Traditionally, getting a foothold in the market meant having a broker and buying a lot of stocks. Now, an emerging group of apps and platforms are making investing more accessible and a lot easier to understand. And the best part? You don’t need to have a lot of money to do it.
The old idea about investing was ‘only invest what you can afford to lose’. Micro investing turns this on its head, putting all the joys of compound interest in reach through incremental investments that you might not even notice.
Lack of disposable cash or lack of investment knowledge should no longer stop you from getting involved. Whether you aim to make some money or to get a better understanding of how investing works, these apps could have the answer. Or, if the idea of investing is making you a little nervous, there are apps that can help you to make small, automatic savings deposits.
If you’re still unsure about taking the investment route but like the idea of automating your savings and gaining some interest in the process, there are a number of ways to squirrel away this cash. Some banks now offer this feature, like ING does with ‘everyday round up’.
If your bank isn’t offering this service yet, there are new apps like Carrott who are happy to step in. Carrott lets you convert spare change into money that can chip away at your mortgage or FEE-HELP debt by harnessing the power of compound interest.
Micro-investment makes investing really, really simple. You can even get started with your smartphone. Raiz was called Acorns until it rebranded for the Australian market. It’s free to join and to deposit or withdraw money. It costs $1.25 per month if your account has a balance of under $5,000, at which point you pay a fee based on a percentage of your account value.
When you start using the app, you have the option to choose how you want to make your investments, with five options including aggressive and more ‘safe’ options, as well as environmentally-minded green choices.
Once you connect the app to your credit or debit card, it will ‘round up’ your EFTPOS transactions to the nearest dollar, and automatically deduct this ‘extra’ money. This is then invested in exchange-traded funds (ETFs). It’s important to remember that Raiz isn’t an ETF or investment fund. It’s the platform that allows access.
Read more on using Raiz from Choice.com.au
Built along the lines of the Robinhood app (which is apparently on the way to Australia), Stake offers Australians access to the American stock exchange.
The Stake app gives users access to over 3000 listed companies, including many brands that you’ll be very familiar with, like Netflix, Amazon, PayPal and Facebook. The app is free to download and free to trade but takes a fee when you transfer money into the account to use for trading.
US-based Australian journalist Amber Jamieson’s newsletter Better Have My Money breaks down the stock market and is an excellent read for beginners.
Before you start, remember that saving and investing through apps still carries a risk. No market is one hundred percent secure, and they can all fail. Likewise, as these platforms are looking to diversify their offerings, like offering a super fund, it’s important to consider whether they are a good bet for the longer term. Go in with your eyes open, and we’re betting that you’ll learn a lot about your money.
Want a simple way to keep on top of your finances? It’s easier with Moneytree.
Giving you the skinny on spending, saving, and everything in between. We're sharing our favourite tips, trips, tools, and insights, to help you get more out of your money.
Get more from your money, while you keep enjoying yourself.
