Micro-Investing Apps – The Real Deal
Millennials, who are now in their 20s and early 30s, are at the beginning of their journey toward long-term wealth building. These early years will shape how they invest for decades to come. How you invest in your 20s and early 30s will play a significant role in how much wealth you can accumulate and pass on to your heirs.
Micro-Investing aims to foster wealth over decades rather than days, weeks or months. I call this the art of long-term compounding. On this journey, you face different challenges and learn different lessons than most investors.
You’ve probably heard stories of older family members who were successful over a lifetime of investing. They made sacrifices and built sustainable wealth. Think of your grandparents who worked hard their whole lives.
These stories make you feel perfectly normal. And they make you feel justified in setting aside saving as a second priority in life.
Lucky for you, today there are new disruptive opportunities emerging right in front of you where your smartphone goes literally everywhere you go.
Acorns – Invest Spare Change
Wallet: Manage Your Money Like the Big Banks
Millennials are going to inherit a lot of money and influence in the years to come. Education is often cited as a primary reason for optimism in this generation’s ability to prosper and steer the economy in new and innovative directions.
In surveys, millennials are the generation most likely to have a college education, and they are very interested in starting businesses, which bodes well for innovative, new industry and startup ideas.
However, it’s well documented that many millennials have difficulty making sound financial decisions, actively investing in the stock market, and putting money into various savings and retirement vehicles. Instead, most millennials are frittering away their money on student loans, spending on consumerism, and participating – or at least starting – a family.
Qapital – Save Small, Live Large
If you're between the ages of 18 and 35, you've probably wondered what you should do with your money. You are part of the millennial generation, and your years of exponential job growth, 100% tuition coverage for college and riding the tech bubble are starting to fade into memory.
For lack of a better term, you are f**ked.
What you have now doesn't amount to a hill of beans and the only thing you can do is better prepare yourself for the time when the boomers start to retire. Otherwise, your youthful indiscretions will put a huge dent in your career and stop you from living it to the full. No party can last forever.
So consider Qapital. The brainchild of online financial services company Lincoln Labs' founder Brett King and his son, Sam, Qapital is an automated micro-investment app that changes the way people save for the future.
With Qapital, you can start building your retirement savings today — even if you have no savings of your own.
Motif – Create Your Own Investment Portfolios
Moving Up to Robo-Advisors with Zero or Very Low Investment Minimums
The Millennial generation is walking a more unconventional financial path than any before it. Instead of saving for retirement for the first time, they’re faced with saving for their kids’ college education, keeping a roof over their ailing parents’ heads, and saving for their own retirement. This is why the millennial generation has adopted a new approach to investing and how they invest their money. These younger investors are looking for a low-investment minimum investment strategy that can earn them money while also giving them a sense of accomplishment. For these reasons and more, micro-investing has been a major boon to the financial industry.
What is micro-investing? In the past, micro-investing wasn’t something that you could talk about without also talking about micro-loans. Micro-loans are offered to low-income entrepreneurs to finance all or part of a business idea and act as a stepping-stone to starting a small business. A microloan is a loan for a small business that has to be repaid in small installments. The microloan process allows the entrepreneur to choose between traditional bank loans and micro financing. Micro investing, in this context, also refers to small-dollar loans; however, as the name has grown, it has become a category of investments all its own.
Betterment is an online investment platform that allows you to build an investment portfolio without any prior knowledge or experience. They offer three varieties of accounts: traditional, Roth, and College.
Your college account is simple to set up, and you can get up to a 100 percent match on qualified contributions. This is the perfect way to start setting money aside for your child’s education and choosing your investment strategy for the long term. You can choose from a wide variety of investment packages and asset allocation, with the option of adding a lifetime dashboard so you can stay up to date with your investment.
Your traditional account gives you access to a variety of packages for retirement, with or without the Roth option. Your Roth account lets you choose between packages and asset allocation based on your short- and long-term goals.
Betterment offers low fees without any hidden fees, and they support you by providing investment advice, guidance, and help at every step. If you’re interested in getting started in micro-investing, Betterment is a perfect option that will help get you started with a low initial investment while learning the basic fundamentals of investing.
Wealthsimple – Investing on Auto Pilot
Apps that enable micro-investing have been around for a while but until recently it was only available to professional investors.
Micro-investing services are relatively new to the scene compared to traditional brokers, but they’re rapidly gaining popularity. Using these services, you can invest a small amount of money on autopilot.
Micro-investing services act as an online broker, allowing you to invest a small amount of money each month (or sometimes even weekly) into trading exchange-traded funds (ETFs). If you have money in your bank account, or you get paid the same day each month, or you get paid semi-monthly, you can set up your account to automatically deposit a set amount of money right into your micro-investing service.
When used properly, micro-investing can give you the ability to grow your money over the long term. It helps you avoid the temptation of spending your money.
