Investment apps and websites have become as ubiquitous as smartphones and laptops themselves — and with new smartwatches such as the recently unveiled Apple Watch, it won’t be long before timing trades becomes as easy as telling time.
When it comes to using this technology, there’s no question that millennials hold a decided advantage over older generations of investors. But unlike, say, a random collection of flashlight apps where just about anything will do, the world of finance-related apps requires illumination of a different kind.
“The biggest question to ask is, ‘What kind of investor do you want to be?'” says David Weliver, founding editor of Money Under 30, a personal finance and investment website for millennials. “Are you ever going to be interested in holding individual stocks in your portfolio, or do you just want to be able to set it and forget it?”
As for the overall appeal, “You are in control of the process,” says Kendrick Wakeman, CEO of FinMason, a financial education company. “Many advisors don’t realize this, but most people find talking to a financial advisor to be fraught with anxiety. Using an app online puts millennials in control of the process.”
The technologies themselves have myriad variables, from ease of use to effectiveness in helping users start investing with confidence — and sometimes have a little fun while they’re at it. Here’s a rundown of 10 investment apps and websites that cater to millennial investors.
Betterment. Founder Jon Stein’s site follows a straightforward path where you enter your age and one of five general investment goals (i.e., “build wealth” and “safety net”). It then invests the money in a combination of stocks and bonds: a fully diversified investment portfolio of 12 global asset classes. “Betterment is a great platform for young investors to get started,” Weliver says. “It has no minimum investment, and it’s easy to make small, monthly investments via direct deposit.” The Betterment app (available on iOS and Android) uses concise screenshots to show overall account balances and performance.
FinMason. This free service gives unbiased views of the investment world without selling any advice. “All we do is help investors to understand which advice is best for them,” Wakeman says. “It’s the central tenet of our existence.” FinMason uses simple bar graphs to convey portfolio comparison, in large part because of its own research. According to Wakeman, 82 percent of millennials “could not get comfortable” with a portfolio by looking at a pie chart. “After seeing our analysis, 73 percent of them became comfortable with a portfolio recommendation.”
Acorns. Your “spare change” from linked credit and debit card purchases is rounded up to the nearest dollar and invested in six different funds based on your risk tolerance. “Acorns provides a turnkey approach to investing, as it allows millennials to easily take tiny amounts of money from everyday purchases,” says Rahul Sethuram, co-founder and chief operating officer of social investing platform Tip’d Off. “This creates a more accessible and less stressful foray in the investing world.” The app charges $1 a month for accounts under $5,000 and 0.25 percent of your annual assets for accounts over $5,000.
Kapitall. Strike a blow for the gamers. It’s often been said that investing is a game, and Kapitall takes that analogy literally: One of the creators, Gaspard de Dreuzy, is video game entrepreneur. Trades are as simple as dragging and dropping a company’s icon into your live portfolio. In Kapitall, these icons replace the ticker symbols we’ve all seen whizzing by on financial TV channels. The app even gives you a $100,000 “practice portfolio” to play with. Commissions run $7.95.
Tip’d Off. Sethuram’s website is a financial Facebook of sorts; it will provide members with a social media-type platform that millennials will find familiar. Here, visitors can connect with a community of like-minded investors to learn the tricks of the trades, if you will. A news feed will also update users on other member’s trades, and the platform will link to all major brokerages. Tip’d Off also utilizes a “read-only” system, meaning nobody can place real trades from the site. Currently in beta, it has a waitlist of more than 5,000; the website is expected to fully launch in the early summer.
Robinhood. Millennials need not rob from the rich to get in on the action, though this app could make them feel like a million. This simple brokerage service — designed first for the mobile world — offers $0 trading and is geared for anyone just starting out in investing. “Brokerage and stock investment apps like Robinhood are bringing Uber-like simplicity to investing in specific stocks for millennials,” says Hart Lambur, co-founder of Openfolio. Robinhood makes money by accruing interest off customers’ noninvested cash balances.
Openfolio. Big bonus points to this app for landing ahead of the pack in the world of Apple Watch apps. Like Tip’d Off, Openfolio leverages the principles and power of social networks, though it isn’t a social media site. Launched in October as the first smartphone app of its kind, Openfolio creates a space where you observe the investment strategies of people you know and trust, while sharing your own. Portfolios are shared in terms of percentage allocations, not dollar amounts. Speaking of social media, Openfolio connects with Twitter and Facebook.
iQuantifi. The first virtual financial advisor to provide goal-based planning advice to millennials and young families, iQuantifi helps budget for milestones such as buying a home or a car, or retirement. It’s the brainchild of CEO Tom White, a financial advisor for close to 20 years. The site determines the action steps necessary to achieve your financial goals. You can try it in a free 30-day trial; after that, it’s subscription-based. Payments are $9.95 a month, or you can sign up annually for $89. Goals are easily set, using symbols that stand for categories such as “pay off debt” or “buy a house.”
Wealthfront. Based in Palo Alto, California, this website earned top scores for transparency from Jack Waymire at Paladin Registry, an education website for investors. Currently managing more than $1.5 billion in assets, Wealthfront sets you on the path to investment by hitting a green screen button; you enter your age, annual income and cash/liquid assets. Online investment accounts are fully automated, fully diversified and periodically rebalanced. You can access Wealthfront from a computer, tablet or smartphone.
Rebalance IRA. Like Wealthfront, Rebalance is also based in Palo Alto and has earned transparency accolades from Paladin. Millennials will likely be pleased to know that the advisory board includes three financial titans, among them Jay Vivian. A former managing director of IBM Retirement Funds, Vivian oversaw $135 billion in IBM investment funds for more than 400,000 employees worldwide. Rebalance claims to save clients an average 45 percent to 72 percent in annual fees. Rebalance charges 0.5 percent in advisory fees and uses in-house software to generate retirement plans. It also offers free one-on-one discussions with a retirement investment advisor.
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10 Great Investing Sites and Apps for Millennials originally appeared on usnews.com
