I Want to Start Investing but Don’t Know Where to Start
If you’re anything like me, investing has been on my to-do list for a long time. Now when it comes to saving and budgeting, I’m an expert. Ask me anything about the stock market, and I’ll look at you funny. Besides contributing to my company’s 401k, I didn’t have a clue on where else to start. That’s until I discovered robo-advisors. And no, this has nothing to do with Robocop.
So what are robo-advisors?
According to Nerdwallet, a robo-advisor is an online, automated portfolio management service. So basically, robots do all the investing for you based on their algorithms. Much like Digit (which we discussed earlier this year), it’s the same concept except with investments. And since computers are managing your investments, it costs less than if a financial advisor was managing your portfolio.
If you’re just starting out in investing, this may be the perfect start to your journey. There shouldn’t be any more excuses on why you’re not investing. Notice I highlighted start. For some, robo-advisors may be all that they need but don’t stop there. This is the perfect opportunity to learn more about investing. Although you are getting a jumpstart on investing, don’t put all your trust in robo-advisors (just like you shouldn’t put all your trust in your financial advisor). You should be learning where your money is going and getting to the point where you’re able to manage your investments yourself.
With the mainstream spread of robo-advisors, there are several companies you can look into.
And the list goes on. You definitely have a lot of options to choose from. Pick a platform that best suits your needs. Each platform is different and offers different benefits.
As for me, I have personal experience with Acorns. This is a great start for beginners, especially if you don’t want to start off by investing a ton of money. Acorns main feature is investing your spare change from linked accounts. This allows you to invest in one of their five portfolios that range from conservative to aggressive. Their portfolios are made up of low-cost iShares and Vanguard exchange-traded funds that cover just six asset classes: real estate, large-cap stocks, small-cap stocks, emerging markets and corporate and government bonds.
But I have done a ton of research and plan to expand to other platforms such as Betterment in the near future. My goal this year was to start investing and learn as much as possible. Robo-advisors helped me reach this goal along with reading several books. I have listed some articles below for that gives a deeper look into the different robo-advisors and a couple of books on investing as well.
The Great Ones