Investments As Mobile & Flexible As You
You’re sitting in rush-hour traffic, crawling along at 5mph, when a rider on a motorcycle weaves between you and the car next to you and maneuvers up past the crush of gridlock. When it happens, chances are you think something like, “I want that.”
You gain freedom as a freelancer or contract worker that you don’t have as a company employee, much in that same way that a biker gains some freedoms denied to drivers. You ditch the baggage of the 40 hour work week, the bulk of the cubicle or time sheet, and the pressure to work with people you absolutely cannot stand. You’ve got a little more wiggle room, and that can be exhilarating.
You also lose some of the protections and benefits that traditional employment provides, much in the same way that motorcycles aren’t equipped with airbags, seat-belts, or tons of steel and aluminum. You end up paying both the employer and employee sides of your taxes, and your health insurance is your responsibility unless you are covered by a family member. You also lose any pension or company-matched retirement plan, so figuring out what you’re going to do when you hit your golden years becomes your responsibility*.
There are some options out there, like a self-employment 401(k) or an IRA, that mimic the plans that employers offer. These plans are only partially effective for retirement planning with employer matching, though, so there’s an argument to be made that this would be akin to adding a spare car tire to your motorcycle. It isn’t made for you, it doesn’t really make you safer, and it limits your mobility. While there are all kinds of articles full of advice that reminds you to budget, save, and invest long term, there isn’t a lot of information floating around regarding investment plans that aren’t based on the 9–5 model.
Then Acorns came along**. The microsavings/microinvesting company started out with a simple online platform that lets you invest the change from purchases you make (so, if you spend $55.73, it will deduct that $0.28 and invest it for you), as simple and relatively painless way to start saving for something long-term. Student accounts are free, and you pay $1 a month if you have less than a million invested, which is FAR cheaper than paying a broker. You can adjust how much risk you’re willing to take, and how aggressive you would like your portfolio to be.
Setting up the app is simple. It hooks to your bank account and as many of your credit cards as you’d like, and you can set up recurring deposits (if you’d like to invest more) or you can decide to choose which individual purchases qualify (if you’re on a real shoestring). They also have a new retirement option that allows you to use the app to create the IRA, without having to fuss with brokers.
Other companies like Stash and Robinhood offer similar services, but as I’m not a customer, I can’t speak to all the specifics of their programs. I do know Stash doesn’t charge a monthly fee for accounts worth less than $5,000, and Robinhood lets you invest cryptocurrency, which makes it unique in that regard. Some are geared more toward knowledgeable investors, while others take on a more “all-inclusive” role. Which one you choose will depend on your comfort level, how much you are planning to invest, and the time you have to give to the process. Do your research.
These kind of apps are at the frontier of making saving and investing simpler and more accessible for those of us who are constantly filling up a gas tank and grabbing a drink before heading off to another gig. Especially without the safety net of an employer-backed retirement plan, they are worth looking into for those of us trying to build up a nest egg without getting caught in the daily commuter slog. Think of them as spine-protectors, riding boots, or an armored jacket: safety gear built specifically for a smaller, faster, more adaptable way of getting around.
*It needs to be noted that I am not a tax professional, and you should talk to your tax person as well as your financial advisor before making any big changes to your life or monetary plans.
**I am not being paid or reimbursed for writing about a product, but am sharing, from individual experience, what products have worked for me
Carissa Martos is a teacher, author, ASL interpreter, and activist in Portland. Born in Los Angeles, she graduated from UC Berkeley before completing her MS in Education in Oregon. Married for 15 years, she’s raising a teen and a tween. She’s worked in everything from retail and health care to customer service, and her writing can be found at www.BleedingKeystrokesYellowWallpaper.com