and even Bitcoin.
Users can choose a portfolio based on their risk appetite and there is no fee for depositing or withdrawing funds from the platform.
Public.com
A commission-free micro-investing platform for Millennial and Generation Z consumers that incorporates aspects of social media.
Public.com users can own fractional shares in stocks and ETFs, follow popular creators, and discuss strategies with a community of like-minded others.
M1 Finance

A micro-investing platform that also serves as a robo-advisor.
M1 Finance is an automated solution that invests on a user’s behalf and will also rebalance a portfolio based on preconfigured asset allocation targets.
Spaceship Voyager
Another robo-advisor platform that lets the user transfer small amounts into three portfolio options comprised of some of the world’s most innovative and socially responsible companies.
Spaceship Voyager charges a flat monthly fee with no additional charge for a customer holding multiple portfolios.
Robinhood

One of the first micro-investing platforms launched in 2013. The app was designed to be as intuitive as possible with no bells and whistles or confusing terminology.
For the more hands-on micro- investor, Robinhood provides real-time market data and also allows Bitcoin trading.
Micro investing vs. retail investing

Micro-investing is a form of retail investing.
Throughout the 2020s, retail investing has exploded as liquidity became easily available in the markets, thus making millions of people, especially younger people, enter financial markets.
This also gave rise to another form of retail and micro-investing called meme investing.

Meme investing is a phenomenon where thousands or millions of tiny investors come together, creating buzz around a trend, thus propelling these stocks.
The case that got the most attention was the GameStop saga, which saw a group of meme investors play against Wall Street, forcing the liquidation of various hedge funds shorting the stock.
Key takeaways
- Micro-investing is the process of investing small amounts of money regularly.
- Micro-investing can occur via a recurring or lump sum payment. Many platforms also allow customers to round up day-to-day transactions to the nearest dollar and invest the difference automatically.
- Micro-investing platforms include Acorns, Public.com, M1 Finance, Spaceship Voyager, and Robinhood. Most were designed to remove the barriers associated with traditional investing, such as brokerage fees, fund management fees, and minimum investment amounts.
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