Building an investment portfolio with pocket change

Jemma Brown • September 21, 2022

The concept of investing in shares or other investment products can put a lot of people off. It can be difficult to understand, the share market is intimidating, and investment brokers generally only deal with people who have a lot of money to invest.

Micro-investing came about as a way to help more people get into investing without all the complexities that usually come with it. There are quite a few providers in Australia now, and they’re all app-based with very low minimum investments (or no minimum at all). Micro-investing is often referred to as ‘pocket investing’, because all you need is a phone and some spare change to get started. It’s become popular with younger people in particular as an alternative to high-interest savings accounts.

Here’s how it works.

A new approach to investing

Micro-investing is simply an investment platform that allows people to invest small amounts of money into specific investments (usually exchange-traded funds or managed funds) while taking care of all the admin involved with investing.  

While each provider does things differently, this is what they have in common:

  • Low minimum investment. Some providers let you open an account with no money at all. Others have a tiny minimum investment amount (as low as $5).
  • No need for an investment broker. The investing is done for you automatically, and you can make changes yourself in the app.
  • Choose investments that fit your risk profile. Similar to managed funds, you can choose a portfolio that matches the level of risk you’re comfortable to accept.
  • Easy to understand. Because these products are generally aimed at beginners, they avoid investment jargon and use language that everyone can understand.
  • Low cost. The fees the providers charge (either as a monthly account fee or a brokerage cost per transaction) are a fraction of what you’d pay using an investment broker.
  • Keep track of your balance. The benefit of being app-based is that you can check your balance at any time.
  • Simple tax information. Most people need to declare dividends and other investment interest in their tax returns. Micro-investing apps compile all the information for you so you can pass it straight to your accountant.
  • Accessible to everyone. All you need to do is download the app, set up your account, and make some decisions about how to want to invest.
  • Invest as often as you want. You’re not locked into investing in any particular way. You can choose to add money to your investment whenever and however it suits you.

One of the golden rules of investing is to take advantage of the compounding effect to grow your money faster. In other words, you’ll earn market returns not just on the money you invest but also on the growth that money generates.

If you invest regularly and also reinvest the regular dividends you’ll earn from your investments, then compound interest will be even more powerful.

Investing regularly also allows you to use a strategy called dollar-cost averaging. This is a way of reducing market timing risk by investing regularly over a long period of time rather than investing a one-off lump sum. The price of investments listed on the share market will constantly go up and down, so investing regularly helps you take advantage of these price fluctuations.

Investing is never risk free

Just because you’re investing with smaller amounts doesn’t mean you won’t be exposed to the same risks as other investors. Your money is still invested in the share market, and that means you will see your balance move up and down as a result of market volatility from time to time. That’s why it’s important to choose a portfolio with a level of risk you’re comfortable to accept. Generally speaking, the higher the potential return, the higher the risk of losses.

As with any type of financial product, it’s important to do thorough research and understand any fees and costs that apply. Read the Product Disclosure Statement before making any financial decisions so you know what you’re getting into.

If you have any questions about investing, your financial adviser is the best person to speak to. They can help you work out what makes sense for your particular financial situation and what type of investments will help you meet your financial goals.

Source:  Colonial First State

The information in this article does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Capstone Financial Planning nor their directors, employees or authorised representatives gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document. Principal Wealth Management Pty Ltd trading as BMO Financial Solutions ABN 53 109 336 601 is a Corporate Authorised Representative (CAR 277821) of Capstone Financial Planning Pty Ltd ABN 24 093 733 969 Australian Financial Services Licence (AFSL) No. 223135.

Do you know how your super is performing?

