saving, investing, money, doctor money, saving apps, finance apps, investing apps

Saving and Investing for Fun Using Apps

The Internet offers endless ways to streamline our lives. We can shop for groceries, download library books, and book plane tickets, all with the simple use of an app. Learning to invest your money is no exception. The best part is that saving and investing need not be a chore. With many apps available today, saving money can be a lot of fun as well as easy to do right at your fingertips.Tiller a trusted resource used by Financial Residency

Even though money can often be a source of stress, in particular when debt is involved, it can be a source of fun, too. Money is fun to earn (usually, right?), fun to spend (definitely), and fun to watch as it grows. Money equals empowerment, as well as control and direction over your life, your goals, and your dreams. It’s certainly okay to not have a lot of disposable income, because thanks to these apps, you only need a little bit of money to get started saving and investing.

Rather than be restrictive, saving and investing money is an act in creating opportunity. Investing what you save allows you to create options for yourself to meet goals, to have fun, or, better yet, both.

To be honest, you probably don’t need as much money as you think you do. As long as you have what you need to be comfortable, to have a good life, do a good job, and be a good person, you are way ahead of the game. As for what “good” means in these contexts, that really is up to you. Our job here at Financial Residency is to help you maximize money on both sides of the needs versus wants equation.

As you learn to save, spend, and invest, let money be a focus, but not your sole focus. Use these apps to embrace the process of learning about all of the things you can do with your money to maximize its usefulness to you and have fun while you’re at it.

Money is fleeting, and it’s easy to feel as though you never have enough. Depending on your situation, it can always feel as though you owe somebody something. This may sound trite but here is the best advice we can give you regarding this feeling: don’t let it get to you.

Welcome to a fact of life. Money comes in, money goes out. There never feels like enough.

But, if you learn to live in the moment and embrace where you are financially right now, if you can embrace your financial education as a process rather than as working towards a destination, you can have some real fun with saving and maybe, just maybe, make some money in the process.

Because even when your student loans are paid off, you’ll likely still have a car payment or a mortgage payment for most, if not all, of your adult life. This is normal. In fact, if you have these things, then you have a car and a house, so congratulations!

This means you are engaged with the world around you. You have a lot to give and a lot to learn.

This is an exciting place to be.

Now, about these apps.

There are no end to apps available that can help you save money. The best part is that many of them make saving money easy and fun. Below we describe a few of the more prominent and, in our opinion, useful apps here to help you narrow your search for a pocket tool to make saving your money fast, easy, and right at hand.

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Saving and Investing – Acorns

Acorns is among the best-known apps for saving and investing. Their tag line sums up the focus of this app: Investing. Earning. Growing.

Ideally, with this app you will be able to grow your saving and investing knowledge over time with little bits of money, much like how a small acorn takes time to slowly turn into a mighty tree. Grow your money steadily over time and you’re winning. There are no get rich quick schemes here. This app – just like with investing – is all about starting small and using time to your advantage.

The big picture philosophy of how this app works is that it uses small amounts of money to add up slowly over time. This is a great strategy for saving money, because those small amounts really do add up, and because the pieces are small, you don’t miss them. You do reap the benefits when they make up the bigger whole, however.

To use Acorns, simply download the free app, and link your bank account or credit card. You then authorize the app to round up your daily purchases, and use those bits of change to buy shares in investment funds of your choice.

Think about the money that’s rounded up like your pocket change. For example, say you buy $34.96 worth of gas. The extra four cents that would make this purchase an even $35 goes to your investment account. Or, you buy $110.80 worth of groceries. The additional twenty cents that would make this $111 goes to your investments account.

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That doesn’t sound like much, does it? That’s the genius of this strategy. You are saving amounts of money so small that you won’t even miss them, yet those bits and pieces add up so quickly that the compounding effect really does make a difference, especially over time. This is how you find money you never knew you had. This is how you take that small seed of pocket change and help it grow over time into a sturdy, full grown oak.

Acorns is a great option for anyone new to investing who doesn’t have a lot of money to invest, or doesn’t think they have a lot of money to invest.

The upside is that you pay a much lower fee to use this app than you would to pay a fee-only or Asset under Management financial advisor. The downside is that, while they do have customer service representatives to help you, that is not the same as having your own financial advisor who knows your entire portfolio and can guide you toward your long-term goals. This makes Acorns a cost effective way for someone new to investing get their feet wet with the stock market with relatively low risk and without much start-up capital.

Saving and Investing – Stash

Stash is similar to Acorns in that both are apps designed to help those new to investing get their feet wet in the stock market, so to speak, but with Stash you get more choice in where and how you invest your money with a wider selection of funds. Stash only requires $5 to start an account, and charges $1 a month as a fee. Like with Acorns, little bits of money add up quickly, and also like Acorns, you have the opportunity to learn about investing with relatively little risk. Rather than rounding up your change, with Stash you decide how much to invest at any given time, and those amounts can be very small. This allows you maximum flexibility with minimal risk.

While you won’t have the personal advice of a fee only financial advisor, the app does provide guidance towards funds that work well as foundational funds versus greater risk. You will also have the opportunity to buy shares of stock in addition to funds.

Stash is great for visual learners, offering a synopsis of your portfolio in chart form, as well as other visuals, like the ticker symbols and bar graphs showing the level of risk for each fund or stock. There are enough funds and stocks available for you to make some choices, but the app provides information to help you make informed choices without being overwhelmed. Funds are named thematically so you can choose where and how to invest based on your own personal interests.

