Have you started to take an interest in micro-investing of late? Then, apps can be a great way to explore opportunities and make informed decisions. There is no need for you to hire an expert consultant, as you can learn everything on your own.
You might have come across different types of investment myths.
- Investing is for high earners only
- You need to have a lot of spare cash to start
- Become an expert first to begin as an investor
These micro-investing apps are perfect for newbie investors who want to start with zero knowledge. Smart investment strategies can even help you repay loans meant for pensioners.
When you are retired, and a pension is the only source of income, micro investment can help you make additional money. By using them, you can pay back loans, meet urgent cash requirements or even grow the emergency cash reserve.
Micro-investing apps allow users to invest a small amount, i.e. even with £1. Now, all you need is the willingness to get started with this journey, as the rest will be taken care of by these apps.
Your budget can no longer stop you from investing money. This has been made possible because of these apps, which want to overcome the conventional mindset and enter the world of investment.
Complete insight into micro-investing apps and their pros and cons
These apps are known for the convenience they offer. Their simple approach makes them user-friendly and accessible. However, they are also not without setbacks.
Decision-making becomes easy when you are aware of the positive and negative sides simultaneously.
. What are micro-investing apps?
They are digital platforms that you can use to invest a small amount of money. You can even diversify the investment portfolio regardless of the amount you invest.
The extraordinary features of these apps are:
- They pay attention to incremental investing
- Rounding up investments is possible
- Recurring contributions can be automated
- Get access to a user-friendly dashboard
The main purpose is to encourage people to start investing. A small contribution does not seem tough to manage. Rather, it can help you invest consistently, which works wonders in helping your money grow.
. How do micro-investing apps work?
You invest a small amount of cash, and it compounds to grow over time. This is how micro-investments work. However, you will be able to do that by starting to work with these apps.
Set up account: Sign up and go through basic identity checks, and tell about your goals.
Funding pattern: Choose how you are going to fund your account, i.e. the payment mode.
Allocate portfolio: This allocation is crucial as it lets the money be distributed between various portfolios.
Manage: Keep track of the investment performances with the help of these apps to rebalance whenever needed.
. What are the advantages of micro-investing apps?
These are the strongest reasons that have contributed to the popularity of these apps.
1. Entry made easy
No initial larger deposits will be required. This has made these apps accessible to all types of investors. Students, part-time workers and even low-income earners can use these apps without any hesitation.
2. Demands consistency
This is not something related to money and can be built as a habit. Since contributing a small amount does not seem harmful or unachievable, it is most likely that you will continue to invest. Regular investing lets you overcome the volatility of the market.
3. Interfaces are user-friendly
These apps have been designed in such a manner that the steps to access them are easy to understand. Navigating the investment process has been made simple so that users are not reluctant to use the platform again and again.
4. Contribute automatically
You will be using a digital platform. Thus, no manual interventions are required, thereby allowing you to contribute money automatically. This way, you can become a disciplined saver and investor. You do not even have to put in significant effort for this.
5. Diversification is possible
Diversifying a portfolio with a small amount of money might seem impossible. This is how traditional investing has been projected. Micro-investing apps have solved this problem by letting you access built-in diversification portfolios.
6. Educational value
You can use these apps as your educational tool. They include different types of online guides, blogs, articles, etc., to educate their users about investments. They can be your go-to option to study different types of portfolios and how they can work in your favour.
7. Complete flexibility
You can get full liberty to pause contributions whenever you feel the need. These apps allow you to make necessary changes to adjust the risk extent. Therefore, even though you contribute a smaller amount, these features can turn your decision into a blessing. These apps can be an effective tool for someone who is dealing with fluctuating income.
. What could be the disadvantages of micro-investing apps?
These apps can also have some imperfections, which are nothing but the cons which you must note as well.
1. Growth is restricted
Since you stick to small contributions, you cannot expect to see exponential growth. The returns might not be satisfactory as they can still be inadequate according to the inflation rate. Keep growing your contributions from time to time to overcome this setback.
2. Fees might be high
The idea of getting started with a small contribution seems attractive. However, you should worry about the fees which might eat away at your returns. Therefore, calculate and check how much you can benefit from these micro-investments.
3. Limited opportunities
Naturally, when your resources are limited, you cannot expect to explore a wide variety of opportunities. You might not get a lot of choices in individual stocks and other trading features, etc. You can get access to curated portfolios, but you cannot get a scope to study the entire market.
4. Inapt for short-term goals
If you think that you can make the most out of these micro-investing apps for short-term objectives, you are wrong. You cannot ignore the volatility of the market, and it can result in a loss. If you withdraw money during downturns, this can be fatal to you. Above all, you might not get access to funds when you may need them.
The bottom line
If you are sceptical about deciding when and how you must start investing, these apps can help you decide. Do not underestimate the power of small investments, as they can outweigh the necessity of external funds like unsecured loans in the UK.
When investments are managed smartly, you can reserve sufficient cash for emergencies. Then, you will not have to rely on external financing to sail through an unexpected cash need. The best part is that you do not have to hold a lot of spare cash to qualify for investing.
These apps let you rule out the setbacks of traditional investing. Use your phone to embrace this opportunity.
Emma Anderson is a financial advisor at Quickloanslender who always believes in researching hard to know her clients’ financial problems. She takes the time to understand their financial wants and needs to write the blogs on them as the solutions. In her long 14 years of experience, she has written plenty of blogs on the financial and business sectors of the UK.
Emma Anderson has been recognised for her work in financial planning and her blogs are regularly published in the website of Quickloanslender. As far as her educational qualification is concerned, she has done Masters in Accounting and Finance, and done PG Diploma in Creative Writing.
