When it comes to money management, I'll be honest, I've been horrible at it most of my lifetime. It was something never talked about in my family while I was growing up and I'm pretty sure it's not talked about in many African-American households. Like many African-Americans, I grew up in a single parent household with my mom bearing the brunt of the financial responsibility. Needless to say, she was too busy working and trying to make ends meet to teach me anything about finance. She was learning herself, as we lived pay check to pay check, day to day. Furthermore, the school system conveniently doesn't discuss money and finances at all and, in many cases, it's something we have to learn on our own through trial and error.
Years ago, my uncle introduced me to Dave Ramsey by giving me his book "The Total Money Makeover" and it gave me a new perspective on life, finances, and savings. As I got older, I remember my mom trying to teach me about finances, but by that time I was in my mid or late 20s. She kept saying, "save, I don't care if it's a dollar, just save." Now, on the surface this sounds like very good advice. Just save a dollar here and there for a rainy day right? But what Dave Ramsey showed me was that it's a little more complicated than that, yet still just as simple. You first want to pay off some bills, then save an emergency fund in cash, and finally invest to secure your livelihood in the future.
Growing up in not the greatest of neighborhoods and not the greatest of situations, we were never taught to invest, only to "save money for a rainy day". While you save that money and it sits there collecting dust, you could be investing that money and having it grow into much more in the long run. This is what I've learned over the years and it's the strategy I implement in my life today. With that said, I've developed a list of my personal top 3 investing apps that can help you build wealth and increase the value of your money through interest over time. Bear in mind, all three of these apps are geared towards new investors looking to get started with not much capital:
1. Stash
When it comes to investing for beginners, it doesn't get much easier than the Stash App. It's extremely easy to navigate as far as searching and buying stocks is concerned. It even makes ETFs (exchange-traded funds) easy to distinguish by giving them names like "Young Money" or "Delicious Dividends" to hone in on your particular interests. It also allows you to buy fractional shares, so instead of paying $1,900 for a share of Amazon, you can pay $200 or $300 to still own part of the company.
The Stash App also allows for you to set up automatic weekly or month investing in the companies you see fit. And like many other investing apps these days, Stash offers you an opportunity to set up a banking account with them. The primary drawback that many point to with Stash is their monthly fee of $1 per month. Personally, I don't mind the fee and if $1 per month bothers you, you may have bigger, more pressing issues to worry about other than investing.
2. Acorns
My second favorite investing app is a little app called Acorns. Unlike Stash, you can't buy individual stocks on Acorns, which is really the beauty of it. Acorns allows you to spread your money out over a variety of stocks like an ETF or a Mutual Fund, except they make it a lot easier. Your options for investing range from "Very Conservative" to "Conservative" to "Very Aggressive" with each investment choice geared towards your personal risk-tolerance level. Acorns also has a magnificent round up feature that allows you to invest your spare change left over after regular, every day purchases. This money can really add up over time. It also lets you choose whether you want to activate "round ups" automatically or manually. Again, another drawback for Acorns is the fact that they charge a fee of $1 per month. Depends on what you want, but I have no problem with such a small fee to help me manage and invest my money.
3. Robinhood
By far, the most popular of all the investing apps today is Robinhood. It is, indeed a great investing app, especially for new investors. It gives you a multitude of options and if you're worried about fees, no worries because it's absolutely free! Like Stash, Robinhood gives you the choice to invest in individual stocks and bonds. Unlike Stash, there are no cute sounding ETFs like "Clean Energy" or something like that; you have to be a little more sophisticated when investing on Robinhood and truly do a little research in the stocks and ETFs available.
Robinhood is also excellent with keeping investors up-to-date about market trends with constant new stories within the app feed. And if you really wanna get fancy, the app also allows you to trade options; however, I wouldn't suggest using this feature on Robinhood because the app can tend to lag on your options purchase or sale, costing you to lose money if the option isn't traded at the time and price you wanted. Overall, however, it's a great app for investing in the stock market.
While it may seem very risky to invest at the moment, based on the headlines and the climate of the United States, your future self will thank you for it. I've made it a habit to always invest on a weekly basis, through thick and thin because you never know when the market could explode and that extra money could come in handy. Furthermore, you never know when we'll have another market downturn or an event like Covid-19 that puts you out of work abruptly.