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5 Great Investing Apps for Beginners

February 21, 2020

This blog has been prepared for informational purposes only and does not constitute financial or investing advice. You should always use caution when making investing decisions. Rates and fees for the apps listed were obtained as of February 21, 2020 and are subject to change.

 

There are several ways to go about building wealth – some focus on building their career and earning more, putting their money into traditional savings accounts, 401ks, and IRAs, while others may focus on putting their money to work for them through investing in stocks, bonds, and ETFs. While many young adults have previously shied away from the stock market and investing in the past, a recent study showed that seven in ten millennials are financially investing in some way, and that 85% of millennials do not feel too young to invest

 

Why the change? From national student loan debt reaching record highs, to the housing market being generally more expensive for buyers, there are certainly enough reasons for millennials to focus on finding new ways to build their wealth, rather than just using traditional savings. 

 

If you’re a believer that history repeats itself, you may find the stock market to be a good opportunity to grow your wealth. Since its inception in 1896, the Dow Jones Industrial Average has delivered an average return of 5.42% per year, and the S&P 500 index has delivered an average return of 7.96% from 1957 to 2018. 

 

For the new investor, however, getting started can be a bit overwhelming. Some questions beginners might ask: What should I invest in? Should I invest in stocks, bonds, or ETFs? Should I manage my portfolio or allow a robo-investor to manage it? What about cryptocurrency? Which is going to get me the best return? Which strategy is the safest? Should I be thinking long-term or short term?

 

Luckily, there are a variety of applications that serve well for individuals that are just getting started on their investment journey. Here are five great apps that all have unique benefits for individuals looking to start investing.

 

Robinhood®

Robinhood ® launched in 2013 and took the digital investing world by storm by offering commission-free trading along with a free trading account and providing users with a free stock for just signing up. Its simplified user experience may not suit the seasoned investor, however it’s a great starting point for individuals interested in investing in stocks, ETFs, and even select cryptocurrencies. You can search for stocks, add them to your watchlist, get some general information about the company, such as analyst ratings on the stock (buy, sell, hold), their earnings data from previous quarters, their dividend yield, among other useful numbers to guide your investing decisions. Upgrading to Robinhood Gold for $5 a month gives you access to extending trading hours, real-time market data on order volume, among other features.

 

Robinhood recently released fractional shares allowing you to invest in any company with as little as $1. Overall, Robinhood is a user-friendly app for those who want to be in full control of their investment strategy. 

 

Acorns®

If managing your portfolio isn’t for you, Acorns ® may be a more suitable option. Acorns is an app primarily focused on helping you save and grow wealth by investing your spare change. Once you link your bank account, Acorns will track your purchases and round them up to the nearest dollar, depositing $5 worth of spare change at a time. You can set the round up to double, multiply by five, or multiply by ten if you’re interested in stepping up the amount you invest. When you first begin, the app provides you with a questionnaire that helps determine your investment goals and strategy, allowing you to choose a more moderate or aggressive strategy. 

 

In addition, the app gives you small rewards for making purchases with specific companies, like Walmart, Chevron, Uber, and more. Acorns is a great way to passively invest your spare change.

 

Stash®

Allowing you to invest with as little as $5, Stash ® is a great app for learning how to invest effectively. Like Robinhood, it allows you to be in control of your investments, however it provides a bit more guidance as you move along by helping you pick your investments based on your goals. The app is filled with articles and tips that help strengthen your investment decisions, also providing themed categories of investments, such as innovation or environment. 

 

Betterment®

Betterment ® is a leader among robo-advisors, providing value to hands-off investors. The app charges just 0.25% for asset management annually, with no minimum amount to start investing. Betterment takes a traditional approach to investing by diversifying your portfolio based on your decided level of risk tolerance and your goals. They offer more portfolio options than some of the simpler applications, making it a strong tool for individuals who know what they want out of a robo-advisor. It’s generally less expensive than other robo-advisors and uses strong algorithms to manage assets effectively and provide strong returns. 

 

TD Ameritrade®

If you’re interested in doing more than getting your feet wet, TD Ameritrade ® is an app that borders between being suited for the beginner and intermediate-level investor. The app, offered by one of top US brokerage firms, offers a powerful trading experience, allowing you to customize dashboards and screens, access research and advice, receive market news and alerts, and watch educational videos on investing. It’s definitely more suited for the active investor who wants to make adjustments to their portfolio on a daily or weekly basis. While they previously charged $6.95 per online equity trade, they recently released commission-free trading as well. While it may not be the best place for everyone to start, it’s a great place to consider moving to once you’ve established your investment strategy and are working with a larger portfolio. 

