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!
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Most people are aware of how to make a personal budget. You tally all your sources of income, and then plan your expenses accordingly. It’s not a very complicated endeavor.
A business budget, though, is much more difficult. Figuring out personal needs and wants are easier than figuring out the same for your business. It becomes more complicated when you try to determine how much a business should invest for the future, and how to weigh this against current needs.
This is an important aspect of a business plan, so let’s take a closer look at how you can build a budget to ensure your business thrives for years to come.
Understanding the Basics
What exactly is a business budget, anyway?
Simply put, a business budget is a blueprint of your business’s finances. Depending on what type of business you’re in, this budget could be very simple or immensely complicated.
Many folks start out with a home-based business. These new ventures are attractive because they don’t need much in start-up capital, nor do they require big operating expenses. Some of these businesses don’t cost their owners a nickel in start-up costs.
The one problem is these home-based businesses don’t tend to scale very well. You’re limited to your own output, which means upside is limited. To really achieve growth, a business owner will need to expand to a new location, hire employees, advertise and incur other expenses. This is when things get much more complicated.
Items to Include in a Business Budget
The first step toward establishing a business budget is figuring out how much your revenue will be.
This is easier said than done, especially if you’re planning a brand-new business versus expanding on an existing one. It’s best to be conservative here. Many potential businesses have failed because their owner ran out of money before the concept took off.
One thing business owners struggle with is pricing their product. Many think there’s a viable business opportunity undercutting the competition, but I’d argue against it. Yes, some successful businesses do just that, but many fail trying that strategy, because they underestimate their own expenses.
The next step is looking at expenses. There are two types of expenses: fixed and variable. Fixed expenses are going to be the same every month, while variable expenses will go up and down depending on how much success the business has.
The biggest fixed expense for most businesses is real estate. It usually makes sense for a business to rent its space — at least to begin with — to limit the amount of capital the owners must provide. It’s much cheaper to rent a $1,000 per month space than it is to shell out $200,000 for the same building.
These fixed expenses don’t just stop at rent. You’ll have to pay to keep the lights on, and other utilities like phone and internet access aren’t free either. Any employees you hire will be a fixed expense too. Yes, you can always get rid of staff, but you don’t want to do that after a bad month or two. Firing a qualified staffer should be a last resort, especially after spending money to train them.
Other fixed expenses might include the cost of leasing equipment, payments on any loans the business has, and the cost of raw materials.
Variable expenses including advertising, promotional giveaways, investing in additional training for staff, donations or gifts to various organizations, and anything else that might better belong in the “wants" category rather than the “needs" category.
Once you have an accurate picture of your revenue and expenses, it’s time to put everything together. Remember to build in a healthy profit margin — after all, that’s why you’re in business — or at least a plan to get there if you’re comfortable taking less profit at first.
Finally, don’t forget about start-up costs. You’ll likely have to pay for some machinery, put a security deposit down on a rental property to house the business, buy office furniture and do a bunch of other little things. These costs add up. Make sure there’s ample start-up capital to account for all these expenses, plus extra just in case profitability doesn’t come quickly.
How to Save Money
Much like personal budgeting, having a good business budget is all about the details. Every item in the budget must be scrutinized to really justify the expense.
Say you’re opening a restaurant, and two different locations are available. The first is your dream restaurant, a turn-key operation that can seat 150 patrons. Everything is brand new, but you’re paying $10,000 per month for the location.
Compare that to a much smaller location that’s a little rough around the edges. This location needs a little work to bring out its full potential and can only seat 40 people, but the rent is a mere $1,500 per month.
Every entrepreneur dreams big. They want to own a high-class restaurant, so taking the first option is ideal. But a prudent business owner would start out with the second location, saving money while perfecting their craft. Then, once the concept is proven to work and there’s a bunch of cash in the bank, move to a larger location.
This type of behavior can be applied to other business expenses. Giving out coupons is a cheaper way to market your business versus buying expensive radio or television advertising. A normal business doesn’t need the top of the line internet package. Independent contractors can be hired over full-time employees.
Before authorizing any expense, ask yourself if this will directly add to the bottom line. If the answer is no, then save that money for something that offers a better return on investment.
The Bottom Line
Even opening a small business can be incredibly tough. It requires an entrepreneur to wear many different hats. You must be competent at expense control, marketing, human resources, and a dozen other things, never mind doing the work required by the business itself.
Setting up a good business budget can help take the guesswork out of buying decisions, leaving that mental energy free for other parts of the business; there’s already enough to worry about.