4 Radically Simple Places to Invest Your Money
Knowing how to invest in the financial markets can be confusing, because there isn’t a one-size-fits-all solution. To help, Money Girl reveals her favorite radically simple and innovative places to invest money right now – no matter if you have lots to spare, or can only afford to set aside a few dollars each month.
Knowing how to invest money in the financial markets can be confusing because there isn’t a one-size-fits-all solution.
Buy Now
Everyone’s financial situation is different. We all have different goals, amounts to invest, tolerance for risk, and knowledge about investing.
But before you get to how to invest, you need to choose a place to actually open your investing account. In this episode I’ll give you my favorite radically simple and innovative places to invest money right now.
You can use these recommendations no matter if you have lots of extra money to invest, or can only afford to set aside a few dollars each month.
Click here to sign up for the Money Girl Newsletter for exclusive tips—it’s FREE!
4 Radically Simple Places to Invest Your Money
If you’re fortunate enough to have a retirement plan at work, such as a 401k or 403b, your employer is in charge of it. That means you’re stuck with the brokerage and plan they choose.
Although you’re not in control, this is still the first place you should invest, when possible. That’s because it comes with terrific tax advantages and perhaps employer matching, to boot.
But when you don’t have access to a workplace plan, or you’re maxed out and still have extra to set aside, you need other places to invest your money.
There are many great investment firms and brokerages. Some of the biggest and well-known companies are Vanguard, Fidelity, and Charles Schwab. But just because a firm tops the charts doesn’t necessarily mean that it’s right for you – especially if you don’t use it.
Here are 4 radically simple places to make your money grow:
Place #1: Acorns
Acorns is a free mobile app, which will also be a web-based application soon. It’s like nothing you’ve ever seen, because it allows you to automatically invest your digital spare change.
What’s digital spare change? Well, you give Acorns permission to round up your purchases on debit or credit cards and then invest the difference by automatically pulling it out of your bank checking account.
For instance, let’s say you link up a credit card and charge $12.25, Acorns would round up to $13.00 and know that you need to invest the difference of $0.75. Once you’ve accumulated at least $5 in total spare change, Acorns automatically takes it out of your checking account and invests it.
You can link up as many debit and credit cards as you like. Then you pick one of Acorn’s 5 investment portfolios, ranging from conservative to aggressive. Each one is made up of 6 exchange-traded funds (ETFs) selected to achieve the portfolio objective.
To get started investing with Acorns, all you need is $5. Then they charge $1 per month for balances under $5,000 or 0.25% per year for balances over $5,000.
I’ve been using Acorns for several months and my virtual spare change totals about $40 a month. According to their calculator, if I maintain a moderate portfolio for 20 years, my change will be worth over $20,000.
That’s certainly not enough to retire on, but it’s a terrific reward for using a free app, and an easy way to set aside a little over a dollar a day for the future, without even thinking about it.
I don’t recommend that you only use Acorns to invest. However, if you’re struggling to get started, it’s an incredibly easy and painless option! And even if you’re already a pro at saving and investing, using the Acorns app is actually fun.
See also: How Much Money Do You Need to Retire?
Place #2: Betterment
If you’ve been a long-time Money Girl reader or podcast listener, you know that Betterment is a frequent sponsor. But what you may not know is that I became a customer and a huge Betterment fan several years earlier.
Betterment’s founder, Jon Stein, and his great team have built an easy and efficient way to invest for any goal. It’s a one-stop shop where you can open a regular investing account or an IRA, including a rollover from an old workplace retirement plan.
See also: 10 IRA Facts Everyone Should Know
It takes less than 5 minutes to set up a Betterment account, and you can get started for as little as $100. Their fees depend on your account balance, but as long as you have an automatic monthly deposit set up, it won’t be more than 0.35% per year.
To pick your portfolio, Betterment gives you simple slider to indicate how you feel about investment risk. Then your money is automatically allocated across a suitable portfolio of low-cost ETFs that are right for you, no matter if you’re very conservative or aggressive.
What I really like about Betterment is that each investment objective starts with a goal where you identity what you’re saving for—such as retirement, a home, or a vacation—and when you want to achieve it. Then they make recommendations to help you get there.
You can set up automatic transfers so you get in the habit of investing on a regular basis. Betterment also has a great mobile app, so you can keep up with your investing progress on the go.
