Your spare change is the secret to building wealth.
Imagine if every time you grabbed coffee or ordered takeout, those few extra cents magically started working for you in the stock market. Sound too good to be true? It isn’t.
Welcome to the world of micro-investing, where rounding up your everyday purchases could be the low-effort wealth-building strategy you didn’t know you needed. And no, you don’t need Wall Street smarts to get started just the coins rattling in your pocket and a smartphone app.
Curious if this small change can really make a big difference? Let’s dive into how micro-investing is reshaping the way YOU approach personal finance.
What Is Micro-Investing, and Why Is It Everywhere?
Micro-investing apps, such as Acorns, Stash, and Revolut, are changing the game for personal finance by offering an easy, automated way to invest. These platforms link to your bank account, round up your everyday purchases, and invest the spare change in exchange-traded funds (ETFs) or fractional stocks.
Say you buy a latte for $4.60. That extra $0.40 automatically flows into your portfolio. Over time, those seemingly insignificant amounts can snowball transforming loose change into a mini investment portfolio that grows as you live your life.
Here’s a breakdown of how different micro-investing apps use small contributions and automation to build portfolios, focusing on how they collect, invest, and grow wealth effortlessly.
Here’s how it works:
1. Acorns
Founded: 2012
Ownership: Privately held, co-founded by Walter and Jeff Cruttenden
Regulation: Registered with the SEC and regulated as a financial advisor.
Fees: $3/month for personal accounts, $5/month for family plans
Transaction Round-Ups
When you make a purchase with a connected debit or credit card, the app automatically rounds up the transaction to the nearest dollar. In the case of a $4.60 latte, the app rounds it to $5.00, and the extra $0.40 is set aside for investing.
2. Accumulating Small Investments
These tiny amounts may seem trivial on their own, but with every purchase, the app collects more. Once the rounded-up savings reach a minimum threshold (e.g., $5.00), the money is transferred to your investment account and invested in diversified portfolios like ETFs.
3. Automated and Passive Growth
The key idea is that this happens passively without the user actively needing to contribute large sums or time. Over time, these frequent, small contributions snowball into a larger portfolio, especially if they are reinvested and benefit from market growth and compound interest.
4. How It Adds Up
For example, if you make 50 purchases per month that result in an average round-up of $0.40 each, you’ll save about $20 per month. Over a year, that’s $240 invested. With steady contributions and potential market returns (e.g., 5–7% annually), that small change can grow into a meaningful amount over several years.
2. Stash
Founded: 2015
Ownership: Co-founded by Brandon Krieg and Ed Robinson
Regulation: SEC-registered, member of SIPC for investment protection.
Fees: $3 to $9/month based on selected plans
1. Micro-Investing Mechanism
Instead of automatic round-ups, Stash allows users to set up recurring deposits (as little as $1 per day or week).
It offers fractional shares, meaning you don’t need to buy whole shares of expensive stocks or ETFs — just a piece.
2. Investment Process
Users can customize their portfolios by picking specific stocks or ETFs aligned with their financial goals (e.g., sustainable investments, tech stocks).
Stash also provides thematic portfolios to guide beginners.
3. Automation and Growth
Automated deposits combined with reinvested dividends help portfolios grow gradually over time.
Stash offers a Stock-Back® Rewards program, where small percentages of your purchases (like 0.125%) at specific retailers are given as stock rewards instead of cashback.
3. Revolut
Founded: 2015 (UK)
Ownership: Founded by Nikolay Storonsky and Vlad Yatsenko
Regulation: Licensed as a bank in certain countries; follows national financial regulations.
Fees: Free plan available, premium services charged monthly
1. Micro-Investing Mechanism
Revolut offers round-ups on transactions, like Acorns. For example, if you spend $3.20, the app rounds it up to $4.00, adding $0.80 to your investment balance.
The app also supports cryptocurrency micro-investing, making it a unique offering for users who want exposure to digital assets.
2. Investment Process
Funds are invested in fractional shares of popular stocks and ETFs listed on the New York Stock Exchange and Nasdaq.
Users can choose from a range of assets or let the app automate investments based on selected goals or risk levels.
3. Automation and Growth
Similar to Acorns, Revolut builds portfolios through small contributions over time, making investing painless.
While Revolut has fewer educational resources, it appeals to users who want crypto and traditional investing in one app.
4. Robinhood
Founded: 2013
Ownership: Founded by Vlad Tenev and Baiju Bhatt; publicly traded company
Regulation: SEC-regulated and a FINRA member.
Fees: Free basic account; $5/month for Robinhood Gold, offering advanced tools
1. Micro-Investing Mechanism
Robinhood recently introduced fractional shares. Users can invest with as little as $1, even in stocks like Amazon or Tesla, which trade at much higher prices.
2. Investment Process
Users can manually select stocks, ETFs, options, or cryptocurrencies, but there are no round-ups or automatic savings features like Acorns.
Instead, Robinhood offers the freedom to trade whenever you want, commission-free.
3. Automation and Growth
While Robinhood doesn’t rely heavily on automation, it enables users to set up recurring investments in individual stocks or ETFs.
The platform offers instant access to deposits for quick trades, which appeals to active traders and new investors alike.
5. SoFi Invest
Founded: 2011
Ownership: Publicly traded under SoFi Technologies
Regulation: SEC-regulated; also provides FDIC-insured banking services.
Fees: No commissions, but crypto transactions may incur minor fees.
1. Micro-Investing Mechanism
SoFi Invest offers fractional shares and recurring investments, helping users build portfolios without large deposits.
2. Investment Process
Users can select individual stocks or ETFs or opt for automated investing through SoFi’s robo-advisor.
SoFi also offers crypto trading, appealing to those who want a blend of traditional and digital assets.
