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Money Matters Blog

Tuesday, September 1, 2015

Investing Made Easy: There’s an App for That

Investing can seem like a complicated and mysterious beast. How are we supposed to make sense of all of the jibber-jabbery jargon and numbers? Company-matching 401ks, Roth IRAs maxed out at $5,500 annually, $3,000 minimum investments, $8.95 fees for every trade, any time you trade and many more mind-boggling figures.

Prices like that make investing intimidating to anyone remotely interested in putting their money to work. Fortunately, three companies are taking advantage of new technologies by releasing apps and services that make investing a lot friendlier to people with a bit of pocket change, enabling us all to do something a little different it than letting our money gather lint in our sock drawers.

Just how much easier are these companies making it? Of the following three listed below, the highest minimum balance required is only $250. As far as introducing us to investing, one app is completely passive, meaning you don't need to do anything but set it and forget it. Another asks that you know a little bit about the company you want to invest in, and the last is variable - you can do as much or as little research as you like. No time needed, to as much time as you want. Prices range from (almost) free to $250. Sounds good, right?

Today's Top Three Investing Apps 

Acorns (no minimum $ needed): Acorns is an app that rolls over the change from any purchases you make into an investing account. Say you buy a used book that's $4.85; $.15 gets rolled up, and every time your rollups add up to $5, an investment is made in a diversified portfolio, meaning a combination of stocks, bonds and short-term investments. You can pick between several different assortments, depending on how long you'd like to invest for, and how much risk you'll tolerate. Acorns will then make projections for your portfolio with best and worst case scenarios over a span of time. Though there are small fees and they are higher proportionately than they would be for large investment firms. Acorns allow you access to investing in great funds that no other company does.

Robinhood (minimum $ needed: the cost of a single share of stock): Their motto: “Stop paying up to $10 for every trade.” That means if you only want to buy a share of a company worth $10, you don’t have to pay an additional fee on top of that, thus simplifying the math and the process of buying stocks. What's more, the company is open about how they make money and about how technology makes their non-existent trading fees possible. They also have no minimum deposit, which when compared to the $500 minimum for both E*Trade and Scottrade, and $1000 for Schwab, it makes Robinhood a great beginner's option into the world of stock trading.

Motif Investing (minimum $ needed: $250): Motif is a way of packaging up to 30 companies together, called a concept, and you only get charged $9.95 for the entire transaction instead of the 30 trading fees you would be charged at other brokerages. Concepts can be trends (like tablets, wearable tech, and healthcare), a trading strategy (buying when stocks take a dip) or a retirement focus with an accompanying timeline. This allows you to invest in what you know, whether that is a certain industry, a place in the world or companies that are socially responsible. Motifs is both professionally built and generated by the community, so they all come with extensive history, user ratings and feedback.

These apps are a great, low-risk place to start for those interested in dipping their toes into the (not so scary) investing tide pool.

Photo by Pictures of Money via cc.
 By Alex Jeffries Copyright 2015 brass Media, Inc.

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