Aspiration launched in late 2014 with the goal of bringing middle class investors sophisticated products that were previously only available to investors with super-high net worth.
Place #3: Aspiration
One of the most unusual ways to invest is through a new company called Aspiration. They launched in late 2014 with the goal of bringing middle class investors sophisticated products that were previously only available to investors with super-high net worth.
Their first product, the Aspiration Flagship Fund, is a blend of mutual funds designed to grow your money over the long term, while also limiting volatility along the way. It uses a variety of advanced strategies to try to make money no matter if the stock market is moving up or heading down. It also watches global trends and corporate moves, in order to make profits.
You need $500 to get started with Aspiration, but unlike most firms, they also have a maximum investment of $100,000 – so they stay focused on everyday investors. They don’t have any retirement account options right now – just a regular taxable account.
Something else that’s different about Aspiration is that instead of charging a flat fee to mange your money, they charge a “pay what is fair” fee schedule. You actually get to decide what to pay them—even zero!
Aspiration believes that letting you decide what to pay helps build trust with customers. And if that weren’t generous enough, they also give away 10% of their revenue to charities in the U.S.
Place #4: FutureAdvisor
The place(s) you choose to invest money will affect your customer experience, investment options, amount and quality of advice you can get, and fees you have to pay.
FutureAdvisor is an online investment advisor that manages investments you already own, or new ones that you purchase through them, such as regular brokerage account or an IRA.
Their goal is to provide quality financial advice to ordinary Americans. They offer complete, top tier portfolio management based on unbiased advice, diversification, tax-efficiency, and low-cost index funds.
Think of FutureAdvisor as a management layer you add over your existing accounts to help you maximize return. They use computer modeling to analyze your investments, and then recommend the best way to allocate your money.
They work through 2 well-known brokerage houses: Fidelity and TD Ameritrade. So if you have accounts at other places, FutureAdvisor does the paperwork to consolidate your investments there. You’ll pay a 0.5% annual fee for the investments they manage.
The Best Place to Invest Money
The place(s) you choose to invest money will affect your customer experience, investment options, amount and quality of advice you can get, and fees you have to pay.
You’re not limited to one type of investing account or service. For instance, you could have a retirement plan at work, open up an IRA with Betterment or FutureAdvisor, and have a regular investing account through Acorns or Aspiration.
You can max out both a retirement plan at work and an IRA every year. However, depending on your income, you might not get 100% of the tax benefit for an IRA when you or your spouse also have a retirement plan at work.
But no matter your situation, you can always invest any amount of money in a taxable investing account, in addition to what you contribute to a tax-advantaged retirement account.
As I mentioned, these recommendations are just a few of the many places to invest. But I hope they give you some ideas and inspiration about how simple investing really can be!
So get started by doing some research, and using at least one of them to achieve your short- or long-term financial goals this year.
More Money Resources
Should You Contribute to Both a 401k and An IRA?
A Checklist to Measure Your Personal Finance Success
Investment Tips: How and Where to Invest (the Easy Way!)
3 Money Mindset Tips and Tools for Surefire Financial Success
Get More Money Girl!
Get More Money Girl!Want to know the best financial and productivity tools that I use and recommend to save time and money? Click here to check out 25+ tools I recommend!
To connect on social media, you’ll find Money Girl on Facebook, Twitter, Pinterest, and Google+, or email me at money@quickanddirtytips.comcreate new email“>money@quickanddirtytips.comcreate new email. And click here to sign up for the free Money Girl Newsletter!
Also, if you’re not already subscribed to the Money Girl podcast on iTunes or on the Stitcher app, both are free and make sure that you’ll get each new weekly episode as soon as it’s published on the web. There’s a huge archive of past articles and podcasts if you type in what you want to learn about in the search bar at the top of the page.
Download FREE chapters of Money Girl’s Smart Moves to Grow Rich
To learn about how to get out of debt, save money, and build wealth, get a copy of my award-winning book Money Girl’s Smart Moves to Grow Rich. It tells you what you need to know about money without bogging you down with what you don’t. It’s available at your favorite bookstore as a paperback or e-book. Click here to download 2 FREE book chapters now!
Man Rising Coins image courtesy of Shutterstock
About the Author
Laura Adams received an MBA from the University of Florida. She’s an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura’s previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.
