Financial wellness is a pretty broad topic with a lot of moving parts. Your salary, savings, budgets, assets, and investments all play a part in your overall financial wellbeing. In our series, we’ve covered the best budgeting tools, how to negotiate salary, and the power of small investors. But we also had to ask—what are the best platforms to invest with? Also, can you really trust your money to an investing app?
Investment used to be done through a broker or on a handful of portfolio management websites like Etrade and Fidelity, and many stock purchases are still made that way! Before people had the internet, they would call stockbrokers to make purchases and sell shares. The market today moves a lot faster, and stock trading apps and investing apps are disrupting how people make their choices and invest money.
Since there are so many new options, we want to talk about three of the most popular stock trading and investment apps, and help you consider options for portfolio management. Let’s jump in!
WHAT ARE THE BEST INVESTING APPS FOR BEGINNERS?
Like we said, there are tons of options for investing these days. Which you choose is just as important as knowing how to invest in the first place. Here are some of our top picks!
Acorns is a new app that lets people invest, save, and set financial goals. It’s one of the best investing apps for beginners because Acorns collects your spare change and stores it in an account for the purpose you set, whether it’s saving or investing.
Acorns can round up purchases you make to the next dollar and invest the change—and you can make additional small monthly contributions if you like. It’s automated, so you don’t have to think about making transactions. Acorns uses a variety of index funds for investments, which are all curated by Vanguard or other financial professionals.
The difference between Acorns and other apps is that while yes, you can choose your settings and are in control of your money, a lot of the complicated decisions are automated by professionals so you don’t have to worry so much about making bad stock purchases. Your money is in good hands! Plans start at $1, $3, and $5 per month, so this is an easy, affordable option for new investors and young people who are still building wealth. Learn more about their investment options on the Acorns website!
Robinhood is another newer investment app that small investors and day traders love to use. It’s essentially another service where you can buy stocks, somewhat like the more classic Etrade or Fidelity. But Robinhood allows smaller purchases and doesn’t charge as many commission fees, which other trading platforms charge every time you buy or sell a stock on the stock market.
This app doesn’t make choices for you, so you do need to have some idea of which funds or stocks you’d like to buy, and some previous knowledge of the stock market. But it does offer a library of resources where you can learn more about investing and finance.
It’s worth mentioning that many users and even some U.S. Congress members were upset when Robinhood cut off trading to prevent people from buying Gamestop stock when prices were soaring, because they wanted to limit the effect small investors were having on the market. They have since reversed the decision and have made no other similar choices at the time of this writing.
Republic is a completely different platform than the others. Republic actually allows the public to make investments in startups and small companies to help them grow and develop, instead of focusing on trading.
It’s sort of like crowdfunding, but instead of just giving donations, investors can make a profit if they support companies that continue to grow and make more revenue. According to their website, “Until May 16, 2016, essentially only the wealthiest 3% could invest directly in private startups.” We love that Republic is changing the game and allowing everyday people to support companies they love and provide important revenue for growing businesses. And there’s no monthly fee! You could think of this as micro-investing.
It does require research and smart decisions, because like choosing a fundraiser, you’re giving to individual corporations and not, for example, purchasing a diverse index fund of many different stocks. However, Republic has strict fundraising guidelines that follow legal requirements and they do offer lots of learning material that can help you choose.
This is a great option for driven individuals who want to invest in companies they care about and make a profit by doing so, while being comfortable with a fair amount of risk.
When you’re just starting to invest or learning about trading, it can feel overwhelming and it’s hard to know where to start. We get it! That’s why we didn’t list, say, the best 10 investment apps. We feel these three are a solid choice that offer a wide variety of options for newer and more seasoned investors.
Whether you have spare change to begin squirreling away or want to “get in early” on a company you really care about, there are modern options that make investing easier, and much more accessible, than it was in years past. Get out there, and good luck!