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5 Apps That Help You Invest

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What did we do before smartphones? Today you can do almost anything on your phone, even invest! These are the apps that help you invest.

Why Invest?

Investing is one of the best ways to grow your income because it’s a form of passive income. There are only so many hours that we can work so we need our money to be working when we aren’t. That’s what investing does. Our money makes us more money.

Many people shy away from investing because they think you have to have lots of specialized knowledge or lots of money to do it. But you don’t have to have either of those things to start investing with these apps. If you have $10 and fifteen minutes to spare, you can start investing immediately.

1. Acorns

Do you have a change jar where you toss your spare change at the end of the day? What do you do with that money, nothing, periodically take it to a coin counter machine to cash it in? Well, what if you could do something better with that spare change? What if you could invest it? Acorns lets you do just that.

Acorns is a micro-investing app that puts your spare change to good use. There are three ways to fund your Acorns account. Link credit and debit cards to your Acorns account. Each time you use those cards to buy something, Acorns will round up the purchase price to the nearest dollar.

When your round-up balance hits $5, Acorns withdraws that amount from your linked checking account and invests it. If you buy a magazine for $3.25, Acorns rounds up to $4 and invests that $0.75 once your balance reaches the $5 minimum.

If you want to accelerate your round ups, you have the option to multiple them by 2, 3 or 10. Our $0.75 round up from our magazine purchase can become $1.50, $2.25 or $7.50. You can turn the multiplier feature off and on whenever you want.

Acorns users can also set up recurring deposits from their checking account. We really recommend setting up recurring deposits. Regular investing is how you grow your wealth and recurring payments is a good way to insure that you pay yourself first. You automatically invest that money before you have the chance to spend it. For those of us who tend to be undisciplined with our saving, this is the perfect answer.

You can set up weekly or monthly contributions and choose the day it will happen. You can set the amount to anything over $5. You can also make one time contributions. This is a great way to make sure you don’t fritter away things like your tax refund or a bonus you receive from work.

Acorns also has a shopping portal called Found Money and when you shop there, merchants will give you cash back that Acorns will invest for you. Each merchant has a different cash back rate but most are between 2-10%. Some participants include Lyft, Walmart, and Udemy.

Where Your Money is Invested

Acorns portfolios are built using Modern Portfolio Theory by investing in stock and bond index ETFs that try to match overall market performance rather than trying to beat the market which is the difference between passive and active investing. This is what allows for low fees which is important for all investors. High fees can really take a big chunk out of your investments over time.

When you create your account, you will be asked some simple questions designed to determine your risk tolerance and investing goals. Based on your answers, Acorns will suggest a portfolio with an investment strategy that ranges from aggressive (best for younger investors) to conservative (best for investors nearing retirement).

You can change your allocation at any time and make it more aggressive or more conservative. Acorns portfolios are made up of a mix of stocks, bonds, and real estate.

Minimums and Fees

Acorns has no account minimum so you can open an account with no money. But Acorns will only start investing for you once you have $5 in your account either through roundups, contributions, or Found Money. Acorns charges a monthly fee of $1.

2. Wealthsimple

Wealthsimple was started in Canada and became available to American investors in 2017. One thing that sets Wealthsimple apart from many similar apps that help you invest is their offering of socially responsible portfolios. Weathsimple also has the best-looking interface of all of these apps. It’s easy to navigate and pretty to look at.

If you have social concerns, Wealthsimple lets you invest in portfolios that prioritize things like low carbon emissions, clean tech, and investing in developed and emerging economies with sustainable growth based on things like human rights and low levels of corruption.

Another feature of Wealthsimple that most other investment platforms don’t offer is access to a financial advisor even for those investors with less than $5,000 in their accounts. Wealthsimple customers can call, email or text a financial advisor with questions, a big bonus for those new to investing and unsure of themselves.

To fund your account, you’ll set up auto deposits from your checking account and you can also make one time contributions.

Where Your Money is Invested

Like Acorns, Wealthsimple’s portfolios are based on Modern Portfolio Theory. When you make your Wealthsimple account, you will answer a risk assessment questionnaire to determine your investing goals and you will be given a portfolio recommendation based on your answers.

Wealthsimple offers three portfolios; conservative, balanced, and growth. The portfolios are made up of a mix of stocks and bonds. You can change your allocation anytime and at no charge.

Minimums and Fees

There is no minimum to start an account with Wealthsimple. There is a 0% fee on your first year on accounts between $0-5,000. Accounts under $100,000 have a fee of 0.50% and accounts over $100,000 have a fee of 0.40%.

3. Stash

Stash is similar to the other investing apps on our list but offers a key difference. While most robo-advisors just offer a portfolio consisting of ETFs, Stash lets investors add shares of individual stocks to their portfolios.

If you’d like to try your hand at buying individual stocks but don’t know where to start, Stash will help educate you. The app will provide personalized advice and recommendations. Stash provides information about the fundamentals of each company’s stock they offer so investors can make an informed decision.

Stash also offers more than 40 themed investments. Investors can choose themes like Clean and Green, Eqaulity Works, Data Defenders, and Robots Rising so if there is a social cause you care about or a certain sector of the market you want to invest in, Stash neatly bundles those themes into portfolios for you.

You can set up auto deposits into your Stash account.

Where Your Money is Invested

Stash invests in ETFs containing a mix of stocks, and bonds and investors can add individual stocks too. When you create your account, you will be asked a series of questions that are used to determine your risk level. Once your level is established, you can’t change it but you can go back later and change the answers to your questions which may or may not change your risk tolerance.

Stash will offer you investment options best suited to your risk level which is conservative, moderate, or aggressive.

