What is micro-investing and how to get started?

hand stacking coins into piles

How much do you need to start investing?

This is perhaps one of the most common questions we are asked. The simple answer is: You only need a few cents. Literally. You don’t need to be saving for years; you can be in the markets before you know it.

You may be asking, how is this possible? You’ve probably heard that finding a broker is the first step to start investing. Well, that’s not entirely true, thanks to micro-investing.

You can get started simply by signing up to an app. It’s such a great way for you to enter the market as your first step.

Micro-investing, otherwise known as loose-change investing, is a way to invest your spare change. So throw out your piggy bank. With technology you can put this loose change in the stock market instead.

Sounds easy, right? It is!

Micro-investing takes your dollars and cents from everyday transactions and combines them with the money from other investors like you. It then uses this money to invest in the stock market.

It’s all in the name: ‘micro’. The idea is you regularly invest very small amounts of money, sometimes literally cents, eventually building up to a portfolio that is more significant in value.

For people who don’t have a lot of money to invest, and don’t know a lot about investing, it is a great way to get some exposure to the stock market.

Read: The best financial adviser is closer to home than you think

You can start with dollars and cents.

When we started our investing journeys, back in the early 2000s, the minimum needed was $500. Saving that amount was challenging, a huge barrier. Then, to make a second investment, we needed to save another minimum $500. This minimum still does apply to many brokers in the Australian market (at the time of writing) but thanks to micro-investing apps, it’s not the only avenue you have to take.

Forget the idea that you need to save large sums of money to kickstart your journey.

You do have enough money to get started.

Micro-investing is set up so that you don’t have to do a lot of thinking. You don’t need to know a lot about the markets to start.

Here’s how. Micro-investing apps round up purchases you have made through your debit card, and invest the remaining spare change. For example, you buy a sandwich for $9.50. The micro-investing app will round it to $10 and take the $0.50 and invest it. Done! You’re in the market!

Over time, as you make more purchases, your balance will slowly build and before you know you’ll have a small nest egg invested in the markets.

Micro-investing apps generally have a number of investment options you can choose, from a conservative strategy to a high-growth strategy. They’re a great way to understand how portfolios are constructed, and for you to dip your toe into the water without having to worry about choosing individual stocks and putting all of your hard-earned savings in right away.

When micro-investing companies take your loose change from everyday transactions, or from small voluntary contributions, they are pooling these funds with all the other investors doing the same thing. They take that pool of money and put it into share-based investments.

You don’t have to choose what specific companies to buy.

Read: New to investing? Key questions to consider

You don’t have to choose what exchange-traded funds (ETFs) to buy (although you can if you want to).

You don’t have to know how much to allocate to bonds or cash or gold.

If you don’t understand any of those terms, that’s fine, because you don’t have to.

Micro-investing apps are designed for you to get enough exposure to the markets without it feeling daunting. Purely by being active on the apps, you will slowly come to understand some of those terms. That’s what’s great about it.

So, you do have enough money to start and you do have enough knowledge. You’ll soon find that you understand more about how the market works purely by investing those small amounts of money.

There are three main ways that you can manage and interact with micro-investing apps.

1. Round-ups
This is the first place to start and one of the most common features of micro-investing apps. It works by you linking your debit cards to the app. Then, for every transaction you make, it will round up to the nearest dollar and invest the difference.

For example, if you were to buy a drink for $4.50, it will round up to $5 and invest the $0.50. It’s that easy. Some apps will accumulate the spare change, until it reaches a minimum amount of say $5, and will then invest that $5.

If you think about how many transactions you make on your card these days, it’s easy to see that over time you can start to build a decent-sized portfolio, without needing to make any significant change to your spending or saving behaviour.

Read: Big four bank admits to charging dead clients

2. Lump sums
Once you’re comfortable with your spare change coming out of your account, and you have a bit of a handle on the apps, you can think about additional contributions. Let’s say you get to the end of the month and you have a spare $50 that you didn’t spend.

A great way to invest this, without needing to make too many decisions, is to make a lump sum deposit into your micro-investing app.

By transferring into the app, it will take your lump sum and invest it into the same share-based investments that your spare change is going into. It’s very simple, and a great way to get added exposure to the stock market. You can continue to do this as often as you like, building up your portfolio faster than if you were to rely on just the round-ups.

3. Recurring deposits
If you like the idea of the round-ups, but want to grow your portfolio faster, then setting up a recurring deposit is a great option. In addition to your round-ups, you can automatically add extra money at a regular frequency.

You might choose to add an extra $5 per week, or $20 a fortnight. Whatever it may be, the apps easily allow you to set this up. It will then automatically withdraw the money from your account at each interval, and invest it into the portfolio you have chosen.

Again, this is a great way to boost your portfolio and get exposure to the stock market, without needing a lot of cash upfront or a lot of knowledge about investing.

As with everything in life, micro-investing has pros and cons. Here are the major points for you to weigh up.


  • no deposit is needed to start
  • no investing knowledge required to get going
  • very convenient
  • provides diversification and broad market exposure
  • can set and forget – removes emotion from buying and selling.


  • you may get better returns elsewhere if you know what you’re doing
  • limited options in what you can invest in
  • fees can be high, depending how you use the apps.

There are three big micro-investing platforms in Australia that you can research. Make sure you do your own research – a simple google search of ‘micro-investing apps Australia’ will show you your options.

We are not recommending any particular platform, just providing you information on what is out there, so we have presented the below in alphabetical order.

  • CommSec Pocket offers investors the ability to invest from as little as $50. Transfer money into the app and you can buy into funds that follow different markets (e.g. Australia, America) or different themes (e.g. tech, sustainability).
  • Raiz rounds up your transactions and invests that spare change in the stock market. Bought a $4.50 coffee? Raiz rounds that purchase up to $5, takes the $0.50 and invests it for you.
  • Spaceship Voyager has no minimum investment amount and no fees until your account is over $5000. It offers investors two choices: tracking the market or a fund managed by professional investors.

Edited extract from Get Started Investing: It’s easier than you think to invest in shares by Alec Renehan and Bryce Leske, published by Allen & Unwin, RRP $32.99 paperback

Have you considered micro-investing? Are you already a micro-investor? Are you happy with the performance of your micro-investment portfolio? Why not share your thoughts in the comments section below?

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Written by YourLifeChoices Writers

YourLifeChoices' team of writers specialise in content that helps Australian over-50s make better decisions about wealth, health, travel and life. It's all in the name. For 22 years, we've been helping older Australians live their best lives.

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