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!
In Need of Short-Term Financing?
If you are a business owner, or if you are thinking about becoming one, you’re likely aware that the financial hurdles can be daunting.
You may be especially aware that situations happen that can affect your cash flow. You may not need long-term financing, such as a loan. You may simply need something to bridge the financial gap, i.e. short-term financing.
Don’t fret if this is your situation. Business lines of credit (LOC) could help you tremendously.
This finance option is often used by those who are unable to qualify for a small business loan, or who simply don’t want to take on additional debt. This option is also useful for startups and owners who want to expand.
Here, we’ll go over the ins and outs of business LOCs.
We’ll:
- Define line of credit
- Explain how to qualify for an LOC
- Note how best to use an LOC
- Go over who provides LOCs
- Go over when they may not be the best option for you
- Address LOC pros and cons
The Business Owner’s Credit Card
A good way to think of business LOCs is think of them as credit cards. The way you charge purchases to your credit card is the same way you use LOCs. You have a maximum spending limit, and the only way to continue using it is to pay down your balance.
For LOCs, the amount of credit available to you is replenished once you pay off the balance. Therefore, you can reuse and repay at your leisure as long as you don’t miss payments. You must also be sure to not exceed the credit limit.
A plus is that you are typically only responsible for paying fees for an LOC when you tap it.
Business lines of credit are available for outfits of all sizes. Their sums can range from $10,000 to $100,000.
They can be secured and unsecured, however most are unsecured. They typically come with a variable interest rate.
Qualifying for an LOC
Before you get too excited about LOCs being an option, understand that you have to hit certain criteria to qualify.
While LOCs are not loans, the best way to get one is through a bank. Just like bank-issued loans, traditional LOC providers want specific information about you and your business.
Be prepared to provide documentation that shows your revenues. Providers want to see that you’re making money, and not losing it. If you have at least $25,000 in annual revenue, you’re on your way to getting approval.
If your LOC request is large — $100,000 or more — you may be asked to put up collateral. This includes the property where the business is located, if you own it. You may also be able to use your home if you own it.
Other documents you may have to provide include:
- Personal and business tax returns
- Bank account statements
- Business financial statements, such as profit-and-loss statements and your balance sheet
Startups may be required to have been in business for at least six months. Credit requirements vary, but be prepared to make improvements if your score is below 550. LOC providers look most favorably on prime borrowers who have credit scores of at least 620, or even 650.
Putting a Business Credit Line to Use
Getting approved for a business LOC can cause you to breathe a sigh of relief. That’s because there are many beneficial ways you can put it to work. They can be used to:
- Supplement you cash flow
- Expand, remodel or make improvements to your business
- Cover surprise expenses
- Buy new equipment, such as computers, or upgrade your systems
- Purchase inventory to meet seasonal demands
- Launch advertising and marketing campaigns
The Government Beauty Known as the SBA
As a business owner, you may gripe about a host of issues related to the government. However, there is a part of the government that you’ve likely found to be very useful — the Small Business Administration (SBA).
When it comes to LOCs, reviewing the options offered by the SBA should be on your to-do list. It backs unsecured revolving lines of credit that are offered by banks. It’s called the CAPLines program, and it helps business owners meet short-term and cyclical working-capital needs. It’s also ideal for business that are less than 5 years old.
There are four lines, so there’s something that fits almost all business needs. See the SBA’s site here for options that could suit you.
Traditional LOC providers
Big banks, as well as smaller banks like regionals, often provide LOCs. There are a slew of non-traditional financial outfits that offer them as well. Your choice depends on which you feel most comfortable with. The main difference between the two relates to their qualification requirements.
Bank of America and Wells Fargo are among the traditional banks that offer LOCs to businesses.
Bank of America’s LOC is secured by a blanket lin on your assets or a certificate of deposit. Its LOCs feature revolving loan terms with annual renewal, no cash advance fees and no interest charges until you use the funds.
To qualify, your business must be at least 2 years old, with you as the owner. It must be generating at least $250,000 in annual revenue.
Wells Fargo’s secured business LOC requires that you have a Wells Fargo savings or CD account to be used as collateral. Its LOC is offered up to 95% of the amount pledged as collateral.
While Wells Fargo does not impose an opening fee for its secured LOCs, it does charge a $50 annual fee. There is no cash advance fee unless you withdraw from an ATM or over the counter.
Avoiding the Traditional Banking Route
Also consider non-traditional financial outfits for LOC options. Some of the popular choices are Fundbox and StreetShares. Their attractiveness relates to their more lenient terms.
For example, Fundbox works with businesses that are just 3 months old. There is no minimum credit score requirement. Businesses with just $50,000 in revenue can qualify.
StreetShares requires a mere $25,000 in annual revenue. However, your maximum credit limit is limited to 20% of your annual business revenue.
Pros, Cons and Tips
Business LOCs can be saving graces for several reasons, including their flexibility. As long as you don’t miss your payments, you can reuse them as much as you need to meet a wide array of needs.
Bank of America points out that maintaining a line of credit in good standing may help build your business credit rating and position you for better loan terms if you seek future financing.
Be aware that business LOCs do carry risks — the biggest being to your own credit. If your business fails, you’ll still have to repay the LOC. If you structure your business as a sole proprietor outfit, you may be liable.
If you want to pursue a business LOC, be sure to speak to a professional, in addition to researching each financial institution’s offerings.