 

With these apps, investing doesn’t have to be overwhelming. You can invest passively, schedule deposits, invest spare change, or dive in and control your investing destiny – whichever feels right for you. You should always use caution when investing your hard-earned money, however, getting started with a few dollars now and learning the ropes could be worth something to you in the future. We hope that at least one of these apps provides you with value and helps you get started in your investment journey.

 


 

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Man feeling overwhelmed by student loans
2020-10-15
What to do When Your Student Loan Payment is Overwhelming   

Having student loans is not unusual. In fact, 45 million people have them. It’s also incredibly common to feel overwhelmed by your student loan payments.   A survey of student loan borrowers found that almost 65% of respondents said they lose sleep because of the stress caused by their loans. If you find yourself overwhelmed by your monthly student loan payment, there are some options you should consider to lessen the burden.   Before you can explore alternatives, however, you need to know the types of loans you have. Certain options are only available for federal loans as opposed to private loans. Check the Federal Student Aid website to determine any federal loans you may have, and request your free credit report to see any private loans. Once you’re familiar with your loans, you can consider new courses of action.  

Create a Budget

If you don’t already have a budget, create one! This will allow you to see if you can afford your current student loan payment. It will also show you areas where you’re spending unnecessarily. If you find there just isn’t enough income to cover all your necessary expenses, then you can begin working on different ways to reduce your student loan payment.  

Research Different Payment Plans

If your federal student loan payment is overwhelming, consider switching to a different payment plan. When you initially begin repayment, your loans are automatically put on the standard repayment plan. On this plan, your payments are based on a ten-year repayment term.   A Direct Consolidation Loan can help you change your payment plan to help make your payment more affordable. It can also help consolidate multiple federal loans into one loan. (Note: Consolidating your federal loans is different from student loan refinancing, discussed below.)   This will help you qualify for certain longer repayment plans, resulting in a lower monthly payment. One of the drawbacks of extending your payment term is you will end up paying more in interest costs over time.  

Income-Driven Student Loan Repayment

Certain loans are eligible for income-driven repayment plans. They can help make your payments more affordable and are based on your income and family size.  

Graduated Student Loan Repayment

If an income-driven repayment plan does not work for you, you can change to a graduated repayment plan. Your payment will begin low and increase over time for a ten-year term.  

Extended Student Loan Repayment

Another option is an extended repayment plan. To qualify, you must have certain loans over at least $30,000. Your payment may be fixed or may increase over time for a 25-year term.  

Look Into Refinancing

If you have overwhelming private or federal student loan payments, consider student loan refinancing. Refinancing may lower your interest rate and reduce your monthly payment. This is a good option even if your current payment fits your budget.   Refinancing can help lower your monthly payment, and can also save you thousands of dollars in interest over the life of the loan. Refinancing means obtaining a private loan to pay off your existing student loan or multiple loans.   Student loan refinancing differs from consolidation, which is only for federal student loans and may not necessarily reduce your interest rate. You can refinance private or federal loans, or both, and can also change your student loan repayment term to better fit your needs.   Here is an example of how refinancing can save you money:   If you have $65,000 of student loans with a 6% interest rate and have 10 years remaining on your loans, you will pay approximately $722 per month. If you refinance and qualify for a lower interest of 3.61%, your monthly payment would be reduced to approximately $646 per month. This equals savings $76 per month in savings. You will also save more than $9,000 in interest over the life of the loan.   To see how much you could save, try ELFI’s Student Loan Refinance Calculator.*  

Increase Your Income

Of course, increasing your income is easier said than done. If your student loans payments are becoming overwhelming, however, it may be a necessary step. Increasing your income through overtime hours or a side hustle can make your payments more manageable. A side hustle can be as easy as babysitting or dog walking, or more involved like starting a side business based on a passion.   If you haven’t begun repayment on your loans, but know you will face a significant loan payment after graduation, consider these steps:  

Build a Budget Early

Start a budget before repayment begins that includes your future student loan payment. This will allow you to see if you will be able to comfortably afford your payment. It will also help you build an emergency fund and a strong financial foundation.  

