Breaking down Everything You Need to Know about Micro Investing and Determining Whether or Not Millennials Should Be Looking into It
Investing can seem like a frightening thing to some people - especially to those who don’t know what it is or how to go about it. In this case, many of those people are millennials. They are classified as the generation born between 1981 and 1996. This generation didn’t fall into the investing trend like previous generations, which left them a bit less educated in that realm, which, in turn, is the reason they might not be aware of whether or not they should be looking into investing on any spectrum. Let’s get to breaking down just what investing is on a micro level.
What Is Micro Investing?
To put it simply, micro investing is the method of investing your money in small amounts. It seems easy, right? The good part about this kind of investing is that it actually is that simple. In most cases, you can invest through mobile apps, which is something that almost every millennial has access to.
Most of these apps are used in a similar way. They ask you to link your credit or debit accounts and round up your expenses to transfer that extra change to your investment account. For example, say you’re going out to lunch with some friends, you may spend $8.50 on lunch by charging your credit or debit card. This app will track that spending and round it up to $9.00. That extra $0.50 will then be transferred to your investment account where it will accumulate over time. Once you reach a set amount with your round-ups, you will be able to invest in stocks and other (potentially larger) investments.
How Can You Get Started?
Millennials are usually living “in the now,” which means they are not worried about future things like having a retirement fund. The goal of these small investments is to get you started on saving money. A huge benefit of this kind of investing is that you don’t need much money to get started. You can start with $5 or $15, the choice is yours. It’s crucial to remember that these kinds of investments won’t make you rich - well, there is a small chance that they will.
Finding an app that suits you and your investment goals is the first step to getting started. Do your research! Reading different online reviews like those from DollarSprout can help you make your decision.
What Are the Expectations or Outcomes You Should Prepare For
This is the tricky part. You can never be certain when it comes to the return on your investments. At the same time, this is also the glory of micro investing. Keep in mind that you’re investing small amounts here, so you aren’t really losing much. With micro investments, you can’t expect to make large returns. It won’t make you rich, but chances are that you will probably be able to save a few hundred dollars every year, maybe establish an emergency fund with this money, and more.
Another thing that you should be mindful of is that when you learn how to invest on a micro level, it can prepare you for the larger investment world. You will be able to learn the ropes, and if you like it, dive deeper with other investment strategies.
Is It Right for Millennials?
It’s likely that the small investment industry will grow and evolve over time, which may be appealing to millennials. Investing, on a small or micro level, is suitable for people of all ages, and it’s never too late to get started. Millennials want to see returns right away, but if they go in with the mindset that those returns may not be as large as they want from the beginning and that they will have the potential to grow them in the future, they might be more inclined to try it out.
Investing is something that everyone should try, and doing it on a micro level is the perfect start for millennials. It’s a great way to start saving because you will be putting in (or investing) money that you likely won’t miss or even notice that you’re setting aside. It’s never too late to establish your financial goals and plan for your future - even with small investments.