With Micro Investing apps you don't need thousands of dollars to start investing in shares. You can get started with just $5! Micro-investing is the cheaper and easier option compared to traditional share brokers.
In Australia we have two excellent micro investing apps. Like everything I write about, I've invested in these apps with my own money.
Spaceship Voyager – My Top Pick
If you're just starting out investing, then you should definitely take a look at Spaceship. You can get started with as little as $5 and then top up your account with minimum investments of $5.
Why I like Spaceship Voyager
No Fees under $5k
This is Spaceships biggest selling point. For balances under $5k you are charged no fees. This means you can grow your investment without having to worry about fees eating into your returns. What's even more incredible is that balances over $5k will only pay a tiny fee of 0.01%.
Spaceship is officially the cheapest way to invest in a portfolio of shares from Australia.
3 Portfolio Options
I use the Spaceship Universe portfolio and it has been one of my top performing investments. There is also an index portfolio made up of 200 of the worlds largest companies, and an Earth portfolio made up of sustainable companies.
I've setup a weekly investment through the Spaceship App. I don't need to worry about manually transferring any money. It just works in the background. The beauty of micro investing is you can invest small amounts at regular intervals. Over time it really adds up!
Raiz is another micro-investing app that I use alongside Spaceship Voyager. It has many of the same features, however it does have a different fee structure and different portfolios.
What I like about Raiz:
When you invest in Raiz your money is split across a portfolio of different ETFs. You don't need to know what an ETF is, Raiz makes the entire process very beginner friendly. You can choose from 1 of 7 different portfolios or build your own custom portfolio. I recommend most people stick to the default portfolios. They have been put together by experts and are well balanced. You can choose from conservative to aggressive portfolios based on your investing goals.
Raiz has a unique feature called Round-ups. You link your spending bank account and the app tracks your purchases. It rounds each purchase up to the nearest dollar and then transfers that tiny amount into your Raiz investment account. So basically the more you spend the more money you'll invest!
Personally I've turned off the round-ups feature. It was great when I was just starting out investing, but now that I've built up my balance and income, I'm investing larger lump sums. Just like on Spaceship you can setup recurring investments.
Raiz offers one portfolio that has an allocation of 5% Bitcoin. If you've wanted a cheap and easy way to invest in Bitcoin, then this is a good option. Because only 5% of the portfolio is made up of Bitcoin, the volatility of crypto will be less noticeable. And you'll still be investing in the tried tested ETFs (Stocks and Bonds).
Micro Investing FAQs
Can you use Spaceship and Raiz together?
This is what I do. (This isn't investment advice). My Raiz portfolio is more conservative and has exposure to lots of Australian and Asian stocks. Which is great because I live in Australia! And my Spaceship Portfolio has exposure to many U.S based tech companies. Which is great, because many of the companies that I invest in through Spaceship are companies I love and use daily. Spaceship is more of a growth portfolio and Raiz is my steady nest egg.
How much money do you need to start Micro Investing
You can start with just $5 on both Spaceship and Raiz.
Why Micro Investing over Traditional Investing?
It really depends on your life stage, but for many people Micro-investing will turn out to be a smarter choice. Here are some of the pros:
- No need to time the market – if you're investing through a platform like Selfwealth the minimum trade size is $500. For many people this isn't something they can do on a regular basis. So they end up investing sporadically. With micro-investing you're investing small amounts all the time. Sometimes when the market is up. Sometimes when it is down. This is dollar cost averaging and it's one of the smartest ways to invest!
- Set and Forget – The best way to invest is to set it up and leave it alone. People lose money when they fiddle around and try and gain an edge. Most retail investors will lose money trying to pick stocks. Even the majority of fund managers have underperformed the major indexes. Your safest bet is to invest in a diverse portfolio (Like Spaceship or Raiz) and just let it do it's thing.
- Automated – You can setup automatic investments. Even just $5 a week will start to add up. And you can easily increase this amount as your financial situation improves.
Can you trust Raiz and Spaceship?
I trust these companies more than I would trust a boutique investment fund, simply because of their size. Spaceship is used by over 175,000 Australians. Both Raiz and Spaceship are transparent with what you're investing in. I haven't come across any reports of people having issues with Withdrawals or with customer service. I've been using these platforms for over 3 years.
How is Spaceship Voyager so cheap?
How can Spaceship charge no fees on your first $5k? Spaceship is using their fee structure as their major selling point to attract new customers. They also offer a Super product which they make much more money from (Super has pretty high fees). They are backed by some big Venture Capital which is funding their growth.
If these apps go bust will I lose my money?
No. In order to lose your money there would need to be a fraud on the scale of Bernie Madoff. Your money gets invested in a fund. This is seperate from the Spaceship/Raiz company. If something was to happen to either company, the fund would simply be distributed back to shareholders.
Are these Micro Investing Apps Regulated?
Yes. They are regulated by ASIC and hold a financial service license.
What should I do before investing?
Read the PDS! It will layout the risks of investing in each product. If you're new to investing and shares, then the PDS of each product is a great way to get better informed.