Minimums and Fees

There is no minimum to open an account but you do need to have at least $5 to start investing. Your first month with Stash is free. For accounts under $5,000 the fee is $1 per month and for accounts over $5,000 the fee is 0.25%.

4. Robinhood

Robinhood the legend was known to steal from the rich and give to the poor. Robinhood the investing app doesn’t steal from anyone but helped open up investing to everyone. Robinhood is an app that offers free stock trades. There is no catch. If you want to buy and sell individual stocks, you can do it for free with Robinhood. You can schedule auto deposits into your account weekly, biweekly, monthly, or quarterly.

Where Your Money is Invested

When you trade stocks on Robinhood, you determine where your money is invested. You can buy and sell individual stocks, ETFs, options, and cryptocurrencies. You are limited to U.S. stocks and ETF’s.

You can look up stock symbols on Robinhood and see a quote and some general information about the stock. If you want to see a company’s fundamentals, you’ll have to research it yourself, Robinhood doesn’t provide that information.

Because it’s free to trade on Robinhood, you may be tempted to try your hand at day trading. At Frugal For Less, we don’t recommend that approach to investing. It’s much more risky than investing using a buy and hold philosophy, and as any good investor knows, one of the most important aspects of investing is limiting risk.

Buying and selling individual stocks does take more knowledge than just investing with a robo-advisor so you need to do research on a stock before you buy it. If you don’t even know where to start, start with what you know and like. If you like Apple products, research Apple. If you are a long time Amazon customer, research Amazon.

There are a few basics you want to know before buying a stock. The price to earnings (P/E) ratio, which tell you what the market is willing to pay for a stock based on its past or future earnings. A very general rule of thumb is that a P/E below 15 is considered a cheap stock and a P/E over 20 is considered an expensive stock.

Beta which measures the volatility of a stock over the past five years. A beta of less than 1 means the stock is less volatile than the market as a whole. A beta of greater than 1 shows that a stock is more volatile than the market.

Read a company’s financial reports. All public companies must release quarterly and annual reports. You can find these at the Investor Relations section of the company’s site. Look for revenue growth and profit margin. Find out how much debt the company has and if the company pays out dividends which are a sign of good financial health.

There is certainly nothing wrong with buying individual stock provided that you’ve done your research but don’t devote too much of the money you have to invest to individual stocks. When you buy ETFs you spread out your risk because you are buying a large basket of stocks and risk management is one of the most important aspects of successful investing.

Minimums and Fees

There is no minimum to create an account with Robinhood, but of course, you have to have money in your account to buy stocks. There are no fees to buy and sell on Robinhood.

5. WiseBanyan

WiseBanyan is another robo-advisor but what sets it apart from the others is that WiseBanyan charges no fees for their basic service. This was one of the first robo advisors, and while it has been overshadowed by some of its competitors, WiseBanyan is still a great way to start investing.

You can set up auto deposits to fund your investments.

Where Your Money is Invested

WiseBanyan portfolios are made up of stocks and bonds, most of which are corporate bonds, and there is a REIT (Real Estate Investment Trust) ETF option too.

You will be asked questions to determine your risk tolerance and be given a score between 1-10, 1 being the least risk toleratn and 10 the most. Based on your answers WiseBanyan will automatically invest your money in a diversified portfolio. You can adjust your risk level at a later time so you aren’t locked into your original score.

Minimums and Fees

The minimum to open an account is $1 to your money won’t be invested until you’ve deposited at least $10 into your account. There is no fee for the basic service but you can get a more customized portfolio management service for an annual fee of 0.50-1.0%

What’s Our Favorite?

All of the apps that help you invest that we’ve reviewed here are legitimate and are all great ways for new investors to get started. The only exception would be Robinhood. It’s a great way to invest but buying and selling individual stocks takes more knowledge than those very new to investing may have. If you plan to use Robinhood, be sure to do your research.

Our only other caveat is for those interested in Acorns. If the only way you fund your Acorns account is through the Round Up feature, you aren’t going to be investing enough money to grow your wealth.

We grow our wealth by investing a relatively substantial amount of money on a regular basis. A good goal to aim for is to invest 10% of your income. It doesn’t all have to be invested in these types of accounts, the money you put towards a 401k or IRA count as part of the 10% too but the point is, investing only the change left over from your daily Starbucks run isn’t going to do much for your net worth.

The most important thing is to get in the game. There is no substiture for time when it comes to growing your money. The longer you sit on the sidelines, the more money you are leaving on the table.

I have at one time or another used all of these apps , nd while it’s not my only investment account, I still use Acorns which I have been using for several years. I did start out just investing the Round Ups but now I make regular contributions. Acorns is easy to use and I appreciate their philosophy, to make investing as easy as putting your spare change to good use.

As I said, you can’t make money only investing your spare change but for new, nervous investors, they feel like they aren’t risking much so Acorns is a great gateway to more serious investing. Those new investors aren’t so new eventually and they see how even the small amounts of money they have invested have grown which emboldens them to invest more.

When I was one of those scaredy cats afraid to do anything more with my money than hide it under my mattress, Acorns allowed me to get my feet wet without feeling intimidated. I appreciated it for myself and I appreciate it for other new investors.

It’s the Long Game

Investing is all about the long game. Open your account, contribute money every month and let it grow. Constantly pulling money out and then putting back in hurts your investment. It also causes uneccesary stress. No matter what is happening in the larger economy, leave your money invested and continue investing.

The stock market has highs and lows but over a long time horizon, you can conservatively expect to make an average return of 7% a year. Ignore all of the noise and drama around the stock market and the economy and let your money do its thing. Happy investing!

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