How and what to invest small amounts in? Your guide to the world of small investments

Investing has long ceased to be the preserve of the wealthy. Today, even small investors can become part of this corner of the financial world and grow their money over time. Micro-investments (small investments), that is, investing small amounts, are becoming increasingly popular and accessible. Thanks to this, you can build your wealth gradually, without needing a large amount of starting capital.

Whether you're a beginner looking for safe ways to start, or an experienced investor who wants to diversify their portfolio, here you'll find practical advice and tips on how to effectively grow even small sums.

Why invest small amounts?

Investing small amounts can have several key advantages. It allows you to build wealth gradually, reduces risk through diversification, and provides greater financial flexibility. In some cases, even small, regular investments can bring (thanks to compound interest) significant returns.

Last but not least, micro-investments are a great way to improve your financial literacy and gain practical experience with investing without major risk.

What are the options for small investments?

There are now plenty of options for where to invest small amounts. They include various financial products and instruments that may be suitable for investors with less capital.

Here we've picked 7 of them:

1. Stocks and ETFs: You can invest either in individual company shares, i.e. in specific firms, and your investment will grow if the firm does well. An alternative option is investing in ETFs (Exchange-Traded Funds), which are exchange-traded funds containing various stocks or other securities. They offer diversification and are often more affordable than buying individual shares.
2. Bonds: You can invest either in government bonds (which tend to be a safer investment with a lower return) or corporate bonds (which carry higher returns than government bonds, but also higher risk).
3. Investing in real estate or real-estate funds: A complex topic that we've broken down for you in our article on investing in real-estate funds. There you'll read, for example, about the differences between investing in a real-estate fund and directly buying an investment apartment.
4. Crowdowning (co-ownership) of real estate: In this model you, as the investors, are co-owners of the property, yet you're protected from the unnecessary day-to-day hassle associated with owning it. InvestBay is a platform where you invest through crowdowning. Read about how it works with us.
5. Crowdfunding: Investment crowdfunding (so-called equity crowdfunding) works like this: you (the investor) contribute money to a project or company, and in return you acquire a stake in that company. Thanks to this, you can share in the profit if the firm does well. We've broken this method down in more detail in our article on the topic of crowdfunding.
6. P2P loans: Investors can lend money directly to individuals or small businesses through online platforms. This type of investment may offer higher returns, but with a higher risk of loans not being repaid.
7. Cryptocurrencies: Investing in digital currencies (bitcoin, ethereum, etc.) is highly volatile and risky, but with the potential for high returns.

What you ultimately invest in then depends purely on your own judgment and on weighing all the pros and cons.

The advantages of investing small amounts

• An easier start: Anyone can start, even at a young age. Besides starting to build wealth as early as possible, you also start to form long-term investment habits.
• Portfolio diversification, and therefore a lower risk of losses: Small investments make it easier to diversify your portfolio, which can reduce overall investment risk. Investing small amounts means less exposure to risk – i.e. if an investment doesn't work out, the loss is relatively small.
• In some cases, higher liquidity: Smaller investments can be quicker and easier to sell than large, complex investment packages.
• Often lower emotional stress and anxiety associated with investment risk, which is especially useful for novice investors.
• Micro-investments in real estate with InvestBay also offer cheaper travel to our locations.

The disadvantages of small investments compared to large investments

Besides having to come to terms with the fact that, logically, smaller investments generate smaller absolute returns, even though they may have a similar percentage return to larger investments, there are also these 3 possible disadvantages:

• Possible higher fees: Trading or fund management fees can be relatively higher for small investments in proportion to the size of the investment, which can reduce the net return.
• Limited access to advantageous investment opportunities: Some investment opportunities, such as certain funds, private equity, or large real-estate projects, may require a minimum investment that is out of reach for small investors.
• Lower bargaining power: Small investors have less ability to influence decision-making in the companies or funds they invest in, unlike large investors, who may have a more significant say.

The truth is that micro-investments with InvestBay break out of the established concept. That's why these disadvantages don't apply to InvestBay either.

• The fees at InvestBay are precisely defined, and their level always differs according to the specific property. You know their exact amount in advance – it's available in the information prospectus for the given property. Typically it's a range of 0–5%.
• You have access even to the most luxurious resorts in our offering, whether you want to invest the minimum, 10,000, or 200,000. Find out how it works with us.
• With us, every investor has the option to vote, and thereby to take part to some extent in the development.

How to do micro-investing with InvestBay

Investing with InvestBay is easy. When building our platform, we focused on making everything as transparent and understandable as possible, even for complete beginners in investing.

1. Sign up. It takes you about 3 minutes.
2. Fill out the investment questionnaire.
3. Browse all our investment projects, that is, properties all over Europe that you can invest in right now. You'll surely appreciate that in the project overview you immediately see the estimated annual return as well as the investment length, and in the detail then all the additional information including photographs. After registering, you'll gain access to financial documents and detailed information.
   Tip: Calculate the return on your investment, the appreciation, and the yields with our investment calculator. Quickly and easily.
4. Have you chosen what to invest in? If you're investing with us for the first time, we need to know your identity. After selecting a project and the amount of the investment, you confirm the order, and verification of your identity follows. All you need for it are 2 identity documents and a mobile phone. The whole thing takes around 5 minutes. All your further orders will then dispense with this identity verification.
5. Decide for yourself how much you want to invest. The minimum value of a single investment is 2,500 Kč (100 EUR). If you're nervous or new to the world of investing, such a micro-investment will let you understand the whole platform and later make a more informed decision. And we're sure you'll soon decide to invest more.
6. You place the order and securely transfer the money to the account. Done!
7. Once the full amount is raised, we buy the property and transfer it in the land registry to us, to InvestBay.
8. In addition to receiving a share of the property's sale at the end, you also receive money from renting out this property. What's more, you too can set off here on holiday and stay at a discount.

Start investing in the simplest possible way – start with crowdowning at InvestBay. With us, investing is easier to picture, even for beginners. Begin your investment journey today.