4 Investing Apps That Millennials Would Love
Technology is becoming a staple in the majority of American households. A Pew Research study from 2013 says that 70% of Americans have broadband internet connection in their home (http://www.pewinternet.org/fact-sheets/broadband-technology-fact-sheet/). What does that mean for you? It means that the capabilities of tech within households are reaching interesting heights. With this kind of internet adoption, a company can hit a small percentage and still make a healthy revenue number (making innovation more appealing to startups).
Want a different kind of investing experience? These four apps have completely different styles. Below I've covered a few FinTech companies that have popped up over the last few years.
Each of these companies will have a different "feel" and will be incredibly useful for different types of personalities, however, a lot of people use two or three of them simultaneously to reach their financial goals.
If you're a long-term investor looking for simplicity
Betterment is what the financial industry is calling a "robo-advisor". Don't let the term confuse you, it is simply an asset allocator that helps you trade and rebalance your investments within your personal risk tolerance preference.
The best thing about Betterment is the price. For what some investment managers are charging near 1% for passive asset management, Betterment charges a tiered pricing that starts at 0.35% per year and there aren't any investable asset minimums that you may find at a reputable investment manager (sometimes as high as $1 million).
One of my favorite features of Betterment is the "Smart Deposit" technology where you set how much money you want in your bank account at all times and it will go in and auto-deposit the excess into your investment portfolio. This keeps you from losing a lot of buying power due to inflation from cash in excess of your emergency funds and comfortable checking account levels. It also allows you to use a different alternative to dollar-cost-averaging by time intervals.
(Disclosure: We use Betterment at Ignite to do our backend office work in order to offer our clients the best experience possible.)
If you're looking to invest money "on accident"
Acorns is a really ingenious way to help younger generations get started with investing. It uses the same kind of technology to automate your invest as Betterment. While it doesn't have all of the bells and whistles, it does a really handy feature that I'll call "Round-up".
The "Roundup" features take any purchase that you make on your linked account and rounds it up to the nearest dollar. Depositing the difference into your Acorns account. Once your account has a balance of $5, Acorns will invest it into a portfolio that is consistent with your investment time-horizon and your goals for the invested money.
Recently Acorns has announced another feature called "Found Money" which allows companies to invest in your account. Instead of getting cash back from their approved partners, the companies contribute money towards your Acorns account. This is a great way to grow your invested assets without making an effort, and plays up the caption of "investing money 'on accident'".
If you're looking to make investing fun
I first heard about Kapitall just a few weeks ago. A brainchild of a few people, one of which was a veteran of the gaming industry, and you'll exactly why it's on this list. A quick tour of the website and you will quickly notice how they have "gamified" the investment process. Making it not only easy to invest and learn about investing, but to also ENJOY learning and investing.
One aspect of the gamifying process is that you can make extra purchases from Koins that you earn by using the app. You can take "Quests" that is the educational component of the platform, earning you Koins, badges, and points for later use. Another option is to compete in the "Master's Tournament" where users compete for real dollars using a virtual investment account.
If you're looking to invest based on your beliefs
Motif investing is a great service for investors that are concerned with Socially Responsible Investing (SRI), but it is also amazing for people who want to invest in a sector ( or a special group of stocks). A motif is a basket of stocks (from 1-30 stocks per basket) that you can trade in and out of. The best part about building and investing in a motif is that you are charged $10 for each buy and sell actions within your "basket". Meaning you can effectively trade 30 stocks for $10...if you were going to use it this way.
Another great feature is Motif's ability to allow motif creators to make money off of their motifs. Dubbed the "Creator Royalty Program" if someone uses or buys your motif you are paid a royalty for helping another user invest wisely. Have a knack for trading your own investment account? This could be where you put it to the test and also use the social networking features to interact with friends and colleagues across the Motif platform.
A new service called Motif Blue has recently been announced. Motif Blue is a subscription-based service that will allow access to features such as commission-free trading, automated investing, and real-time quotes on stocks. It's definitely worth looking into if you're looking to participate in a lot of trading of motifs and planning to also utilize automation in your investments.
What investing apps do you use to grow your wealth?