Investing these days is much simpler than it was in the past and is not always a one-size fits all for everyone. Mainly because as the market has grown people have different strategies, different goals with small vs. large amounts to invest in risky or conservative investments.
We have put together a list of ways to invest that are simple and do not require a huge amount of money. You can actually just invest pocket change to a few dollars each time.
These are different ways to invest that are not the norm compared to a retirement plan at work such as a 401(k) or 403(b) where your employer is in charge. These plans normally only deal with a brokerage and plan the employer choose. These are great for tax advantages and investing in your future especially due to the employer matching. In addition to your employer plan or if you do not work a traditional job and work from home you need ways to invest your money without all the brokerage hassles.
Acorns is a free mobile app with plans for a web-based application. This app allows you to automatically invest your digital spare change beginning with $5. You basically give the Acorns app permission to round up your purchases on debit or credit cards and then invest the difference by automatically pulling it out of your bank checking account.
For example, let’s say you link up a credit card and charge $11.25. Acorns app will round up to $12.00 and know that you need to invest the difference of $0.75. Then when you’ve accumulated at least $5 in total spare change, Acorns automatically takes it out of your checking account and puts it to work as an investment.
If this sounds similar to the Bank of America program where they once put extra change into savings you would be correct. Although with this program you can use as many debit and credit cards as you like. It is not limited to only one bank.
The investment works by picking one of Acorn’s five investment portfolios which range from conservative to aggressive. Each one is made up of six exchange-traded funds (ETFs) selected to achieve the portfolio objective. Just like any brokerage or investment program they charge a small fee of $1 per month for balances under $5,000 or 0.25% per year for balances over $5,000.
If you keep putting money into your investment portfolio through this app over 20 years or so your spare change could be worth over $20,000. This is a fun way to invest to watch your change grow without hurting your budget.
Acorns $5 New Account Bonus
Create an account here to get a $5 bonus automatically credited to your new account. If you already created an Acorns account, you can also enter Referral Code TM375Q on the main page of the Acorns App to get the $5 bonus credited to your account. You will then see the $5 bonus instantly added to your new Acorns account.
Acorns has no management fees on accounts of any size for all students but you must use your .edu email address or for anyone under 24 years old. Otherwise, there is a $1 per month fee for accounts under $5,000, and a .25% per year fee for accounts of $5,000 or more. They never charge fees for accounts with a $0 balance, and you can get started with as little as $5 (once your spare change meets that threshold). The best part is that you can withdraw any amount of your money at any time without having to pay any fees or penalties.
A new app that over 50,000 people were on a waitlist to join called Stash has finally launched. They allow people to invest for as little as $5 instead of waiting around until they have $100 or a few grand. Similar to Acorns they are making investing simple and accessible to all. The idea for Stash came from the weight-loss industry to make it easy to take a small step and make progress from there. To not get overwhelmed by all the stocks and funds to invest in they only let you pick from 30 funds. Users choose from ETF funds such as “Clean & Green,” “American Innovators” or “Global Citizen.” These funds are ran by investment firms like BlackRock (BLK), Vanguard and Charles Schwab (SCHW).
People who have over $5,000 invested through the app are charged a 0.25% fee a year. Stash charges $1 a month for balances under $5,000. Although if you’re only investing $5, you would quickly have nothing left because of these fees.
Robinhood is a trading app that allows investors to buy and sell stocks and ETFs for free. Robinhood allows you to start trading for as little as pennies although you need to have the money to back up your trades.
Betterment is another investment option where you can get started for as little as $100. This is an easy and efficient one-stop shop to invest for any goal. With Betterment you can open a regular investing account or an IRA, including a rollover from a former workplace retirement plan. The fees depend on your account balance, but as long as you have an automatic monthly deposit set up, it won’t be more than 0.35% per year. A bit higher than the Acorns app above but the potential to have a larger retirement is much higher.
Betterment gives you simple slider to indicate how you feel about investment risk where your money is automatically allocated across a suitable portfolio of low-cost ETFs that are right for you. Goals can be retirement, a home or a vacation and when you want to achieve it. Almost like watching an episode of the former CNBC show with Suze Orman where she helps people get to their goals by approving or denying but this gives you more of a plan.
Aspiration is an unusual way to invest that launched in late 2014 with the goal of bringing middle class investors sophisticated products that were previously only available to investors with massively high net worth. The Aspiration Flagship Fund is a collection of mutual funds designed to grow your money over the long term but also limiting volatility along the way. Aspiration uses a variety of advanced strategies to try to make money no matter if the stock market is moving up or heading down.CNBC’s Jim Cramer always says “There’s always a bull market somewhere”. To make profits they watch things such as global trends and corporate moves.
The cool thing about Aspiration is that you can decide what you want to pay them (even zero) to manage your money which builds trust plus they donate 10% of their revenues to charity. It takes $500 to get started and the maximum investment is $100,000 to stay focused on everyday investors. The con is that there are no retirement account options right now. You can only open regular taxable accounts.
FutureAdvisor is basically an online investment advisor that will manage investments you already own or new ones that you purchase through them. This will help you get the maximum return since they analyze your investments and tell you the best way to allocate your money. They offer regular brokerage accounts (taxable) or an IRA. They offer complete portfolio management based on unbiased advice, diversification, tax-efficiency and low-cost index funds.
A downside of FutureAdvisor is that they only work with Fidelity and TD Ameritrade. Although if you have an account with E-Trade or another broker they will do the paperwork to consolidate your investments there. The fee is a 0.5% annual fee for the investments they manage.