3. Automation and Growth
Automated investing portfolios are rebalanced regularly, with no management fees.
SoFi offers perks like free financial planning and bonuses for consistent investing.
6. Public.com
Founded: 2017
Ownership: Privately held; backed by investors like Accel and Greycroft
Regulation: SEC-registered and SIPC member.
Fees: No commission, but premium content and crypto may have associated costs.
1. Micro-Investing Mechanism
Public.com offers fractional shares with no minimum investment, letting users invest small amounts in stocks and ETFs.
It lacks automatic round-ups but supports recurring investments for easy portfolio building.
2. Investment Process
A unique feature is its social element, where users can follow other investors, see what they’re buying, and join discussions about strategies.
3. Automation and Growth
Public focuses on building a community-driven investing experience, making it popular with younger investors.
With the no-commission model, users can invest freely without worrying about fees cutting into returns.
7. Webull
Founded: 2017
Ownership: Owned by Fumi Technology, a Chinese company
Regulation: SEC-regulated and a FINRA member.
Fees: No commissions, but there are fees for margin trading and certain withdrawals.
1. Micro-Investing Mechanism
Webull offers fractional shares but focuses more on active trading than passive, automated investing.
It does not support round-ups, but users can deposit small amounts and trade stocks, ETFs, or cryptocurrencies.
2. Investment Process
Webull’s advanced trading tools appeal to more experienced investors, but beginners can benefit from the fractional investing feature.
3. Automation and Growth
Webull lacks automation options like round-ups, but users can set recurring transfers for steady portfolio growth.
It provides real-time market data and advanced analytics to help users make informed decisions.
8. M1 Finance
Founded: 2015
Ownership: Privately owned by Brian Barnes
Regulation: Registered with the SEC and offers FDIC-insured banking features.
Fees: Free for standard accounts; $125/year for M1 Plus, which unlocks extra features.
1. Micro-Investing Mechanism
M1 Finance offers fractional shares and allows users to invest in “pies” custom portfolios that contain multiple stocks or ETFs.
Users allocate percentages to different assets in their pie, and the app automatically invests contributions according to the set allocations.
2. Investment Process
Deposits are automated, and funds are distributed based on the proportions within your pie.
M1 Finance supports recurring transfers from linked bank accounts to build your portfolio over time.
3. Automation and Growth
The platform rebalances your portfolio automatically, ensuring investments stay aligned with your strategy.
Users can upgrade to M1 Plus for more features like early direct deposits and a higher savings yield.
Why the Appeal?
For many younger investors especially Millennials and Gen Z convenience is king. You don’t need thousands to get started, and the process fits into your existing lifestyle. Micro-investing is marketed as low-barrier, low-risk, and perfect for those skeptical of traditional investing routes.
Can Spare Change Really Build Wealth?
The million-dollar question, is micro-investing powerful enough to create meaningful wealth over time?
The short answer, Yes, but with caveats.
While micro-investing might not make you a millionaire overnight, it leverages the principle of compound interest. Even small contributions grow exponentially when invested over a long period. Imagine contributing just $1.50 a day for 10 years at an average market return of 7% annually you’d end up with close to $8,000 by the end of that decade.
However, it’s important to manage your expectations. Small contributions will not replace a fully-fledged retirement plan, but they are an excellent way to dip your toes into the investing pool. Think of micro-investing as a gateway habit the more you see your account grow, the more likely you are to increase your investments down the road.
The Psychology Behind Micro-Investing, Why You’ll Love It
There’s a reason why this type of investing appeals to YOU,
It makes wealth-building feel effortless.
Micro-investing taps into a psychological principle known as “pain-free saving”. When your investments are tied to your daily spending, the small contributions don’t feel like a sacrifice.
In traditional investing, parting with large sums of money feels daunting. But with micro-investing, every coffee, grocery run, or Uber ride makes you feel like you’re taking tiny steps toward financial success. This “set it and forget it” approach brings a sense of empowerment to those who might feel overwhelmed by the idea of managing money.
And let’s be honest, doesn’t it feel good to know that while you’re binge-watching Netflix or enjoying that brunch, your spare change is out there working for you?
Are There Any Downsides to Micro-Investing?
While micro-investing has its charm, it’s not without limitations. Here are a few things to watch out for:
1. Small Gains Can Lead to Overconfidence.
Seeing small wins might tempt YOU to rely solely on micro-investing, overlooking larger wealth-building strategies. It’s crucial to balance micro-investing with traditional savings and retirement plans.
2. Fees Can Eat Away Profits.
Some apps charge a monthly or annual fee, which can erode your returns especially if you’re only investing small amounts. If you’re paying $3/month on a portfolio of $100, that’s a hefty 3% fee just to keep your money invested.
3. Limited Customization.
Many micro-investing platforms focus on pre-selected ETFs or portfolios, which can feel restrictive for those who want more control over their investments.
Is Micro-Investing Right for YOU?
Micro-investing isn’t a one-size-fits-all solution, but it’s a great starting point if YOU’RE new to investing or struggle with saving. It takes away the intimidation factor, helping YOU build confidence and form good financial habits. Over time, that momentum might inspire YOU to explore more advanced investment options like stocks, real estate, or crypto.
However, micro-investing works best as one piece of a larger financial strategy. Think of it as a snowball effect — small efforts now can spark a bigger financial journey in the future.
So, does micro-investing work? Absolutely. It may not make YOU a millionaire overnight, but it’s a step in the right direction one latte at a time. If YOU find value in watching your pennies grow, then start today. Your future self will thank you.
With a few taps, your spare change can become the foundation of something much bigger.
The only question is, are YOU ready to start?
Remember: This article is for educational purposes only. Always do YOUR own research or consult a licensed financial advisor to create a plan that fits YOUR goals.
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