Recently, there have been some popular apps that allow Micro-Investing: buying super small quantities of investments.

While there is nothing inherently wrong with the investments themselves, there is a risk that you will get a false sense of accomplishment, which can lead to complacency. And, complacency can lead to missed opportunity.

Micro-Investments lead to Micro-Wealth. If you want real wealth, you’re going to have to work a bit harder.

The great news is that you don’t have to work that much harder! By starting early enough and participating in the market, you can build real wealth with fairly small monthly contributions.

Micro-Investment Apps

Two major players in the micro-investing space are Acorns and Stash.


Acorns rounds your everyday purchases up to the next dollar and sends the difference to your investment account. Fees start at $1 per month.


Stash allows you to buy parts of shares of stocks or ETFs instead of whole shares, which allows you to get into the market with less money. Fees start at $1 per month.

The Acorns Upside

To estimate the potential, let’s look at Acorns. If we assume that you make 50 transactions per month and each transaction averages about $0.50 to Acorns, that means that you’re investing $25 per month into your portfolio.

Future Value of Micro-Investments from age 25 to 65 with 8% return

If we assume that you can get an average 8% annual return on your investment, this chart looks AWESOME! I mean: just look how it grows!

But, check out the details…

Sure, $25 per month in spare change is small enough that you probably won’t notice it. But, the future value of those investments won’t turn into much either. If you start at age 25 and invest $25 per month for until age 65, you will have about $85k (assuming 8% rate of return).

Sure, $85k is not nothing, and if someone offered me a free $85k at retirement, I would definitely take it. But, $85k is not a huge nest egg and at age 65 it is not enough to significantly change your financial life. Especially since it took 40 years to build!

If you want to make a real difference in your retirement, you’re going to have to work a bit harder.

A Real Nest Egg

So, how much more would it take to build a significant nest egg? Is real wealth out of reach? Is $85k all anyone can hope for?

It turns out, you can build a super nice nest egg with just a bit more per month.

If you could set $100 aside per month and get the same 8% return from age 25 to 65, you’d have about $335k. Now we’re talking!

Future Value of Micro-Investments vs $100 per month from age 25 to 65 with 8% return

No 401(k)? No Problem

A huge percentage of American workers don’t have access to a 401(k). As a result, they feel like they don’t have access to the wealth-building retirement dream machine. Well, it turns out they do. Most people in the US (with some income restrictions) have access to a Roth IRA.

If you were to max out a Roth IRA from age 25 to 65, which is currently $6,000 per year ($500 per month), and received the same 8% return, you would have a whopping $1,680,000 in your account when you start retirement. Plus, with the Roth IRA, all that money would be available tax free! (you can double ALL of those numbers if you’re married)

Future Value of Micro-Investments vs $100 per month vs Roth IRA from age 25 to 65 with 8% return

I know that $500 a month is a lot for a huge swath of the population in the US. But you don’t have to start there. If you do $100 per month from 25 to 65, you’ll end up with $335k. But, if you boost that $100 a little bit every year then you can boost that $335k too.

How to get started

If you’d like to get into investing but don’t know where to start, here are some articles that might help:

Investing in the S&P 500 is a bet on America

Use Diversification to profit from all market conditions

A review of Fidelity Go

Or, you can grab my book from Amazon. Part 3 explains my approach to investing in detail and will help you choose between account types, select investments, and build a portfolio.

Final Thoughts

This is not a review of Acorns or Stash. I haven’t used them, and I’m sure they are fine for Micro-Investing and building small piles of money.

Instead, this article is meant to be a reminder that if you do the absolute minimum in anything, you can expect to get the minimum back.

Go ahead and use Acorns or Stash if you would like. They’re a nice way to dip your toe into the investing water. But, don’t let these micro-investments lull you into complacency. If you want to build wealth you will have to do more.

The great news is that you won’t have to do that much more to have a huge impact on your retirement. Just use Acorns and you’ll have about $85k. Boost your investment to just $100 per month and you could have a nest egg of over $300k by retirement.

I hope this has been helpful! I welcome your comments with your thoughts and questions. And, don’t forget to subscribe to the newsletter to get notified whenever a new article is posted.

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