Seek Employer Student Loan Benefits

Look for an employer that offers student loan assistance. The number of companies that are offering student loan benefits is increasing, although the benefit is still rare. Some offer monthly benefits that can help you pay your loans off faster. Others offer a yearly benefit amount for a certain number of years. Either way, extra money from an employer to help pay loans will help you reduce your loan amount faster.  

Work Toward Public Service Loan Forgiveness

Apply for employment that may qualify for forgiveness. If you have federal loans, certain employment can qualify for forgiveness under the Public Service Loan Forgiveness program. Certain loans and types of employment are required so be sure to pay close attention to the requirements.  

Bottom Line

If you have an overwhelming student loan payment, explore your options to reduce your payment while furthering your debt-free journey.  
  *Subject to credit approval. Terms and conditions apply.   Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no­­­ control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
Millennial woman learning how to invest
2020-10-09
How to Start Investing: A Millennial’s Guide

One of the best things you can do for your finances is start investing. Over time, investing is one of the likeliest ways you’ll build enough wealth to reach your financial goals — and even achieve financial independence.   While investing can seem like a daunting task, the good news is that it’s easier than ever to get started. Here’s what you need to know about how to start investing.  

Decide how much you can invest

Figure out how much you can invest each month. The key to long-term investing success is consistency. Even if it’s a small amount, you can start investing.  
Look at your income and expenses. Review which items can be reduced to create some room for investing. Even if you can only invest a few dollars per week, it will help you get started.  

Paying down debt vs. investing

One of the big issues facing millennials is whether to pay down debt or invest. In the end, it depends on your preference, but having debt doesn’t mean you can’t invest. For example, if you have student loans, you might put 70% of your available money toward paying down those student loans and the other 30% toward investing. However, if you have high-interest debt like credit cards, it might make sense to put 90% toward debt reduction and 10% toward investing.   Depending on your situation, you might want to tweak where you put the money, but you don’t have to let being in debt stop you from investing if you want to start building wealth.  

Know your goals

Next, decide on your goals. What do you want your money to accomplish on your behalf? What you plan to use your money for, as well as your timeline, can determine how you invest your money.
  • Short-term goals: If you want to save for a down payment on a house, a vacation or a similar goal in the next one to three years, consider putting your money in high-yield savings vehicles, or, depending on your situation and risk tolerance, bond investments. Even for short-term goals, in some instances, a mix of stocks and bonds can work.
  • Long-term goals: For longer-term goals like saving for a child’s college education or your retirement, you might decide to invest more heavily in stock funds, real estate investment trusts (REITs) and other higher-yielding assets.
 

Your risk tolerance

As you learn to start investing, make sure you understand risk tolerance. You need to be familiar with how much risk you’re prepared to take on. For example, if you’re relatively young, you have more time to withstand and recover from market downturns, economic problems and investing mistakes.   You should also consider your emotional risk tolerance. Even if, financially, you can handle the ups and downs of the market, you must be able to handle them emotionally, as well. If you struggle with the idea of using a stock index ETF to meet your short-term goals, then look for something that better suits your needs.  

Get help to learn how to start investing

There’s nothing wrong with asking for guidance as you learn a new skill. A number of online investment brokers can offer you professional help as you make your plans. Betterment, Wealthfront and Wealthsimple can help you build a portfolio that matches your risk tolerance and goals. Additionally, it’s possible to get help from human advisors as you create a portfolio.  

Basic tips to help you start investing

Start ASAP

It’s all about compounding returns, so the earlier you start, the better off you’ll be in the long run. Many investing experts talk about “time in the market instead of timing the market.” For many investors, starting early and being consistent about investing, while increasing contributions over time, is most likely to result in long-term success.   You can start investing at any time. If you haven’t started already, begin now. It’s relatively easy to open an account and begin investing.  

It’s fine to start small

You don’t need a lot of money to start investing. In fact, there are a number of apps that allow you to invest using pocket change. Check out our recommendations for the best investing apps here.   It’s true that investing a few dollars each week isn’t likely to fully fund your retirement or other financial goals. However, starting small gets you in the habit of investing and growing your wealth.   As your finances improve, you can increase how much you invest, growing your contributions to meet your goals. But, for now, start with whatever amount you can. The money you do invest in will grow over time, and you can keep adding to your portfolio in the future.  

