Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. [youmaylike] What are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks. View fees and expenses related to investment choices. Invest funds on the go, and even automate regular contributions. Automatically reinvest earnings on current investments. Adjust portfolio for personal risk tolerance. View performance projections. Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions. The best part? Investing through trusted apps is usually cheaper and faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you upfront how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning investment requirement: At least $5 to start Types of investments available: ETFs (exchange-traded funds) Portfolio options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic investing?: Yes Automatic reinvesting?: Yes Automatic rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. Great for Truly Free Investing: Robinhood Fees and expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning investment requirement: You’ll need $2,000 to get started. Types of investments available: ETFs, stocks, cryptocurrency and options. Portfolio options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic investing: No. Automatic reinvesting: No. Automatic rebalancing: Yes. A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning investment requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of investments available: ETFs (exchange-traded funds) and fractional stock shares Portfolio options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic investing: Yes. Automatic reinvesting: No. Automatic rebalancing: No. The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and expenses: 0.25% annually. Beginning investment requirement: $500 minimum initial investment. Types of investments available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans and trusts. Portfolio options: 11 asset classes to choose from, including natural resources and real estate. Automatic investing: Yes. Automatic reinvesting: Yes. Automatic rebalancing: Yes. Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee. Beginning investment requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading). Types of investments available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex and cryptocurrency. Portfolio options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your passions, preferences and tolerances. Automatic investing: Yes, with EP. Automatic reinvesting: Yes. Automatic rebalancing: Yes. A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!
How to Improve Your Credit Score
Unless you’re independently wealthy or have a generous benefactor on speed-dial, the concept of how to improve your credit score is important.
A lousy credit score can impact your life in some significant ways. You’ll pay more for loans with a poor credit score, of course, assuming you can even get credit at all. Once you pass a certain point, no reputable lender wants to deal with you. That means no car loans, or a credit card. And you can kiss your dreams of owning a home good-bye.
There are other less obvious ways your credit score can impact your well-being, too. If you move to a new state, utility companies will often require a big upfront deposit to hook up services, something that you can easily get waived if you have good credit. This could add thousands to an already expensive move. The best cell phone plans are reserved for folks with good credit as well.
Many people with credit issues are often forced to pay more for insurance as well, since insurers are convinced poor credit can easily leech into other parts of your life.
Needless to say, it is important to keep your credit score strong. It’ll save you money and generally make your life easier. But what if that ship has already sailed, and you’ve made some mistakes that have impacted your score?
Don’t sweat it. Here are some easy ways you can improve your credit score.
The Importance of Knowing Your Score
Keeping an eye on your credit score is important, and not just so you can save money the next time you get a loan.
The most important reason to monitor your credit score is to guard against identify theft. Various companies have access to your personal information, and some of them likely aren’t storing it very securely. Hackers can steal some of your vital data and use it to fraudulently take out credit in your name.
Creditors aren’t the only people who are checking your score. Besides Googling you or checking out your Facebook profile, many companies will spend the cash to get access to your credit report. Some employers swear by this strategy, citing a link between poor credit and lackluster job performance. Imagine losing out on your dream job because of an unpaid bill five years ago.
Another reason to keep an eye on your score is to make sure you’re not accidentally sabotaging yourself. Credit scores are complicated; staying on top of yours will be worth the effort the next time you apply for a loan.
Saying that, however, most folks don’t keep a close eye on their credit score, and it doesn’t really affect them. While I ultimately recommend keeping an eye on yours, there’s really no reason to get too excited unless you’re actively trying to improve it.
What Influences Your Score
The exact formula that is used to determine your credit score is a tightly guarded secret of the Equifax Corporation. But we do know some general factors that will affect your score.
The first, and most obvious factor that impacts your credit score is whether you’ve paid your bills. If you’re late on a credit card payment even once, it will hurt your credit. You’ll start to see a serious impact on your score if you’re late multiple times, with it really tanking if you’re behind more than a month or two.
Another thing that influences your credit score is the number of credit accounts you have open. You won’t get penalized if you have a few different sources of credit, but anything more than 3-4 and the algorithm will begin to think you have a credit addiction, deducting points from your score accordingly.
A third factor that will impact your credit score is something called credit utilization ratio. This measures how much of your available credit you’ve used up. If you have two credit cards with a combined $20,000 limit and you currently owe $19,500, that will negatively impact your score. On the other hand, you’ll be rewarded for a lower utilization ratio.
Another thing that can damage your credit score is applying for credit. If you apply once a year or so, don’t sweat it; it won’t impact your score that much. But, if you’re shopping for a loan and end up with five inquiries on your report in just a month or two, that can push your score down. To further complicate things, some folks looking at your credit will do a soft pull (which doesn’t affect your score), while others will do a hard pull (which does).
Finally, your credit score will be affected by how long you’ve had the same credit lines open. If you’ve had the same credit card for a decade without issue, for example, that will help keep your score high.
How to Improve Your Score
Now that we know what goes into your credit report, improving your score is a relatively straightforward exercise. Just do what the credit monitoring company wants.
We know that paying our bills on time is important. Make sure you do that, even if you can’t afford to pay the entire balance of your credit card bill off all at once. The only real downside to this strategy is it takes time, especially if your credit is especially bruised.
Another way to boost your score is to improve your credit utilization ratio. The best way to do this is to pay down your debt, of course. But some people prefer a sneakier way, which is to simply apply for more credit. In certain situations, getting another credit card and transferring some of your debt onto it can improve your credit score. However, this is not a recommended strategy, as it will not solve your credit issues, and it has no long-term benefit.
If you’re planning to drop an unused credit card that you’ve had for a while, I’d suggest holding off. The better solution would be to hang on to that card and use it sparingly, which will keep its positive influence on your credit report.
If your credit score is close to the line of not being able to qualify for the best mortgage rate, be wary of applying for too many loans. Perhaps it’s best to use a mortgage broker in this situation, a person who can use the same credit report for multiple lenders.
The Bottom Line
The overriding thing to remember is this: some of these moves will improve your credit score over the near-term, but the best long-term strategy is to budget wisely and pay your bills on time. This will take time if your score is weak today, but it’s the best way to build a sustainable good credit score.