Saving and Investing – TD Ameritrade

Perhaps you are not comfortable sharing too much personal information with apps you maybe haven’t heard of before and don’t particularly want to link your bank account or invest in a company that is not familiar. No worries, there is also an app by a reputable financial services company that you have most likely heard of: TD Ameritrade. Their app is designed to complement their financial advising and investing services.

With TD Ameritrade you can go big if you want and invest larger amounts of money, or you can dip your toe into the investing waters with individual trades. This app requires a bit more know-how and comfort with investing in the stock market than Acorns or Stash, and so isn’t as great for true beginners, but could be a terrific next step if you have some basic investment experience, or if you are comfortable with a higher level of risk and would prefer to jump right in.

They charge a per trade fee of $6.95. You can make trades with as little money as you want, but to invest in funds, you will need at least $2000 in your account. This gives you a goal to work toward, if you are so inclined, and does require some tolerance for risk to get to that point (or, a $2000 chunk of cash you’re comfortable investing. Note: Do not invest that much money as a beginner unless you are comfortable with the fact that you could lose every penny of it).

Robinhood

The Robinhood app was designed to allow users to buy and trade stocks for free. If you have been reading this blog for a while, you know that we generally advocate for professionals being paid a fair wage for services rendered, so if something seems too good to be true, it’s important to ask yourself why. Robinhood is reputable, but it is important to note how they use your money and how much of it they keep. Robinhood is paid is by investing the interest earned in investor (your) accounts.

Let’s say you invest $100. Every month, that $100 or more earns a tiny bit of interest. In a traditional savings account, you would keep that interest and essentially re-invest it, because the following month, your interest would be calculated on the new capital. With Robinhood, they keep that bit of interest as their fee. The upside is that you don’t have to pay $6.95 or more per trade, and in fact, don’t have to pay anything out of pocket. If you are comfortable with Robinhood using your money in this fashion, it can make saving pretty seamless for you.

As long as you know what you’re giving up and are making an informed decision, this may not be a bad thing. If your money is in a traditional savings account, it’s earning a little bit of interest but not growing very much. It’s safe there. It’s comfortable. You might be comfortable, too. Except no one ever got rich by being comfortable, at least not in the world of personal finance and investing.

With Robinhood, you don’t have to pay a $6.95 per trade, but you do give up that little bit of interest that adds up over time. It’s up to you to decide if it’s worth it. There is some criticism of the app because it makes investing in the stock market, otherwise known as day trading, very easy to do, which is great. However, that can be a risky thing for people who are new to investing and don’t fully understand the risks.

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Stockpile

Go to Stockpile.com and you are presented with a simple proposal: “Start investing with just $5.” Sounds easy, doesn’t it? Sign up for free. No monthly fees. And really, investing in the stock market is and should be easy. Stockpile works buying stock and selling you a small piece of it (known as fractional shares). You can buy physical gift cards for stock in well-known companies such as Facebook, Tesla, Amazon, and Disney.  

Stockpile was designed by CEO Avi Lee, who was concerned less than a third of people aged 18-29 own stocks, largely because they don’t have the capital to invest but also because they weren’t sure how to get started. He wanted to make investing fun and easy and a little bit tangible, so that investing wasn’t some fancy thing you hired a professional to do, but so you could roll up your sleeves and get involved in your own investing.

The idea was to make investing in the stock market accessible for everyone and teach Americans the “fundamental rules of the stock market.” When you’re ready, you can up your game by making trades for $0.99 a trade.

Etrade Mobile

Etrade Mobile is not the cheapest option in an app, but is user-friendly and will help you learn more about investing, should more of an education be your goal.

Like TD Ameritrade, you’ll pay $6.95 per trade (or cheaper if you meet a certain threshold of number of trades per quarter). You’ll know exactly what you’re paying for and there are no hidden fees. The app is designed also to help you learn how to research stocks, review available data, and make informed decisions. With close to 9,000 available funds from which to you choose, you have a tremendous opportunity to learn.

The app provides an overview of each stock of fund, which is full of information yet admittedly can be overwhelming for the beginning investor. This app is great if you’re really looking to learn about investing, but can slow you down if you simply want a reasonably safe way to get involved in investing and start learning with minimal risk.

Time to get started

All of the apps mentioned above are easy to use. They each offer an affordable way to get involved in saving and to learn about investing. They each provide options for moving around smaller amounts of money so you get experience investing without needing a lot of money to get started.

With any app, the basic principles of investing hold true:

  • Start early
  • Diversify your holdings, and
  • Be in it for the long haul.

Anyone can get started investing with these apps, given how little money it takes to open an account. Diversification is your friend, and because these apps only require the little bits of money you can probably spare pretty easily (the equivalent of the spare change in the couch cushions), you’ll be able to use your online account as a great complement to your more strategic investing portfolio.

The bottom line is that no one teaches you how to invest when you’re in school. No one teaches the principle of save early, save often and how impactful it can be when you follow this simple strategy. So, we at Financial Residency are here to share that saving early and often really is possible, even if you don’t have a lot of money to invest. These apps can help you find ways to learn and have fun with saving and investing without risking losing large amounts of money.

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Ryan Inman