WiseBanyan – The world’s first free financial advisor
WiseBanyan makes all of the financial planning calculators and educational tools available to all of its members for free. This includes retirement calculators, net worth calculators, budgeting tools, and more. These tools are specifically designed to help millennials prioritize their money in a way that’s both anti-spend and anti-save. WiseBanyan sets itself apart by teaching millennials how to invest, because many people believe that this generation is more interested in spending than investing.
Now, let’s talk you through a few of the reasons why WiseBanyan is a great investment app for Millennials.
WiseBanyan Is Focused on Education
To help Millennials overcome their hesitations about investing, WiseBanyan realized that they needed to focus on simple lessons and education. In fact, since they are so focused on education, their very first app was released in 2012, which was before the official launch of their robo-advisor. This was a deliberate decision, as they realized that they needed to be sure that they could provide a product that their target market found useful. The education focused platform is not only free, but also available on all devices.
Investment Brokerages with No- or Very Low-Account Minimums
As a millennial investor, you might be wondering what to do with your new-found knowledge about the stock market. Sure, you could continue on your own – passive index investing has likely served you well so far.
But you might also be interested in taking your knowledge and putting it into practical use. And you don’t necessarily have to go out and open a brokerage account, either. That’s because there are several no- or low-minimum brokerage services out there that are perfect for your needs. Although these services also charge fees, they’re often more acceptable to young people with small sums to invest.
Before going further, let’s make sure you know the difference between a brokerage and a broker. A brokerage is the company that allows you to buy and sell stocks. A broker will actually help you manage your portfolio. In most cases, that involves managing your risk strategies and asset allocation. A broker will typically charge you a monthly fee and a commission for trading shares and selling assets on your behalf.
With that clarification out of the way, let’s look at three low-cost brokerage services. Two of these options are popular with millennials. All three of these brokerage services have low-minimums and fees that may be more acceptable to millennial investors.
The TD Ameritrade rally is perfect for those who’ve decided to trade futures or stocks but are not sure how to go forward or for those who don’t like putting all their eggs in one basket.
This free live web stream of the TD Ameritrade rally can also act as an intro to real-time analysis of the market. If you’re new in the trading business, then you’ll appreciate the markets desk segment, which features top analysts that offer an insider’s perspective on the day’s markets.
By getting your hands dirty playing with a small amount of money during the webcast, you can gain confidence and make yourself a self-sufficient investor.
Yes, this micro-investing resource was created by a financial services company, but that doesn’t mean it isn’t worthy of your time and attention. If you’re looking for a micro-investing resource, you’ll probably have a hard time doing better than this.
Investing in Peer-to-Peer (P2P) Lending
The global investing industry is worth trillions of dollars and continues to grow every year. Investing comes in many flavors – from individual stocks and mutual funds to real estate and cryptocurrency – but this article will be focusing on the benefits of investing in peer-to-peer sites (P2P). While not the tried and true investment types that most typically think of, peer-to-peer sites can be a great option for those who want to take a small first step in investing.
Because of the benefit of compound interest and their low risk factor, small investments can really add up and grow over time, which is great for those looking to invest a small amount of their paycheck – or those looking to dipped their toe into the investing pool for the first time.
Or Prosper: Which is Best for Millennial Investors
Millennial consumers want to hear one thing above all else: “What’s in it for me?” It’s the driving question behind the Millennial mantra that “if it ain’t free, it ain’t for me.” Small wonder that the new “sharing economy” is so popular with Millennials. On-demand services like Uber, Postmates, and Airbnb give them all sorts of “convenience” by renting their couches and apartments out to complete strangers for hassle-free vacations.
The First “Micro-Investment” App
Before now, it was nearly impossible for most people to make a career of investing. At minimum, you had to commit thousands of dollars of capital in order to get started.
And if you were just getting started, it could easily be a huge risk to risk your life savings on something that you didn’t fully understand.
The growing success of fintech companies like moola and Digit is indicative of young people’s interest in saving and investing. They are telling a success story that seems to have been forgotten in the last few years: saving money, rewarding yourself with small bursts of freedom to do the things you love, and investing in assets that grow over time without requiring you to be a stock market genius offers real peace of mind over the long term.
Gen Y has a different take on the traditional retirement strategy. Rather than retiring after a decade of work and pushing off their need for gratification until age 65, they plan to work for 50 years or more. The only difference is that they plan to invest, not rely, and begin the journey to financial independence much sooner.
Digit – Save Money, Without Thinking About It
If you have a little bit of cash that you haven’t invested yet and want to make your savings grow, Digit is a good option. It’s a micro-investing app that doesn’t require any bank info to sign up …and it’s free!
In essence, Digit takes cues from the behavioral economics field and analyzes your checking account to predict how much you can afford to save. “You set up the account online, link it to your checking account, and teach Digit a little about your spending habits,” wrote The New York Times when they first covered the app back in 2014. “Digit audits and analyzes your account, then makes weekly transfers into your investment account.”
If you have a hard time saving money, Digit could let you make more than you expected. Their savings account, which is an FDIC- insured Barclay’s savings account, is as easy or as complex as you want it to be. You can make one-time deposits or set up automatic recurring transfers.