Micro-investing is one of the easiest ways for Australian beginners to start building an investment portfolio. You don’t need to understand the sharemarket, choose individual companies, or save up a large lump sum first. This guide covers everything a beginner needs to know to start.
Before You Start — Three Things to Sort
1. Have a small emergency fund first Before investing anything, ensure you have at least $1,000–$2,000 in an accessible savings account for emergencies. Micro-investing platforms are liquid, but markets can fall — you don’t want to be forced to sell investments at a loss because you needed emergency cash.
2. Pay off high-interest debt If you carry credit card debt at 18–22% interest, paying it off is a guaranteed 18–22% return — better than any investment. Micro-invest only after clearing high-interest debt.
3. Understand you might lose money short-term All investment platforms can fall in value. If you invest $1,000 and markets drop 20%, your portfolio is worth $800. This is normal — the key is not to panic-sell, and to have a time horizon of 3–5+ years.
Step 1 — Choose a Platform
For beginners, the main options are:
Raiz: Best for round-up investing and automation. The $3.50/month fee is worth it once your balance exceeds $3,000–$5,000. Good for beginners who want hands-off investing.
Spaceship: Simple, clean interface. Three portfolio options. $3/month fee. Appeals to younger investors interested in tech-focused or sustainable portfolios.
CommSec Pocket: More control — you choose from 7 ETFs. $50 minimum per investment. Lower fees at higher amounts. Better for those who want to understand what they’re holding.
See Raiz vs Spaceship Australia and Best Micro-Investing Apps Australia for detailed comparisons.
Step 2 — Download the App and Sign Up
All major micro-investing platforms are available on iOS and Android. Sign-up typically requires:
- Your email address and mobile number
- Australian residential address
- Tax File Number (TFN) — required for investment accounts; without it, withholding tax applies at the highest marginal rate
- Bank account or card to link for funding
- ID verification (driver’s licence or passport) — required under AML/KYC regulations
Setup takes 5–15 minutes.
Step 3 — Choose Your Portfolio
Most platforms offer 3–8 portfolio options based on risk tolerance:
| Risk level | Typical asset mix | Expected volatility | Best for |
|---|---|---|---|
| Conservative | 70–90% bonds/cash, 10–30% shares | Low | <3-year horizon; low risk tolerance |
| Moderate | 50% shares, 50% bonds | Medium | 3–7 year horizon |
| Balanced | 65–70% shares, 30–35% bonds | Medium | 5+ year horizon |
| Growth | 80–85% shares, 15–20% bonds | Medium–high | 7+ year horizon |
| Aggressive | 90–100% shares | High | 10+ year horizon; high risk tolerance |
For beginners with a 5–10 year horizon, a balanced or growth portfolio is commonly chosen. Be honest about your ability to stay calm when markets fall.
Step 4 — Set Up Recurring Contributions
Automation is the biggest advantage of micro-investing. Set:
- A weekly or monthly automatic deposit (e.g., $20/week or $100/month)
- Round-ups if your platform supports it (Raiz)
Start with what you can genuinely afford. Even $50/month builds the habit and compounds over time.
Step 5 — Let It Run
The most common mistake beginners make is checking their portfolio every day and panicking when values dip. Set up your contributions, then check quarterly — not daily. Markets fluctuate; staying invested through volatility is what generates long-term returns.
What to Expect in Year One
Month 1–3: Balance may be small ($100–$500). Market fluctuations will feel significant on a percentage basis. This is normal.
Month 6: You are building a meaningful habit. Continue.
Month 12: Review fees vs balance. At $5,000+ in Raiz (or equivalent), the $3.50/month fee is 0.84%/year — still high relative to ETF alternatives, but manageable. Consider whether to stay or graduate to a low-cost brokerage account.
When to Graduate to a Full Brokerage Account
Micro-investing is a starting point — not a long-term strategy for most serious investors. Consider moving to a standard brokerage account (SelfWealth, Pearler, CommSec) when:
- Your balance exceeds $10,000–$20,000
- You want to choose your own ETFs
- You want lower fees (e.g., $9.50 flat fee at SelfWealth vs ongoing monthly + percentage fees)
See Micro-Investing vs ETFs Australia for a detailed comparison.
Related Articles
- What Is Micro-Investing Australia
- How Micro-Investing Works Australia
- Start Investing with $100/month Australia
- Raiz Review Australia
- Micro-Investing hub
Frequently Asked Questions
How much should a beginner invest in a micro-investing app? Start with whatever you can afford without affecting your lifestyle — even $20–$50/month. Consistency matters more than amount when starting. As your income grows, increase contributions. The goal is building the habit and letting compounding work over time.
Do you need a TFN to use a micro-investing app in Australia? You are not legally required to provide your TFN, but if you don’t, tax will be withheld from your investment returns at the highest marginal rate (currently 47%). It is strongly in your interest to provide your TFN when signing up.
How long should you keep money in a micro-investing account? As a general guide, only invest money you won’t need for at least 3–5 years. Shorter time horizons are better served by a high-interest savings account. The longer you stay invested, the more likely you are to see positive returns — historically, diversified portfolios have recovered from downturns given sufficient time.
This article provides general financial information only. For advice tailored to your situation, speak with a licensed financial adviser through the ASIC financial advisers register or MoneySmart.