How can micro-investing help a young saver build their wealth?

We know the cost of living is rising, wages have stagnated for decades and the entry point for Australia’s property market has raced out of reach for many. Yet, in the same breath, we see an ever higher spend across Uber, fashion and dining out than ever before.

These realities make it very easy to frown upon, or worse, wag fingers at, the changing outfits, social lives and consumer electronics of the younger people in our lives.

But when it comes to wealth, I believe that rather than lecture we should attempt to understand young people’s environment and how we can effectively work within it.

Micro-investment platforms offer a generationally appropriate wealth-building tool that can, if used properly, help young people overcome restrictive entry points for long-term, high-growth investments, conveniently integrate investment into daily life and provide in situ access to financial services that might otherwise be perceived as too difficult or restrictive.

Investment app Raiz’s “roundup” feature is a perfect example of meeting young Australians where they are, while simultaneously empowering them to make better decisions and build their wealth.

By automatically investing the change from everyday purchases, the app turns every tap of a card (or phone!) into a “savings” event, effectively setting aside a percentage of every purchase for the future.

Even better, these platforms reduce what was once an overly intimidating process, choosing a brokerage account and portfolio, to a point-and-click process as simple as downloading from the app store.

Should the average 18- to 29-year-old “round up” $10 a week, it would take less than three years to surpass the median amount saved and invested for their age group.

After a decade they’d have more than 3.5 times that median, plus an extra $2000 in interest. Not a bad outcome at all!

Of course, there is no substitute for sound financial planning and careful spending, but if you are looking for easy wins, this could be a great start – and no mention of avocado or austerity required!