Most people assume that investing is only for the wealthy. However, the world of investment is now open even to those who only have a few bucks in their pockets. With the rise of technology, a lot of investment firms have introduced services that allow you to start investing with just a little money. No longer do you need to be a millionaire to start building your investment portfolio. Here are our top 12 accounts for minor investments:
1. Betterment
Betterment is ideal for investors who want to grow their portfolio without the hassle of micromanaging their investments. It is an automated investing service that makes use of Modern Portfolio Theory to create your portfolio. They charge a fee of 0.25% of your portfolio value per year, which is very reasonable.
2. Wealthfront
Wealthfront offers a low-cost investment management service that requires no minimum investment. It allocates your funds based on your risk tolerance, investment goals, and time horizon. The fee is similar to Betterment’s, which is 0.25% per year.
3. Acorns
If you’re a beginner in investment, Acorns is perfect for you. It is an app that links with your credit or debit card to track your expenses. It then rounds up your purchases to the nearest dollar and invests the spare change in various index funds. Acorns charges a fee of $1/month for accounts with less than $5,000, and 0.25% per year for accounts with more than $5,000.
4. Stash Invest
Stash Invest is an app that enables you to invest in ETFs and individual stocks with a minimum investment of $5. It makes investing easy and accessible to beginner investors. Stash Invest charges a fee of $1 per month for accounts under $5,000, and 0.25% per year for accounts over $5,000.
5. Robinhood
Robinhood instantly caught the attention of investors with its zero-commission stock trading. This app enables you to trade stocks, ETFs, and cryptocurrencies with no minimum investment requirement. This means you can start investing straight away. The only downside to Robinhood is that it does not offer investment advice.
6. TD Ameritrade
TD Ameritrade is an investment firm that offers a wide range of investment products, including stocks, mutual funds, ETFs, bonds, and options. Its minimum investment requirement is $0, which makes it perfect for beginner investors. It offers a commission-free trading service for stocks, ETFs, and options, but charges a fee for mutual funds and bonds.
7. E-Trade
E-Trade is an online brokerage firm that enables you to invest in a wide range of investment products. It has no minimum investment requirement and offers commission-free trading for stocks, ETFs, and options. Its fees for mutual funds and bonds are similar to TD Ameritrade’s.
8. Charles Schwab
Charles Schwab is an investment firm that offers a lot of investment products, including stocks, ETFs, mutual funds, bonds, and options. It has no minimum investment requirement and offers commission-free trading for stocks, ETFs, and options. Its fees for mutual funds and bonds are also very reasonable.
9. Ally Invest
Ally Invest is an online brokerage firm that provides excellent trading tools and customer support. It has no minimum investment requirement and offers commission-free trading for stocks, ETFs, and options. Its fees for mutual funds and bonds are also relatively low.
10. Vanguard
Vanguard is an investment firm that provides an excellent range of low-cost investment products, including mutual funds and ETFs. Its minimum investment requirement is $1,000, which is quite high compared to other firms, but its fees are also relatively low. Its customer service is also reputed to be one of the best in the industry.
11. Fidelity
Fidelity is an investment firm that provides a comprehensive range of investment products. It has no minimum investment requirement and offers commission-free trading for stocks, ETFs, and options. Its fees for mutual funds and bonds are also low.
12. Schwab Intelligent Portfolios
Schwab Intelligent Portfolios is an automated investing service that creates a portfolio for you based on your investment goals and risk tolerance. It has no minimum investment requirement and charges no advisory fees, but the funds’ expense ratios are a bit high.
FAQs
1. Is investing with a small amount of money worthwhile?
Yes, it is. Investing helps you make your money work for you, and even small amounts of money can grow over time. It enables you to build wealth and reach your financial goals quickly.
2. How do I determine my risk tolerance?
Your risk tolerance depends on your investment goals and how much risk you are willing to take on. You can determine it by assessing your financial situation, investment experience, and goals. It is advisable to invest in a diversified portfolio to minimize risk.
3. How often should I check my investment portfolio?
You can check your investment portfolio as often as you like, but it is advisable not to make any hasty decisions based on short-term market fluctuations. It is best to review your portfolio at least annually or after a major life event.
4. Should I invest in individual stocks?
Investing in individual stocks can be rewarding, but it is also very risky. It is advisable to invest in a diversified portfolio of stocks, ETFs, and other investment products to ensure a balanced risk.
5. What is the most important rule of investing?
The most important rule of investing is to diversify your portfolio. This helps to maximize returns while minimizing your risk exposure.
6. What should I do if the market crashes?
If the market crashes, it is normal to feel anxious, but it is crucial not to panic. It is best to hold your investments and wait for the market to recover. Historically, the market has always recovered from a crash.
7. Do I need a financial advisor to invest?
No, you do not need a financial advisor to invest. But if you are a beginner investor or have specific financial goals, a financial advisor can provide valuable insight and help you make informed investment decisions.
8. How long should I invest for?
You should invest for as long as possible. The longer you hold your investments, the more time they have to grow, and the more returns you can earn.
9. Can I lose money when I invest?
Yes, you can. Investing comes with risk, and it is possible to lose some or all of your investment. However, diversification and a long-term investment horizon can help minimize your risk exposure.
10. When is the best time to start investing?
The best time to start investing is now. The earlier you start, the more time your investments have to grow and compound. Whether you have a lot of money or only a little, the important thing is to start as soon as possible.
Conclusion
If you are looking to start investing, there are a lot of options available to you, even with a small amount of money. The key is to determine your investment goals, risk tolerance, and time horizon. Then you can start building your investment portfolio using any of the accounts mentioned above. Remember, investing is a long-term game, and patience and discipline are essential virtues for a successful investment strategy.
