Everything You Need To Know About Micro-Investing and Why You Should Invest Now

A scene from The Wolf of Wall Street. Margot Robbie and Leonardo DeCaprio.

Raiz Invest, FirstStep, and Spaceship Voyager are three popular Australian micro-investing apps that are easy to use and allow you to create a diversified portfolio in minutes.

Explore the what, why and how of micro-investing and start building your financial portfolio today for security in the future.

Did watching ‘The Wolf of Wall Street’ or ‘The Big Short’ leave you more confused than interested with stock market jargon like IPO and Blue Chip being casually thrown around?

One of the biggest barriers for millennials when it comes to investing is getting started. Knowing how and what to invest can be difficult.

Micro-investing is a great way to ease yourself into investing,  as you don’t need a lot of money to start.

Jackson Pollocks Blue Poles has provided a compound annual growth rate of 18.26% over the last 40 years.
Purchased by the Australian Government in 1974 Jackson Pollocks controversial Blue Poles is worth AU $1.7 billion, providing a 18.26% compound annual growth rate over the last 40 years.

What is micro-investing?

Micro-investing involves investing money in small increments to purchase fractions of shares. These shares are diversified, so small amounts of your investment will be invested in up to 200 different companies. This way you are ‘not putting all your eggs in one basket’ so to speak.

It is relatively new in Australia. Raiz Invest was launched in 2016.

Micro-investing apps can round up your purchases to the nearest dollar. For example, buying a $4.50 coffee will be rounded up to $5 and the 50 cents would be invested. By making small and irregular investments from everyday transactions your investment portfolio will accumulate gradually over time.

In addition you can make extra deposits or simply deposit one lump sum.

You can manage your entire portfolio from your phone anywhere, any time. Raiz has a blog packed with the latest investing info, including snapshots of the markets, expert insights, and how to manage money. It is a brilliant, easy way to learn about investment as well as managing your money.

Investors receive the blog posts regularly,

Plus there are bonuses on some of the apps. Raiz for example offers Raiz Rewards.

Raiz Rewards offers special prices on a huge range of products aimed at millennials, from supermarket brands to fashion, insurance, Air B&B, apple, Australia Post and a host of other brands including beauty products. Raiz even directly invest bonus cash into your portfolio if you buy from their chosen brands.

At Raiz Invest you also receive cash bonuses for introducing friends.

Raiz Invest, FirstStep, and Spaceship Voyager and are micro-investing apps that are aimed at Australians aged 18 to 35.

It’s time to get on the bandwagon.

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Building wealth is a marathon, not a sprint. Discipline is the key ingredient.

Do Your Research

Before deciding on any investment product, consider the risks involved, make sure you do your research and always thoroughly read product disclosure statements (however long and boring they may be).

What are the fees?

Raiz Invest– there are no fees on $0 balances. They charge $2.50 per month for accounts with a balance under $10,000 and 0.275% per year (charged monthly, computed daily), for accounts with a balance of $10,000 and over.

FirstStep– If you elect to link your online bank account, you will pay 0.275% on your investment balance subject to a minimum of $1.25 per month.

Spaceship Voyager– Fee-free on your first $5,000. They charge 0.10% pa on the Spaceship Universe Portfolio when you invest over $5,000.

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Compound interest is the 8th wonder of the world.

What is the minimum investment?

Raiz Invest– $5

FirstStep– $1

Spaceship Voyager– No minimum investment

What are the investment options?

Raiz Invest constructs and optimises 7 diversified portfolios that go by the names of: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive and Emerald.  The newest portfolio is the Custom Portfolio.

Different portfolios will suit different people with different investment goals.  For example, an aggressive portfolio may suit someone who wants high returns in the long term but is prepared to accept high risks. The Emerald Portfolio includes Bitcoin as part of the offering and is also an ethical investing option.

The newly released Custom Portfolio enables you to be able to build your own personalised portfolio choosing the target weightings of up to 14 ETF’s and Bitcoin. You can even choose your own name for it. This is definitely for the more confident micro investor, but still a great way to learn more.

FirstStep is an investment account that gives you access to a range of ‘Investment Options’. Each represents a different mix of investments and each feels and is different. FirstStep’s range of Investment Options allows you to choose what sort of investment portfolio you will have.

The Defensive Investment Portfolio is built for the laid-back investor. The Balanced Investment Portfolio is built for the middle of the road warrior and The Growth Investment Portfolio is built for the long term adventurer.

You can then elect to add themes to your core investment with choices of: Technology, Ethical, Health and Asia.  

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Someone’s sitting in the shade today because someone planted a tree a long time ago.- Warren Buffett.

Spaceship Voyager offers three investment options.

Spaceship Universe Portfolio invests in a range of ‘world-changing companies we believe meet our “Where the World is Going” criteria, including: Spotify, Microsoft, Square, Apple, and Tesla.’ So the companies of tomorrow.

Spaceship Origin Portfolio invests in ‘some of the world’s largest companies, including: Apple, Johnson & Johnson, Berkshire Hathaway, Alphabet, and Amazon.’

Spaceship Earth Portfolio invests in a range of ‘companies that have a positive impact on people and the planet, including: Atlassian, Shopify, First Solar, Starbucks, and Nvidia.’

Raiz Invest, FirstStep, Spaceship Voyager and are available from the Apple App and Google Play stores. 

Risks of micro-investing

All investments come with some degree of financial risk.

When you micro-invest you should consider that you could incur losses or get better returns elsewhere.

Benefits of micro-investing

Micro-investing is convenient and easy, plus you don’t need much money to get started. 

Investments are relatively low risk (never no risk) and your money can be withdrawn at any time.

There are low, or no fees if you invest under a certain amount and you have the ability to choose between multiple investment options.

The different options come with many bonuses including shopping rewards, money management information, and some like Raiz Invest give back. Raiz offset their carbon footprint, as well as donating to various children’s charities.

Click here for more info on how to save in your 20s. Happy investing!

Sarah Oughtred

Sarah is a practicing artist with an interest in health and fitness. When she is not talking about why everyone should start meditating, she is Salsa dancing, traveling or drawing. Sarah's passions include dark chocolate and running and she has recently started taking cold showers (almost) exclusively. Sarah started her own pet portraiture business in 2020 and hasn’t stopped patting stranger's dogs since.

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