By Nikki Ashurst • November 2, 2026
Many Australians don't know how their super fund has performed or what it invests in. Are you one of them? Here's what to check and why it matters. Do you know how your super fund performed over the last two years? Many Australians don’t and are working towards their financial future without fully understanding one of their most important assets and without a clear plan for how their super may support them in retirement. That's not surprising, as many people view super as something that should run quietly in the background while they're busy with careers, families and everything else that life throws at them. But when you’re not sure what’s happening behind your balance, it’s harder to know whether you’re on track, whether your current approach reflects your goals or what opportunities might be available to help you make the most of what you’ve built so far. Your super isn't sitting in an account, it's invested Super is invested by a fund on your behalf across a mix of assets, with those investments working to grow your balance over time. Those include: Shares Ownership in Australian and international publicly listed companies. Their value can rise and fall, sometimes substantially over short periods but shares can provide capital growth over the long term. Property and infrastructure Real assets like office buildings, shopping centres, airports and energy networks. They can produce income and don't always behave in the same way as share markets, helping diversify investment holdings. Fixed interest and bonds Lending to governments and companies in return for interest. They can provide regular income and be steadier than shares, although returns and risk vary depending on the investment. Cash Generally, the most stable and lowest risk investment type. It can provide stability and faster access to money but typically offers lower longer term return potential. The investment option you choose determines the mix of assets held in your super based on your risk appetite. Most super funds offer options from conservative to high growth. If you’re young, a growth option with a higher exposure to growth assets like shares could offer higher returns over time – but it also comes with higher risk. As retirement nears, you might want to consider a more conservative approach with more defensive assets, like bonds for example to protect your savings. If you've never made a choice, you're probably in your fund's default option, which is designed to suit a broad membership. It’s worth knowing whether the mix you're in matches your circumstances and goals, including how far you are from retirement. Why performance alone is not a true comparison If you're thinking about how your super compares, returns are often where people start. The trouble is that a return figure means nothing without context: What it's being compared to Growth and conservative options invest differently and with different levels of risk. Compare like with like or the comparison may not be genuine. The comparison period A single year can be heavily influenced by short term market conditions. Super is measured in decades, so five, seven and ten year returns tell you far more about whether a fund is consistently doing its job, albeit not a predictor of future performance. Fees and tax Published returns should reflect investment fees, costs and tax but administration fees may be charged separately from your balance. Two funds quoting the same return can leave you in meaningfully different places once all fees are accounted for. Then there are the things that returns can't show you at all. For example, what insurance is attached to your account and what it's costing you, whether the fund offers guidance, tools and advice or simply sends a statement once a year. Another consideration maybe the level of support available when you need it. When comparing funds, it's worth looking at the full picture, including performance, fees, investment options, retirement support and member benefits. What today’s decisions mean tomorrow To understand how your super stacks up, start here: Find your investment option It's on your annual statement and in your online account. Look at what's in it Your fund publishes the asset allocation (shares, cash etc.) for each investment option. Check the long-term return for that option Focus on five and ten year returns, not just last year and compare them with equivalent options. Understand the total cost Add together administration fees, investment fees and insurance premiums as an annual dollar figure. Comparing super is about working out which option will perform best for you. Before you jump in, it’s worth understanding what's behind the numbers so you can make decisions based on more than a headline return. Knowing where you stand is the first step A super balance tells you where you are today. Understanding how your super is invested, how it compares and whether it's aligned with your goals helps show whether you're heading in the right direction. Source: MLC The information in this article does not take into account your objectives, needs and circumstances. We recommend that you obtain investment and taxation advice specific to your investment objectives, financial situation and particular needs before making any investment decision or acting on any of the information contained in this document. Subject to law, Capstone Financial Planning nor their directors, employees or authorised representatives gives any representation or warranty as to the reliability, accuracy or completeness of the information; or accepts any responsibility for any person acting, or refraining from acting, on the basis of the information contained in this document. Principal Wealth Management Pty Ltd trading as BMO Financial Solutions ABN 53 109 336 601 is a Corporate Authorised Representative (CAR 277821) of Capstone Financial Planning Pty Ltd ABN 24 093 733 969 Australian Financial Services Licence (AFSL) No. 223135.

The SMSF landscape is changing

By Jude Schofield • October 7, 2026
More Australians are choosing to take direct control of their retirement savings by establishing a self-managed super fund (SMSF) and according to the SMSF Association, Aussies now see their super as an important part of building and managing their overall wealth.