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!
Be Aware of All the Expenses
Buying a house is getting more expensive with every passing year. In fact, the average millennial today faces housing prices 39% higher than their parents did in the 1980s, according to Business Insider. To add fuel to this fire, young people face a ceaseless student loan debt burden that millennials cite as the largest single obstacle to home ownership.
In such a challenging economic environment, it’s important to know exactly what you’re getting into when you choose to buy a house. Down payments on a mortgage are just the beginning of the expenses of buying, preparing and maintaining a new home. After that’s all dealt with, you’ll still have a laundry list of expenses you’ll want to have covered before surprise expenses start to wear you down.
Mortgage Rate
The first financial obstacle you’ll have to overcome is getting a mortgage. Your mortgage will make home ownership possible, but it will come with long-term costs that you’ll need to keep up with.
Your mortgage is probably the largest financial decision you’ll ever make, so it’s important to keep a level head while you approach one. The typical bank or lender will cover 80% of the cost of a new home, and you’ll pay it back over time with interest.
The interest rates on a mortgage are either fixed-rate or come with adjustable interest rates. In most cases, mortgages will require you to pay the same amount of money on a monthly basis. Mortgages are typically amortized, meaning that the ratio of interest to principal (the money you borrowed) will change as you pay back your loan. Each month you pay back a piece of your mortgage, this ratio will change.
Mortgage Payment Calculator
When you apply for a mortgage, your lender will come up with an amortization formula that will be used to form your payment schedule. The life (length) of your loan also plays a part in how much you’ll have to pay every month. Each month you pay back a piece of your mortgage, the ratio of interest to principal will change.
If your mortgage is fully amortized, you’ll have to make payments as scheduled until the life of your mortgage comes to its end.
If your mortgage is a fixed-rate one, every amortized payment is the same amount.
If your mortgage is an adjustable rate one, the fully amortized payment changes with every change to the interest rate on your loan.
In the end, a loan with a longer life translates into a lower monthly rate that will be paid off over a longer period of time. This comes with a downside, as the longer your mortgage goes without being paid off in full, the more you end up spending on interest.
After these more technical aspects of a mortgage have been covered, you’ll want to consider all the other expenses that come with buying a house.
Down Payment
The first major expense you’ll have to cover on the long road to paying for a house is the down payment. As mentioned, a bank or other lender will typically cover 80% of the cost of buying a home. They will require you to make a down payment of 20% immediately, and you’ll pay the rest off over time as per your arrangement with the lender.
20% is the golden standard for a down payment, though this figure can vary for a variety of reasons. The more you pay on your down payment, the less you’ll have to pay moving forward, and the less you’ll lose to interest in the long run. For these reasons, it is ideal to pay more upfront, when possible.
Insurance
Insurance is a major expense that varies widely depending on your location and what you need to be covered. Home insurance can be a complex subject and is broken down in many ways. The most important home insurance is coverage for the structure of your home.
Coverage on the structure of your home can be further broken down into a myriad of disasters that can damage your house’s structural integrity. These costs vary based on location, but you should make sure you’re covered for the most likely disasters to affect you in the very least. If you’re buying a home in certain parts of the American Southeast, be sure to consider flooding and hurricanes. If you’re buying a home in California, be sure to consider wildfires.
In any case, fire, flooding, lightning and routine wear-and-tear should be included in a good home insurance policy. To forgo on these factors could cause serious financial trouble down the road.
If you feel it necessary, you can also get coverage for personal belongings (highly recommended). Another common addition to home insurance is liability protection. With liability protection, you get coverage for lawsuits over bodily harm or property damage that you or a family member have been found to have caused someone else.
Lawyer Fees and Health Inspections
Don’t forget about the lawyer fees! These won’t add up to much compared to your other expenses, but you’re looking at anywhere from $1,000 to $2,000 altogether. These lawyer fees should cover registration for the mortgage, a tax certificate and a title search on the property.
Property Taxes
Property taxes vary by locality, but you will have to pay an annual rate for owning the property. This rate depends on what municipality or county your property resides in, the size of the property and several other variables.
Furnishing Your Home
This is a completely subjective expense, but you’ll want to consider it ahead of time. If you want a well-furnished home, you should set aside at least $20,000 for it. The average cost for furnishing a studio apartment in the United States with all the essentials is $3,000 (and this is for the cheapest unused furniture available), according to Furnishr.
Optimizing Your Future Passive Expenses
Lastly, you’ll want to consider how you can optimize the bills you’ll be paying for the property. This is where you can save some real money with creativity.
For starters, good insulation will save you some serious money on climate control. Many architects are interested in designing homes so they receive more sunlight during the winter and less during the summer. For you, the buyer, there are also countless ways to minimize the passive spending that will come once you’ve moved in.
Yes, this is all a pain to think about, but dealing with these factors in advance will save you a world of heartache and trouble in the future.