If there is anything to take away from the movie The Big Short, it’s that:
- The stock market is both predictable and unpredictable at the same time.
- There is a lot of money you can make through investing.
Why do I bring up the Big Short? Because I think that it’s new, punchy approach to finance may be one of the signs we are seeing young people becoming investors in their own right without any of the traditional baggage associated with investing. Don’t believe me? Consider that while only half of adults 30 and over save more than 5 percent of their income each year, 3 of 5 Millennials are doing so.
What Is Micro Investing?
More Gen Y-ers are figuring out that it is a good idea to start investing and, just like they do with so many other things, they are not letting themselves be constrained by the traditional options available to them – or even newer trends like making investments in startups. Between new electronic options for investing, penny stocks, and other, smaller investment options collectively known as micro investing, Millennials are learning how to get into the stock market. And they’re already starting to take advantage of these new avenues to invest their money and reap returns.
So, how is the generation with the largest student debt and toughest looking future managing to invest so much? The answer involves approaching investment the way you build any good habit – starting small, doing it frequently, and building your way up. That is the essence of micro investing – replacing large startup capital with an “as you go” approach.
Micro investing allows would-be-investors with little starting capital to bypass the roadblocks that usually keep them out of the game – minimum investment levels, trading costs, market research, and really just not having a ton of money. Micro investing allows you to build wealth with only a few dollars at a time.
Investing has always had a high buy-in value, which you would think eliminates the generation that is doing everything they can to save whatever they have – but a handful of apps are changing that, and opening the doors for Millennials to try their hand at creating their own investment portfolios.
Take that extra coffee money and put it to use! Start by rounding up on your purchases. If it costs $5.50 just save the extra $.50 cents and put it into your savings. Once you have a few dollars saved you can let your money work for you. Start investing by microinvesting to get yourself stared.
Yes, you heard it right, there’s an app for that. Here are a few of the best micro investing apps to take you from rags to riches, one penny at a time.
Betterment
Betterment is the most established business. They have no initial cost and a very good 0.35% annual fee for account balances below $10,000. Betterment focuses more on financial advice that stretches far beyond the stock market.
