If you’re fed up with watching your spare cash dwindle as inflation runs riot, desperately trying to save some money and get ahead with your financial future, then you need to make a change. It may be time to take control of your finances and start investing.
Investing is more manageable than it sounds. In fact, with the vast range of hands-off investment apps available these days, there has never been a better time to get started.
Of course, choosing one to stake your financial future can be daunting with so many choices. To help you make the best decision, we’ll review some of the top investment apps available.
Whether you’re a beginner looking to dip your toes into investing or an experienced investor looking for a new platform, we’ve got you covered.
Why should you invest?
But why should you invest your money in the first place?
Investing is helpful because it can allow you to grow your wealth over time and effectively make your money work for you – rather than the other way around.
By investing in various assets that grow in value over time, your money accumulates along with it which is particularly useful in these times of rampant inflation. Inflation results from currency debasement, in which a currency devalues over time. This means that the money currently sitting in your bank account is leaking away at an alarming rate (when you extrapolate it across decades).
However, if you invest in inflation-beating assets, you will avoid having your wealth drain away. Now that you understand some essential benefits of investing, let’s move on to the best investment apps you can use.
Our favorite investment apps…
In no particular order, here are our favorite money investment apps for 2023.
Please note you should always do your own research before investing, and read the associated terms and conditions.
Our first choice is Acorns, an excellent investment app for beginners.
It’s easy to use and focuses on helping you invest your spare change, which is a great place to get started.
So how does it work?
When you purchase with your linked debit or credit card, Acorns rounds up the amount to the nearest dollar and invests what’s left into a diversified portfolio of exchange-traded funds (ETFs).
For example, if you spend $3.75 on a coffee, Acorns will round up to $4 and invest the remaining $0.25. These small investments can add up over time and help you grow your wealth without thinking about it. It’s completely hands off so you don’t need to worry about what to invest in and why – it does all the legwork for you.
Plus – to help you better understand the complicated world of investing, Acorns also offers educational content for you to go through. This can help you make better-informed decisions about your money.
Like Acorns, Stash is an investment app geared towards beginners. It offers a variety of investment options, including ETFs and individual stocks, and provides educational content to help you make more informed decisions.
One of the great things about Stash is its thematic portfolios, which allow you to invest in companies that align with your values. For example, if you’re interested in investing in environmentally friendly companies, you can choose a portfolio focusing on renewable energy and sustainability.
Stash also has a low minimum investment of just $1, making it an accessible option for anyone looking to start investing.
Robinhood is a popular investment app that offers commission-free trading of stocks, ETFs, options, and cryptocurrency. It’s a fantastic option for experienced investors or those looking to trade in the stock market actively.
Robinhood is a good option thanks to its lack of trading fees. Most brokers charge a fee for every trade you make, which can add up quickly. With Robinhood, you can create as many trades as you want without worrying about racking up fees.
However, it’s critical to note that while Robinhood doesn’t charge trading fees, it does make money through margin lending and selling order flow. So be sure to read up on these details before using the app.
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Betterment is a robo-advisor that offers a variety of investment options, including taxable accounts, IRAs, and trusts.
It uses algorithms to create a diversified portfolio based on your individual risk tolerance and investment goals and automatically rebalances your investments to ensure they stay aligned with your goals.
One of the advantages of using a robo-advisor like Betterment is that it takes the guesswork out of investing. You don’t have to worry about picking individual stocks or trying to create a diversified portfolio yourself. Instead, betterment does it all for you.
Wealthfront is another robo-advisor offering various investment options, including taxable accounts, IRAs, and trusts. Like Betterment, it uses algorithms to create and manage a diversified portfolio based on your risk tolerance and investment goals.
An interesting feature of Wealthfront is its goal-based planning tools. You can set specific financial goals, such as saving for a house deposit or planning for retirement, and Wealthfront will help you create a personalized investment plan to achieve them.
Vanguard is one of the world’s biggest investment brands Its app offers various investment options, including mutual funds and ETFs.
It’s a compelling option for beginner investors or those looking for a trusted name in the industry. And a useful benefit of using Vanguard is its low expense ratios.
Expense ratios are the fees that mutual funds and ETFs charge to cover their operating expenses, and they can eat into your returns. Vanguard is known for its low expense ratios, which means you can earn higher investment returns.
Fidelity is another well-known investment firm that offers a variety of investment options, including mutual funds, ETFs, and individual stocks. It’s an excellent option for beginner investors or those looking for a full-service brokerage firm.
