You are 15 years old.
Your school just announced a picnic.
You go to buy some stuff from the 500 rupees your father gave you.
You got chips, chocolates and all of that you wanted.
The bill amounted to Rs. 450 and the shopkeeper returned you a 50 rupee note.
What to do to with that?
You can either return it to your father or keep it with you for future use or maybe put it in your piggy bank.
One more thing you can do is invest that money.
I know, i know what you’re thinking.
Invest? 50 rupees? Yes, you can.
In the past few years, investment options in India have expanded rapidly, and so have the economic opportunity for millennials. Youngsters are gradually realising the importance of saving and investing.
Although it is true that "it takes money to make money," you might be surprised to find that you can start investing with as little as a few rupees every week.
Let us understand it through micro investing.
What is Micro-Investing?
Micro-investing refers to small investments individuals can make even if they don't have large amounts of funds initially. It is saving aside small amounts of money on a constant basis and investing them in the stock markets via different funds or stock shares.
When you micro invest, you invest a little amount of money on a monthly basis. It involves buying more shares when prices fall or are low, and less shares when prices rise, because investors would be buying them on a regular basis.
It is a great opportunity for very young people on the block to get into a habit of saving and investing till they reach the age where they are capable to investing considerably large amounts.
Pros of Micro-Investing
- You won't have to worry about risky investments because your funds won't be invested in just one stock or company. Your funds are instantly invested in a wide portfolio that may be significantly more reliable and secure.
- Even the most unskilled investors can benefit from mutual fund investing since the investment is simple and easy. It is a great way for newbies unskilled investors to get into the practice of investing.
- Although you may start investing as little as ₹30 in micro-investing, most applications allow you to invest as much as you like. So, if you have any extra income or are able to save a considerable amount of money, you may put it into your investment account.
However, you cannot expect your retirement corpus to grow out of the micro amounts you invest. For that, you need to invest a lot more money.
Cons of Micro-Investing
- If you don't contribute to your fund on a regular basis, it will grow slowly. It might take years to save 50 rupees here and there, and even then, the total amount will be less than you expect.
- Micro-investing does not permit you to withdraw your money right away since shares must be sold. Withdrawing funds from an account can take anything from a few days to four or five days.
Micro-investing might be a viable approach to get started with investing if you don't have much money to invest and are seeking some solid options. If correctly invested, having a practice of continuously investing little sums over time may add up over time. It's a great tool for new investors because it allows them to start investing with a small amount of money.