Consider index mutual funds and ETFs

When trying to decide what to invest in, some people are overwhelmed by the prospect of sifting through individual stocks and trying to pick “winners.” For many beginners, it makes more sense to focus on vehicles that offer “instant diversity.”   Index investments offer exposure to hundreds — or even thousands — of securities at once. Rather than trying to choose individual stocks, you can get access to a wide swath of the market. If you decide later that you want to invest differently, you can change your portfolio makeup. For beginners, however, index investments offer a way to start building wealth while you research other choices.  

Learn the basics

Finally, make sure you learn the basics. Read about how investing works, how different assets perform and when they might be appropriate. While you can start small with index investments, use that time to learn when (or if) it’s time to try other investing strategies.   In the end, no one knows your situation as well as you do. Before investing, carefully consider your own situation and consider requesting help from an investing professional.  
  Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.
Celebrate paying off your student loans
2020-10-08
7 Ways to Celebrate Paying off Your Student Loans

At last, you’ve done it! You’ve been diligent in paying off your student loans, and now you’re finally free of them. Being free from student debt means you can start tackling other financial goals. Before you go back to the money-saving grind, however, why not celebrate paying off your student loans? After all, with student loan debt reaching 1.2 trillion in the United States, every time someone pays their debt off it’s worth celebrating.   While it may be a little more difficult to celebrate during the ongoing COVID-19 pandemic, you can still have a good time. Here are 7 great ways to celebrate paying off your student loans without acquiring new debt on the way:  

Relax

Simple as that, sit on the couch and enjoy being debt-free. Paying down student loan debt is stressful, but you’ve done it. Good job. Imagine we’ve given you a high-five and a pat on the back.  

Throw a Digital Party

Include all your friends or family in a video call and enjoy each other’s company. Maybe even schedule several separate video calls so you can focus on celebrating with each group.  

Treat Yourself

It’s time to treat yourself to something nice. Choose an item or experience that is meaningful to you: a new outfit, a new pair of shoes, go out to dinner, whatever makes you happy. Take some time to enjoy whatever you’ve gotten. You’ve certainly worked for it. Just make sure it’s not something that’ll put you into credit card debt!  

Treat Someone Else

What better way to celebrate your paying off your student loans than by including those who helped make you successful? Take your parents out to a nice dinner or have a good time with some close friends. Make sure they know how much you appreciated their support throughout your student loan repayment journey, especially if they’ve helped pay along the way.   Another great option is charitable giving. You can celebrate paying off your student loans by giving to a worthy cause. Whether as a one-time gift or a monthly series of donations, your money will go toward something that you feel is important. Not only will you feel great for having given to something worthwhile, but you may also be able to deduct your charitable donation from your taxes.  

Plan a Trip

Even if you’re planning for the future, now is the perfect time to consider where you’d like to travel. Take a look at some spectacular destinations. Decide where to go. Start saving now, and when the departure date arrives, you’ll be ready to go.   If you’re already saving toward other financial goals and want to be careful of your budget, consider a road trip. There’s still plenty of time for a cross-country odyssey before winter, and the countryside will look particularly beautiful in the fall. If you’re looking for more vacation ideas, here are a couple of vacation ideas that won't break the bank.  

Plan Your Next Financial Conquest

For those who are goal-oriented, now is the perfect time to decide what financial goal you’ll tackle next. Is it time to get a new car? Eliminate the rest of your credit card debt? Maybe it’s even time to buy a house. Ultimately it’s up to you to decide, but you should set up a plan to tackle that next big financial goal in a timely and efficient manner. The good news is, since you’ve already bested your student loan debt, you’re not only experienced but also prepared to face whatever comes next.  

Save Your Student Loan Payment

They say the best time to start saving was yesterday. The second-best time is today. Celebrate paying off your student loans by investing in your future financial health. Put the amount of your student loan payment in a savings account each month or consider investing it. Your future self will thank you. You’ve already proven you can live without it, so why stop now? But as always, make sure to do your research before you launch any type of investing strategy!   Congratulations on eliminating the last of your student loan debt. You should be incredibly proud of the effort you’ve put into seeing your payments through. Before you start the next step in your financial journey, take some time for yourself. Enjoy that feeling of success and use it to push yourself toward your next goal. Now is the time to celebrate!   If you haven’t yet paid off your student loans, you may want to consider student loan refinancing. Take a look at what student loan refinancing could do for you here.  
  Notice About Third Party Websites: Education Loan Finance by SouthEast Bank is not responsible for and has no control over the subject matter, content, information, or graphics of the websites that have links here. The portal and news features are being provided by an outside source – the bank is not responsible for the content. Please contact us with any concerns or comments.