More Australians are investing than ever. And many are doing it in ways that didn’t exist a decade ago.

Micro-investing platforms have opened the door to everyday investors. Meanwhile, buying shares directly remains a go-to for those who want more control. But how do you know which one suits you?

It’s not always clear. Both options let you invest. Both can help you work towards your financial goals. But they work differently. Whether you’ve got $5 or $5,000, understanding the trade-offs matters.

This article breaks down how micro-investing and buying individual shares compare, so you can decide what fits you best.

What is micro-investing?

Micro-investing lets you invest small amounts of money regularly, sometimes just a few dollars at a time.

It’s often done through an app that rounds up your everyday purchases. For example, if you spend $6.50 on coffee, the app rounds it up to $7 and puts 50 cents into your investment.

This approach lowers the barrier to entry for investing. You don’t need hundreds of dollars to start – just $5 can get you in.

With micro-investing, you’re not buying individual shares. Many use managed funds which track assets or track popular indexes , like the Australian Securities Exchange (ASX) 200. Micro-investing can also make it easier to invest small amounts without meeting ETF minimums.

Micro-investing is automated, simple, and designed to build a habit over time. You don’t need to pick stocks or monitor markets.

This investing approach can suit investors looking for an easy, low-commitment way to get started. It’s one option among many and understanding how it works can help you make a clearer choice.

What does it mean to buy individual shares?

Buying shares directly means choosing specific companies and becoming a part-owner. When you buy into companies listed on the ASX , these are called listed shares.

When you invest this way, you’re selecting individual stocks yourself. That could include banks, retailers, or tech companies. You also get direct exposure to the companies you choose. If a company does well, you may benefit. If it doesn’t, you may feel the impact more strongly.

You make the decisions. What to buy, when to buy it, and when to sell.

When you buy shares directly listed on the ASX, this is called CHESS-sponsored investing . This means the shares are legally in your name, not pooled with other investors.

There’s more choice, but it comes with more responsibility. You need to manage your investments and stay informed.

How do the two investing approaches compare?

There’s no one-size-fits-all way to invest. Micro-investing and buying individual shares each have their place in long-term investing – it just depends on what fits you.

Here’s a simple breakdown to help you compare the two.

Accessibility and ease

• Micro investing : Easy to set up. You can invest spare change through an app and automate contributions. While it doesn't need to be, it can offer a “set and forget” approach .
• Individual shares : Takes more time upfront. You’ll need a brokerage account and a basic understanding of how the market works.

Control and customisation

• Micro investing : Less choice, but fewer decisions. You pick from a few managed fund options, often linked to well-known ETFs .
• Individual shares : You’re in charge. Choose the companies, sectors, and how much to invest in each.

Costs and fees

• Micro investing : There is usually a flat fee involved or an ongoing percentage fee . It can be great for low balances, but fees can add up over time.
• Individual shares : You’ll pay transaction costs when buying or selling shares , known as brokerage fees. There are generally no ongoing fees if you hold your investments – unless you invest in exchange-traded funds, which can come with small management fees .

Minimum investments also differ. Micro-investing can start from just a few dollars. Shares usually require at least five hundred dollars per trade.

Risk and volatility

• Micro investing : Often spread across many assets, which can potentially help manage ups and downs. However, as with any investment, risk is always present.
• Individual shares : Risk can be higher if your money’s in just a few stocks, but the potential gains may be higher too.

It comes down to your risk tolerance – how much risk you’re comfortable with.

Learning curve

• Micro investing : Relatively simple. You don’t need to conduct a lot of research or constantly track the market.
• Individual shares : Takes time to learn. You’ll be more involved and make more decisions as you go.

Both paths have their potential strengths. Direct shares investing gives you more control, while micro-investing offers more convenience. The best choice depends on how much you want to invest, how involved you want to be, and what makes you feel confident.

Who might each option suit?

Your choice often comes down to what you want from investing and how hands-on you want to be. Let’s look at a few scenarios.

Scenario A: You’re new to investing

If you’ve never invested before, micro-investing could be a low-pressure place to start. It’s simple, app-based, and lets you invest spare change.

You don’t need much to get going. And you don’t need to keep up with market news or company reports.

Scenario B: You’re curious and keen to learn

Buying shares directly can suit people who want more control and enjoy getting into the details. You might be building a long-term portfolio or looking to grow your confidence step by step.

Scenario C: You’ve got specific financial goals

Your goals matter too. Are you investing for retirement or early Financial Independence? Shares and micro-investing can both support those goals, but in different ways.

What works for you?

Micro-investing might suit smaller, regular contributions. Shares might work for investors who can invest larger amounts and want more say in what they own, to align with specific strategies. You may want to consider seeking investment advice to figure out the right strategy for your goals.

Here are some questions you can ask yourself:

• How hands-on do I want to be?
• Do I have time for and enjoy doing research – or would I rather not?
• Am I after full control or fewer choices?
• Do I want to start with spare change – or make bigger investments from day one?

At the end of the day, it’s about which one fits you better. Consider your lifestyle, mindset, and goals.

Can you do both?

Yes, and many investors do just that.

Micro-investing and shares aren’t mutually exclusive; you can combine the best of both worlds in your investment portfolio.

Micro-investing can help you build consistency with small, regular contributions. It’s a great way to take advantage of dollar-cost averaging . The smaller amounts can add up over time, potentially stabilising the effects of market fluctuations.

Buying shares directly lets you build specific exposure to areas like the Australian shares index, international shares, or sectors you believe in. This approach can give you more autonomy over what you own and how it works towards your goals.

Investing platforms make it easy to manage both strategies. With interactive tools at your fingertips, you can keep track of your investments and build a portfolio that works for you – whether it’s through micro-investing or individual shares.

Invest on your terms

Both micro-investing and buying shares directly are valid paths. Starting small is still progress. Every dollar invested now builds toward your future. Take a moment to reflect on your lifestyle, confidence, and long-term goals to figure out which path might work for you.

Whether you choose micro-investing for its ease or individual shares for the control, the important thing is to get started. With time, your confidence will grow.

So, how can you start investing in a way that feels right for you? The journey is yours to shape – and it all begins with the first step.

We’re here to support you, no matter which path you choose.