Here’s Exactly How to Start Investing — Even If You’re Completely Broke

New American 100 dollar bills scattered randomly with the portrait of Benjamin Franklin uppermost, seen through a magnifying glass.
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In the 21st century, we like things small.

Our headphones, computers and dogs are all shrinking. Teacup pigs are surging in popularity (at least in meme form). File compression is such a well-known part of everyday life that an entire sitcom is based on the concept.

It’s no surprise we like our investments small, too.

Why Millennials Love Microinvesting

Investment, as a term, seems way too big for most of us. It’s too much to learn, too much responsibility, too much risk — just too much.

Microinvesting, on the other hand, is just plain adorable. Snappable, ‘grammable adorableness.

Like a pig small enough to fit inside a teacup, microinvesting is about investments small enough to fit anyone’s budget.

Yes, even yours.

Even better, this strategy typically comes through an app.

Most importantly, you don’t really have to know anything about the stock market to make this kind of investment.

Our Favorite Microinvesting Apps

Microinvesting apps let you automatically invest small amounts of money into a portfolio they craft for you. You set up a profile that lets the app know the best kinds of things to invest your money in.

Here are some of our favorite microinvesting apps:

Acorns

Acorns makes it easy to invest without missing the money you set aside. It rounds up debit- or credit-card purchases to the nearest dollar and invests your digital change.

Penny Hoarder Dana Sitar shared her Acorns review — she saved $116 in three months, about $35 a month, by connecting one debit card to the app and forgetting about it. At that rate, you’d put away $420 a year. And if you use your credit cards more frequently, your round-ups could amount to much more.

You'll get a $5 bonus for signing up, too.

Stash

Stash lets you start investing with as little as $5 and for just a $1 monthly fee for balances under $5,000. 

Stash curates investments from professional fund managers and investors and lets you choose where to put your money. But it leaves the complicated investment terms out of it. You just choose from a set of simple portfolios reflecting your beliefs, interests and goals.

Bonus: Right now, The Penny Hoarder is teaming up with Stash to fund your first investment — so you’ll get a $5 bonus when you enter the code PENNYH

Wealthfront

Similar to Betterment, Wealthfront is a robo-investment company. It’s an online financial company that uses sophisticated software instead of human stockbrokers to manage your investments.

Both companies use software robots — proprietary programs that act as robo-advisers — to steer your investments and cheaply do things stockbrokers and money managers would charge you high fees to do.

Learn more about both in our comparison of Betterment versus Wealthfront.

Rize

Rize is a pay-what-you-want, 256-bit-encrypted (bank-level security) web app that’ll help get your savings on track. You’ll create a goal and set a deadline.

These could be short-term goals, like saving for a weekend road trip or meeting your monthly student loan payment. You’ll even earn 1.65% interest on your balance. (For some context, that’s 19 times higher than the national average for savings accounts.)

If you have a longer-term goal, have Rize invest the money for you and help you maximize returns. It asks you to contribute at least $2 a month for that service and will take a 0.25% fee of assets invested (comparatively low for investor fees).

MoneyLion

MoneyLion is an all-in-one app for managing your personal finances. Basically, it offers the financial services you’d typically get from three or four different banks or providers, and they’re all bundled into one place.

MoneyLion connects with all of your bank, credit card, student loan and other financial accounts. Based on your income and spending patterns, it offers personalized advice to help you save money, reduce your debt and improve your credit.

Robinhood

The Robinhood app is best known for having no trading fees. You can buy and sell stocks on U.S. exchanges without paying a commission, and you’ll pay no account maintenance fees.

In keeping with its stripped-down approach, Robinhood doesn’t offer investment research or advice on your portfolio.

WiseBanyan

You can start investing with as little as $1 on WiseBanyan, and the app charges no monthly account fees or trade fees.

Fees do kick in once you opt to upgrade to premium services. You can mix and match services to create personalized premium packages. These packages include detailed investment strategies, increased personalization and additional automation services.

Where Your Micro-Money Goes

When you invest through a microinvesting app, your money is typically going into exchange traded funds, or ETFs.

ETFs are treated like other funds in the stock market, but they include investments in several companies.

And they let investors like you own portions of shares in stocks, instead of full shares — which you might not otherwise be able to afford.

Is Microinvesting Worth It?

If you’re even a little math-minded, you might have realized: If you invest a small amount, you can only expect a small return, right?

You probably won’t become a millionaire or retire early from investing your spare change.

Realistically, these apps could help you set aside a few hundred dollars a year. It’s nothing to write Warren Buffett about — but it’s no small feat if you’ve been living paycheck to paycheck, wondering how you can get ahead.

You could have $500 in your emergency fund by the end of the year — before the next thing on your car breaks.

Or you can use microinvesting as a first step into bigger investments.

Or just save for one more year, and you can get yourself a teacup pig!

Whichever you choose, life is about to get a lot more Insta-worthy.

Dana Sitar ([email protected]) is a branded content editor at The Penny Hoarder. Say hi and tell her a good joke on Twitter @danasitar.

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder.

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This article contains general information and explains options you may have, but it is not intended to be investment advice or a personal recommendation. We can't personalize articles for our readers, so your situation may vary from the one discussed here. Please seek a licensed professional for tax advice, legal advice, financial planning advice or investment advice.