Investing can sometimes feel out of reach, especially if you think you need a lot of money to get started. But that’s not always the case.

Micro-investing makes it possible to start small – sometimes with just a few dollars. For some, it’s a simple way to build an investing habit. For others, it’s a first step before moving on to larger investments.

Is it the right choice for you? It depends. This guide breaks down how micro-investing works, its potential benefits and risks, and how it compares to traditional investing. That way, you can decide what feels right for you.

What is micro-investing?

Micro-investing is a way to start investing with small amounts of money. Instead of saving up a large sum, you can invest as little as $5 or less at a time.

Most micro-investing platforms invest your money into options which track diversified funds, such as exchange-traded funds (ETFs) or managed funds . This helps reduce the risk of relying on a single investment to perform well.

Micro-investing can help people build an investing habit without needing a large upfront commitment. Whether it suits you depends on your financial situation, goals, and approach to investing.

How does micro-investing differ from traditional shares investing?

Both micro-investing and traditional shares investing involve putting money into investments, but they work in different ways. Here’s how they compare:

Micro-investing versus traditional shares investing

Feature	Micro-investing	Traditional shares investing
Investment amount	Start with as little as $5 or less	Usually requires at least $500 to start investing
How you invest	Invest in managed funds which track index funds or ETFs	Buy individual shares or ETFs
Automation	Often automated with regular deposits or round-ups and can autoinvest as well	Requires manual buying and selling; some platforms (like Pearler!) provide an automated option
Diversification	Usually invested in diversified managed funds	Depends on what you choose to buy
Control	Limited choice of investment options	Full control over which shares or funds to buy
Time commitment	Set and forget with minimal management	Requires research and ongoing monitoring, unless you opt for a passive investing strategy

Here are some other key differences to note:

Fees and costs

Micro-investing platforms often charge fees for transactions and maintaining the account – but these are generally low. Traditional investing may involve brokerage fees that vary based on the platform and trade size. Even small fees can add up over time, so checking how each option structures costs is important (for either shares or micro investing).

Investment strategy

Micro-investing typically follows a passive investing approach. This is where money is invested in a managed fund that tracks a market index (like the Australian Securities Exchange ) or investment strategy. Traditional shares investing offers more flexibility, allowing you to choose individual stocks or exchange-traded funds.

Access to funds

Some micro-investing platforms may have withdrawal restrictions, meaning you might need to wait a few days to access your money. With a traditional brokerage account, you can usually sell your investments anytime, but it may take a couple of business days for the money to reach your account.

Both approaches have their place, and some investors use a mix of both. As mentioned, the right approach depends on your goals and how hands-on you want to be. Read our comparison of investing in shares versus micro to help you choose.

What are the potential benefits of micro-investing?

Micro-investing provides a simple and accessible entry point for those who want to grow their savings over time. Here are some potential benefits to consider.

Start investing with as little as $5

As we’ve said, traditional investing often requires hundreds or thousands of dollars upfront. A micro investing platform can allow you to start with as little as $5 , making it easier to begin. Keep in mind that small investments may take longer to grow, and fees can have a bigger impact on returns. For this reason, it's always crucial to research them before you commit.

Invest spare change automatically

Some micro-investing apps (again, like Pearler!) offer round-up features. This means if you spend $5.50 on a coffee, the app rounds it up to $6 and invests the extra 50 cents. Over time, these small contributions can add up. However, round-ups alone may not be enough to build significant wealth, so some investors choose to make additional contributions.

Automate your investments

Micro-investing platforms let you set up automatic deposits , so you can invest without having to remember to do it manually. Automation helps build a consistent investing habit. But it’s important to monitor your investment account and ensure you’re comfortable with where your money is going. It's also good to remember that some shares investing platforms also provide automation tools.

Diversification from Day One

Most micro-investing platforms invest in managed funds which track funds, like an ETF, managed fund or mutual fund. These funds spread your money across multiple investments, potentially reducing the risk of relying on a single company’s performance. However, diversification doesn’t eliminate risk – market downturns can still affect overall returns.

No need for market research

Unlike traditional investing, where you might analyse individual stocks, micro-investing typically involves choosing a fund or strategy and letting the platform handle the rest. This can be helpful for investors who don’t want to research companies or monitor market trends.

