These 10 Companies Will Help Put Your Money to Work
It’s hard to save money and start investing when you don’t have much (or any) money to begin with. That’s one of the biggest issues facing millions of would-be investors these days. They simply lack a small sum with which to start. Even if you do end up scraping some money together with hopes of investing it, things can go wrong fast. A medical emergency or unforeseen car repair could sap that money away before you even know what happened.
But technology is giving us more options. Even if you don’t have much to start with, investing is now an option for just about everyone. There are fee-free trading platforms and apps that will automatically take your pocket change and throw it into predetermined investments for you. In fact, you can start today and take a completely hands-off approach.
So, if you’re ready to try it out, where should you start? There are numerous platforms out there, each with its own unique rules, fees, and approaches.
We’ll start off our list with six platforms that were named the “best online brokers for small investors and beginners 2017,” released by personal finance blog Get Rich Slowly. Its list includes a few established names and some relative newcomers that are worth checking out. There are some notable platforms left off the list, too.
As for the remaining four, we’ll highlight some newer platforms that, in some cases, offer commission-free trades and other unique ways to start investing. You don’t need to be rich to get started. And that’s the whole point. Here are 10 platforms you should check out if you’re new to investing or want to start building wealth with your pocket change.
Betterment is one of the faster-growing platforms out there right now. And one of the perks is the Betterment team does some automatic investing for you. After your account has money in it (and you’ve established some preferences), Betterment will invest your money in ETFs (exchange traded funds), all with no trade or transfer fees. There is a small annual fee — from 0.25% to 0.5% — and you can start having annual or unlimited pow-wows with experts once you hit a minimum balance threshold.
“This broker provides a unique combination of investment and trading tools and services, along with some of the lowest trading fees in the industry and generally no required account minimums,” Get Rich Slowly’s report says of TradeKing. The company ‘s been around for more than a decade now, and it has options that allow you to do your own investing or use tools to get help. There also are features that can connect you to expert help on the fly.
You’re likely familiar with Scottrade. It’s been an established name in the investments industry for some time now and has offices all over the country. As Get Rich Slowly says, its model is basically a hybrid. “Scottrade is for investors who want to be able to invest in individual stocks with an online discount broker but have many of the same benefits you’d get working with a full-service broker,” the report says. It’s not as cheap as some of the others, but it’s a worthy choice nonetheless.
4. TD Ameritrade
“A leader in the industry, TD Ameritrade offers a wide array of investments that are suitable for new and experienced investors alike,” Get Rich Slowly writes. “This broker is better suited for long-term investors than to active traders.” So, depending on your strategy starting out, TD Ameritrade might not be the best option for you. If you plan to sock away money and forget about it, check out the company’s platform. There’s also no initial minimum deposit — a big plus for those with little capital.
5. Motif Investing
Motif Investing is one of the newfangled investing startups that’s starting to make a splash. It also takes a different approach to the whole investing game. “While it stands to be a powerful investing tool, Motif is not for beginners as “motifs” are groupings of stocks that are based on a single idea. Users can trade stocks and ETFs in bundles of up to 30, each based on the specific theme, idea, sector, industry or trend,” Get Rich Slowly’s team says. There is a paid subscription model, too. If you think auto-investing is up your alley, check out Motif.
6. Charles Schwab
If you’ve done any kind of research at all, you should be familiar with the Charles Schwab name. “Charles Schwab offers a lower fee for online equity trades compared to its major competitors. It also offers a Satisfaction Guarantee where investors will have eligible fees refunded if they are not satisfied,” Get Rich Slowly’s report says. Also a perk is there are no fees to open an account. And there are opportunities to avoid fees with certain account types.
Now that we’re outside of the Get Rich Slowly report, we’ll highlight some other platforms that are making waves. First up is Robinhood. Robinhood has an app you can download and start buying stocks right away. The biggest advantage? Commission-free trades. That means you can load money into your account and buy stocks without paying a fee. It’s great if you want to experiment and if you’re naturally inclined to use a smartphone rather than a computer.
The concept behind Acorns is that planting something small — like an acorn — can lead to big things — like a towering tree. That is how you should hope your investments eventually turn out. Another app-based platform, Acorns works in a unique way: It invests your spare change automatically. You connect your accounts, and when you make a purchase, your total will round up to the nearest dollar amount. Acorns takes that extra change and invests it. It’s an interesting concept but perhaps not for everyone.
If you’re feeling particularly Marxy, you can check out Kapitall. It was actually designed with video games in mind, with a unique interface that allows you to trade and build portfolios. It’s yet another investment startup that’s applying a unique twist to an old game. And for younger people, it might provide a clearer way of understanding investing. If you’re a visual learner, Kapitall is a great option.
You’ve heard of robo-advisers, and Wealthfront is one of them. Another relatively new and flashy investment startup, Wealthfront has a pretty alluring way of getting you to sign up: Your first $10,000 is managed for free. If you want a “set it and forget it” approach, Wealthfront definitely allows for that. You’ll need $500 to get started, though. But after that, it should be smooth sailing.