A great feature of Fidelity is its cash management account, which combines the features of a traditional checking account with the ability to earn interest on your balance. As a result, it’s a convenient way to manage your money and earn a little extra on the side.
Ally Invest is an online brokerage firm that offers a variety of investment options, including mutual funds, ETFs, and individual stocks. It’s an excellent option for beginner investors or those looking for a low-cost investment.
Ally Invest also boasts particularly low commissions. The firm charges just $4.95 per trade, making it an affordable option. It also offers a variety of educational resources to help you learn about investing and make informed decisions about your money.
Understand the fundamentals of money and investing first.
Learning the fundamentals of money and the financial system is vital to becoming a successful investor.
Whether you’re just starting your investing journey or have been at it for a while, understanding how money works are crucial for making informed decisions about your financial future.
So, where do you start?
Here are some key concepts to help you get a handle on the fundamentals of money and the financial system:
The nature of money
At its most basic, money is a medium of exchange. It is also a store of value, meaning it can be saved, invested, and exchanged for goods and services in the future.
Money can take many forms, such as cash, checks, debit and credit cards, and even digital currency.
What role do banks play?
Banks play a vital role in the financial system by providing a safe place to store money, issuing loans and credit, and facilitating financial transactions.
For example, when you deposit money in a bank, it becomes part of its reserve, which is then used to lend to other customers or invest in financial instruments. In return, banks pay you interest on your deposits, which is how they make their money.
The importance of credit
Credit allows you to temporarily borrow money with the requirement to repay it in the future, along with interest. Credit is extended by lenders, such as banks, credit unions, and finance companies, and is typically given as a loan or credit card.
Credit is necessary because it allows people and businesses to borrow money to make purchases or investments that they may need the cash to make upfront.
However, it is crucial to use credit responsibly and only incur debt you can afford to pay back, as unpaid debts can have serious consequences, including damaging your credit score and incurring late fees and additional interest charges.
The concept of interest
Interest is the cost of borrowing money, expressed as a percentage of the borrowed amount. For example, if you borrow $100 at a 10% annual interest rate, you will owe the lender $110 at the end of the year.
The interest rate on a loan or credit card is typically determined by various factors, including the borrower’s creditworthiness, the length of the loan, and the lender’s risk.
The different types of investments available
There are many varieties of assets, each with its own risks and potential returns. However, some common investments include stocks, bonds, mutual funds, and real estate.
Stocks represent company ownership and can provide income and capital appreciation.
Bonds are a kind of debt security issued by companies and governments, offering a fixed return over a specified period.
Mutual funds are a type of investment that pools together money from many investors and uses it to buy a diversified portfolio of stocks, bonds, and other securities.
Real estate investments involve purchasing, managing, managing, and selling properties to generate a profit.
The stock markets
A stock market is where publicly traded companies’ stocks are bought and sold. It is an integral part of the financial system because it provides a way for companies to raise capital by selling shares of ownership in the form of stocks.
It also allows investors to buy and sell these stocks to earn a profit. The stock market fluctuates based on various factors, including economic conditions, company performance, and market trends.
Diversification is a key concept in investing. It involves spreading your investments across various asset classes to reduce the impact of any one investment on your overall portfolio. The idea is not to have all of your eggs in one basket, so to speak.
There are several benefits to diversification.
First, it can help minimize your risk by ensuring that your portfolio is not overly exposed to any investment. For example, if you only invest in a single company’s stock and that company performs poorly, your entire investment could be at risk.
On the other hand, if you diversify your investments across multiple companies and sectors, the impact of any one company’s performance on your portfolio will be lessened.
In addition to reducing risk, diversification can also help to maximize your potential returns. Investing in various assets allows you to capitalize on the strengths of different investments and achieve a more balanced and stable return over time.
It’s critical to note that diversification does not guarantee a profit or protect against loss. It’s still possible to experience losses even with a diversified portfolio.
That’s why it’s essential to consider your investment goals, risk tolerance, and time horizon when building a diversified portfolio. It is also helpful to seek the advice of a financial professional when creating an investment strategy.
Invest your money
As you can see, there are an impressive variety of investment apps are available for you to experiment with.
Choosing the right one comes down to your requirements, your current lifestyle and how much money you want to invest.
By learning more about the fundamentals of investing and taking a closer look at each app (as well as the many others on the market), you will quickly build a clearer picture of which one suits you the best.