Lower barriers to entry

Many investing platforms require users to place their own investments, which can feel overwhelming for beginners. Micro-investing apps simplify the process, making it more approachable for those new to investing. That said, investing – no matter how simple – still carries risks, and returns are never guaranteed.

Flexibility to invest at your own pace

You can invest small amounts whenever you want, whether that’s a few dollars a week or occasional spare change. There’s no pressure to commit large sums. However, as we mentioned earlier, investing small amounts may result in slower growth, especially if fees reduce overall returns.

No lock-in periods

Most micro-investing platforms let you withdraw your money when you need it. But some platforms may have processing times before funds become available. Market conditions can also affect the value of your investments, meaning you could get back less than you put in. Keep in mind that there may be tax implications when withdrawing your money.

Again, though, like any form of investing, micro-investing has its risks and returns aren’t guaranteed.

What are the risks of micro-investing?

Micro-investing helps as an easy first step into investing, but – to stress the point – it's not risk-free. Understanding the risks can help you decide whether it fits your financial goals. Here are a few, including some we’ve already shared:

• Market fluctuations can reduce returns. Investments go up and down in value. If the market falls, your micro-investments can lose value, and you may get back less than you put in.
• Fees can impact small investments. Micro-investing platforms often charge account or transaction fees. While these fees may seem small, they can eat into returns, especially when investing small amounts, so look out for fee change announcements.
• Growth may be slow. Since micro-investing involves small amounts, it may take longer to see significant growth. Some investors may choose to increase their contributions over time.
• You have less control over specific investments. Most micro-investing platforms invest in diversified options rather than individual stocks. This reduces decision-making but also limits control over where your money goes.
• Withdrawing funds may take time. Most platforms let you access your money, but withdrawals are not instant. Some may take a few business days to process.

Can investors transition from micro-investing to shares investing when they're ready?

Over time, some micro investors may want more control over their investments as their confidence grows. When you’re ready to transition from micro-investing to shares investing , here’s how you might do it:

• Increasing investment amounts over time: Micro-investing often starts with small contributions, but investors can choose to increase their deposits over time. Regularly adding larger amounts can help bridge the gap between micro-investing and direct shares investing.
• Opening a brokerage account: To invest in individual shares or ETFs, investors need a brokerage account. Unlike micro-investing apps, brokerage accounts allow users to buy and sell specific stocks, ETFs, and other assets. Some platforms, like Pearler, give you access to both micro-investing and shares investing brokerage accounts.
• Choosing between diversified micro options and direct shares: Some investors prefer to stick with options that track diversified funds, while others transition to selecting individual shares or exchange-traded funds. Both options have risks and benefits.
• Balancing both approaches: It’s possible to continue micro-investing while also buying shares through a brokerage account. You might use a micro-investing platform for automated contributions and a brokerage account for hands-on investing.

Moving from micro-investing to shares investing is a personal choice. As we’ve mentioned, the right approach depends on financial objectives, risk tolerance, and how involved you want to be as an investor.

Does Pearler offer micro-investing?

Yes, Pearler offers micro-investing through Pearler Micro , a micro-investing platform designed for Australians who want a simple way to start investing . Here are some of the key features:

• Invest with as little as $5 – No need for large upfront deposits to get started.
• Choose from 10 diversified managed funds – These funds track popular ETFs, spreading investments across multiple companies and industries.
• Automate your investments – Sit back and put your investing on autopilot. Set up recurring deposits or use round-ups from everyday spending to invest spare change automatically.
• No confusing jargon – Designed to make investing accessible, whether you're new to investing or want a simple way to grow wealth.
• Low-cost structure – Pearler Micro has transparent, low fees with no hidden charges.

Pearler Micro allows you to invest in a way that suits you – manually, automatically, or through round-ups.

Is micro-investing right for you?

Like all investment strategies, micro-investing isn’t for everyone. Some people use micro-investing as a stepping stone before investing in individual shares, while others stick with it long-term.

If you’re considering micro-investing, think about how it fits within your broader financial plan. Every investment carries risks, and growth takes time. Whether you start small or take a more direct approach, the key is finding an investment strategy that works for you. Conduct research or seek advice from a certified financial adviser to figure out which way to go.

Happy investing!