Micro investing is a modern investment strategy that is quickly gaining traction among new investors. Micro investing entails investing small sums of money in financial instruments such as stocks, digital gold, exchange-traded funds (ETFs), and mutual funds. It is frequently used to gradually build up a portfolio on a limited budget.
In this article, we will define micro investing, explain how it works, and show you how to get started.
What exactly is micro investing?
The practice of investing small sums of money in financial markets is known as micro investing. It is a strategy that anyone, regardless of financial situation, can use to begin investing in the stock market. The primary benefit of micro investing is that it allows people to invest without requiring a large initial capital.
Large sums of money are commonly invested in stocks or mutual funds in traditional investing to reap the benefits of long-term investment. Micro investing, on the other hand, allows investors to begin investing with as little as Rs 1. This way, they can gradually build a portfolio that will eventually grow to be substantial.
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What Is the Process of Micro Investing?
Micro investing platforms are intended to make it simple for new investors to begin investing. These platforms provide a variety of investment options such as gold, stocks, and mutual funds. They enable investors to buy fractional shares of these securities, allowing them to invest in small portions of a share. This allows investors to invest with a small amount of money.
Micro investing platforms also include features such as automatic deposits, which allow investors to set up recurring investments, and round-ups, which allow purchases made with a linked debit or credit card to be rounded up to the nearest Rupee and the difference to be invested in securities.
Getting Started with Micro Investing
If you’re interested in micro investing, getting started is easy. Here are the steps you can follow:
1. Choose a micro investing platform: There are several micro investing platforms to choose from, When choosing a platform, consider factors such as the fees, investment options, and ease of use.
2. Sign up for an account: Once you have chosen a platform, sign up for an account. You will need to provide some personal information, such as your name, address, and social security number.
3. Link your bank account: To fund your investments, you will need to link a bank account to your micro investing account. This will allow you to transfer money from your bank account to your micro investing account.
4. Choose your investment strategy: Decide how much you want to invest and which securities you want to invest in. You can invest in a single security or create a diversified portfolio of securities.
5. Set up automatic deposits: Most micro investing platforms allow you to set up automatic deposits. This means that you can schedule regular transfers from your bank account to your micro investing account, so you don’t have to remember to do it manually.
6. Monitor your investments: Keep track of your investments and monitor your portfolio regularly. This will allow you to make adjustments as needed and take advantage of any investment opportunities that may arise.
Micro investing is an excellent way to begin investing in the stock market on a small budget. It provides several benefits, including the ability to begin investing with a small sum of money and to invest in fractional shares of securities. Choose a platform, sign up for an account, link your bank account, choose your investment strategy, set up automatic deposits, and monitor your investments on a regular basis to get started with micro investing. Micro investing, with time and patience, can help you build a portfolio that can grow into a significant amount of wealth.
(By Ronit Harisingani, CEO and Founder of Spare8)