Investing
Investing is a lot like saving, except instead of setting aside money for later you are putting your resources into assets that you expect will grow in value and that you’ll be able to share in the profits in the future. There are a lot of different ways you can invest, but in the world of personal finance, the most common way is through buying stocks and bonds. In recent years technology has made it possible for more people to invest more easily, in more ways, and without having a ton of money to start with.
This site for Financial Gym is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com. The compensation Financial Gym receives may impact how and where links appear on this site. Financial Gym does not include all financial companies or all available financial offers.
How to Invest
There are 2 main types of investment tools: robo-advisors and self-directed investment tools. You can choose to manage the funds yourself or to have the platform manage it for you.
Robo-Advisors
What’s a robo-advisor?
A robo-advisor is literally a robot (or computer algorithm) that invests on your behalf instead of a human being. What they do is collect information about a user’s financial situation and future goals, usually through applications and surveys. This information is then translated into an investment portfolio based on these specified goals and the time in which you would like them achieved and the platform invests your money accordingly. Typically the further away you are from your goals in the timeline, the more aggressive your investment profile will be (aggressive meaning your portfolio will include more stocks than bonds).
Why do we love robo-advisors?
We love robo-advisors because they simplify the entry into the world of investing. They make investing accessible to newcomers and offer low annual fees, which allows consumers to keep more of their earnings. Robo-advisors also keep their investors engaged and informed with simple explanations on their investments, as well as consistent newsletters and resources to help increase their financial literacy.
B.F.F. Approved Platforms
-
Details
Betterment is best for people who don't want to actively manage their investments and would rather have investing decisions made for them. It's a good option for people building wealth for multiple goals at the same time and people who value intuitive graphics and ease-of-use. It has SRI options and offers checking and savings accounts. No minimum amount is required to get on board!
-
Details
We love how easy and automatic it is to start investing with Acorns. Once you link a credit or debit card, Acorns will set aside your spare change with what they call Round-Ups® from every purchase and invest your money in a diversified portfolio once you hit $5. You do have to pay a monthly subscription fee to use Acorns.
-
Details
For a monthly subscription fee, Stash makes it easy to start investing in either a retirement or brokerage account. You can decide how involved you want to get as they allow you to choose your own investments or pick from an automated portfolio. Stash's Stock-Back® Card even lets you earn stock rewards on your everyday purchases.
Self-Directed Investing
What is self-directed investing?
A self-directed portfolio is an investment account in which the investor has complete control of how their assets are invested and moved within the account.
Why we love self-directed investing
We love self-directed portfolios because of the benefits that people receive from managing their own account. By cutting out the middleman (investment advisors), users are able to not only keep more of their earnings but also be more involved with the assets that they are investing. Investing through a self-directed portfolio allows people to do the necessary research required to effectively manage the account, which in turn increases their financial literacy! A lot of companies that provide self-directed portfolios include plenty of services to improve the quality of investors' experience, which also make these accounts great for beginner and intermediate investors.
B.F.F. Approved Companies
-
Details
Sofi Active Invest is a fee free investing platform that allows users to invest easily with a user friendly app. It’s great for people who want to trade in ETFs, cryptocurrency, and stocks (including fractional shares). It is geared towards more active traders but lacks access to bonds, mutual funds, or options.
-
Details
Robinhood is a very popular trading platform known as a discount broker and allows users to purchase stocks, ETFs, options, and other assets. Some limitations apply, but Robinhood is a commission free platform that lowers the barriers to investing. Fractional share purchases are available for most assets and they boast additional features like a debit card and checking accounts that earn interest.
-
Details
For a monthly subscription fee, Stash makes it easy to start investing in either a retirement or brokerage account. You can decide how involved you want to get as they allow you to choose your own investments or pick from an automated portfolio. Stash's Stock-Back® Card even lets you earn stock rewards on your everyday purchases.
Other Investment Tools
-
Your money can be your most valuable tool to fight climate change — if you know where to put it. GreenPortfolio gives you climate-first ratings of stocks, funds, and banks — and can analyze your portfolio for climate impact in minutes — so you can finance a future you believe in. Sign up for GreenPortfolio today!
Cryptocurrency
Cryptocurrencies are digital forms of currency that you can buy online and use as a form of payment. Cryptocurrency is a volatile investment, but proponents see a great deal of potential in it. It’s not universally accepted as a payment method, but adoption is growing every day.
Why we like Cryptos
Cryptocurrencies are part of the new frontier in personal finance, so it’s probably a good idea to get acquainted! They can be a good way to diversify your portfolio if you’re already invested in stocks, bonds, and cash. They should not be a replacement for those types of assets, but rather an accompaniment, a “side dish'', if you will, to the main course of stocks/bonds/cash.
How-To Crypto
Buying cryptocurrencies is similar to buying anything else online. You have to know what you want (the name of the cryptocurrency), how much you want to spend, and where to buy it! You can buy and store crypto with many apps, such as Robinhood and Sofi, but also through other platforms, sometimes called “wallets.”
B.F.F. Approved Companies
-
Details
Coinbase is currently the most popular platform for buying cryptocurrencies in the United States. Coinbase offers dozens of the most popular cryptos out there, including Bitcoin, Ether, Litecoin, Chainlink, and Bitcoin Cash, among others. You will be paying transaction fees on your purchases, so factor that into the amount you can afford. Coinbase will let you see the transaction fee before you purchase so that you can adjust the amount you’re buying, if need be.
-
Details
eToro is another online platform where you can buy and sell cryptocurrencies. What makes this one unique is its CopyTrader technology feature. You can literally copy the portfolios of other crypto traders, which is great for beginners or for people who are curious about how others manage their crypto portfolios!
Opinions expressed here are authors alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved, or otherwise endorsed by any of the entities included within the post.