Ivan Heigan
For many first-time investors, especially those with a limited income, building wealth can seem so out of reach. Many believe it takes a lot of money to start investing, making it something only wealthy people can do. Micro-investing tears down the barriers that come with traditional investing and helps more and more people grow their money.
Micro investing is an investment strategy where one invests a small amount of money, into stocks, funds, or other financial instruments. You can buy a fraction of a whole share of the company’s stock instead of necessarily needing to buy a whole share. This is what is known as fractional investing. This gives you ownership in pieces of generally valuable investments for relatively small sums of money. By investing small amounts over time, your money can grow alongside the market without needing a large sum to begin.
For people with lower incomes or those just starting, micro-investing offers a simple way to build wealth. It helps create the habit of investing regularly, even if the amounts are small. Over time, these little, regular savings can grow impressively due to a process known as compounding, whereby money starts earning returns on returns, that are reinvested to further earn more. This helps one to view savings and investment as a single thing for better growth instead of having the money lie idle in the saving account.
Technology has made micro-investing easier and more accessible. Today, numerous mobile apps and online platforms allow users to invest spare change or set aside small amounts automatically. These tools make the process seamless and integrate investing into daily life. Many of these platforms also offer simple, clear education about how investing works, helping people learn while they grow their money.
Micro-investing shows you do not need to be wealthy to start building a fortune. One can get on track with those small, constant steps. Beginner investors might take this to develop confidence in the financial markets and experience and build up higher financial goals. Even though the amounts could be small seeming at first, they add up over time into something very significant.
The world of investing is becoming democratized as more and more people are micro-investing. Fractional investing puts the power of participation into markets that once seemed out of reach. This makes investing fairer and more inclusive, allowing anyone to take control of their financial future. Micro-investing proves that creation of wealth is not for the rich but for anyone who is willing to start small and dream big.
*Ivan Heigan is a commissioned financial adviser at Old Mutual Namibia
