Micro-investing apps can definitely help you save — don’t be scared of the monthly fee.
I’ve been using Raiz/Acorns for years. Other people use Spaceship and many other types of micro-investing apps.
These apps round up your spending to the nearest dollar and then invest that money in your account for you (usually when you pass some sort of threshhold like $5).
On a weekly basis, I usually get around $5–7 taken from my daily expenses account and sent to my Raiz account. It’s such a small amount that I don’t even realise it gets taken out.
The Fees Aren’t That Bad
Raiz, and other micro-investing apps generally have a fee of $2.50 per month. Before you quit reading and just say that’s insane and you’d never use one of these apps, think about this.
$2.50 of $25 is a lot. If you managed to invest $25 a month into Raiz and you got hit with a $2.50 fee — that’s quite a lot. That’s 10%. If you invest less it will be more than 10% and vice versa.
Don’t let this put you off.
Imagine if you didn’t use Raiz, weren’t saving any extra $$$ per month, and then you buy a coffee for $5. Then you’re at a $5 loss.
If you use a micro-investing app just to get started, and it’s helping you save $10–20 per month. Even with a monthly fee of $2.50 — you’re still better off than not having one. Using the roundup investing, you don’t actively have to deposit any money, you just let it run in the background for you. It’s also free to withdraw your money.
At the end of a year, let’s assume you get $5 invested per week though Raiz because of your spending, that gives you $260. And removing the $2.50 per month fee ($30 for the year), that leaves you with a decent profit of $230 — all without doing anything.
My main point here is don’t let a tiny fee of $2.50 stop you from investing and building wealth. Even if you don’t buy 1 coffee for that entire month, that will cover 2 months of Raiz or microinvesting apps.
Of course, there are better options for investing rather than these micro-investing apps if you can manage to save a decent amount of money per month, but that’s for another post.