The 5 Best Investment Platforms You Need to be Using in 2021
The only New Years resolution I’ve actually stuck to began back in 2016 when I made a goal to track my spending, write a budget, and start investing some money for retirement. I think it’s an embarrassment that personal finance and general investment knowledge isn’t taught in school. I hope these blogs inspire the same passion that fueled me to get started. Now it’s time for you to do the same.
This blog skips over a lot of valuable information that, depending on your interest, may be worthwhile checking out. If you want to jump into the investment part, skip them and scroll down to the Top Apps and Platforms Section.
[IRA, 401k, and Personal Accounts, coming soon]
[Dollar Cost Averaging, coming soon]
[Dividend Reinvestment, coming soon]
My blog on Compounding Interest
The 5 Best Investing Apps and Platforms in 2021
The majority of these apps and platforms offer the same or similar features and ultimately depend on your preference and current needs. Keep in mind, these are platforms intended for beginning an investment portfolio, so some may have limited capabilities depending on your specific needs. For additional assistance you may need to consult a fiduciary advisor. I’ve been using them for almost 5 years and I love them all.
Robinhood
I start with Robinhood primarily because it’s one of the easiest to use with a great user interface. Robinhood’s name to fame started as one of the first commission-free stock brokers, thus paving the way for other investment firms to reconsider their own commission fees. This allowed just about anyone to buy and sell stocks without consulting a big name broker and paying excessive fees.
Pros
- Free to start, no buy or sell fees
- Instant funds available (up to $1,000) so you can trade immediately
- Offers fractional shares to encourage diversification
- Can toggle automatic dividend reinvestment plans (DRIP)
- Can automate daily, weekly, or monthly purchases for best dollar cost averaging (DCA)
- Easy to learn UI with intuitive search functions and financial metrics
Cons
- Has had unstable servers during extremely volatile periods
- Does not have IRA or 401k rollover plans available
- Requires your own portfolio diversification to limit risk
Wealthfront
Second on my list is Wealthfront, one of the largest Robo-Advisor platforms available. Being a Robo-Advisor, your portfolio is generated based on algorithms according to your risk tolerance profile as well as your investment time horizon. This keeps costs significantly low.
Pros
- Passive investment so you don’t curate your own portfolio
- Automatic portfolio rebalancing to maintain ideal risk
- Automatic dividend reinvestment plans (DRIP)
- Can start an IRA or rollover an existing IRA/401k
- Cost-effective fee by paying a wrap fee on 0.25% of portfolio balance
Cons
- UI can be hard to get used to and sometimes difficult to navigate
- Limited input to your portfolio diversification
- Cannot buy and select your own stocks
Axos Investments
Axos Invest (formerly known as Wisebanyan) is another Robo-Advisor platform with similar features seen in Wealthfront and Betterment. You set up an account, create a risk-tolerant profile, and link your bank account to begin investing. It’s also fairly straightforward.
Pros
- Passive investment so you don’t curate your own portfolio
- It’s free to get started
- Automatic portfolio rebalancing to maintain ideal risk
- Automatic dividend reinvestment plans (DRIP)
- Can start an IRA or rollover an existing IRA/401k
Cons
- UI can be difficult to get used to
- Limited portfolio diversification and suboptimal portfolios available
- Cannot buy and select your own stocks
Betterment
Number 4 on the list is Betterment, another Robo-Advisor platform. Again, its similarity to Wealthfront and Axos Invest leaves the major decision process up to preference of UI. Betterment also offers additional banking features, allowing you to open a checking and high yield savings account as well. This is becoming a more common practice amongst investment and money management brokers.
Pros
- Passive investment so you don’t curate your own portfolio
- Automatic portfolio rebalancing to maintain ideal risk
- Automatic dividend reinvestment plans (DRIP)
- Can start an IRA or rollover an existing IRA/401k
- Cost-effective fee by paying a wrap fee on 0.25% of portfolio balance
Cons
- UI can be difficult to get used to
- Limited portfolio diversification and suboptimal portfolios available
- Cannot buy and select your own stocks
Acorns
Acorns is probably the easiest and most passive way to invest money, but probably not the best long-term platform. Nonetheless it’s a great way to start investing, because Acorns automatically invests your spare change. The app works by linking to your bank so Acorns can round up your purchases to the nearest dollar, and then invest the difference. This is a great way to invest a little money here and there without feeling like you’re putting a lot of money into it. Acorns invests money using a series of diversified portfolios depending on your risk tolerance, similar to the other Robo-Advisors. The main drawback is the $1 monthly fee and the relatively small amount of money that is being invested.
Pros
- Passive investment so you don’t have to worry about it
- Invests small amounts of money periodically so you don’t need to deposit large sums of money
- Uses fractional shares to purchase small amounts of stocks depending on available funds
Cons
- Round-ups mean small amounts of money is invested, oftentimes making it challenging to see significant growth early on
- $1 monthly fee can be a large percentage of your portfolio early on, hindering the potential for growth
- Very limited portfolio diversification available
The Verdict
The best way to get started is to just begin with a platform and let the rest develop over time. You should start with one of the three Robo-Advisor platforms (Wealthfront, Betterment, or Axos) and set up a profile. The first, and most important investment plan to start with is your retirement account. You can refer to this blog here [future blog coming soon] on deciding what type of retirement account is right for you.
After starting your retirement account, you can also open a personal account with the same platform, or create your own portfolio on Robinhood. I think Robinhood is the best place to learn about stock trading because you get to research and buy your own stocks. Plus, they offer fractional shares of a stock meaning you can buy a percentage of stock if its price is too high.
Disclaimers
Do you want a free stock? I sure do. In fact, if you decide to start a Robinhood account using my very own ‘influencer link’ we each get a free stock once you fund your account!! Click here !! This is usually a cheap $5.00 stock, but you can get lucky with something like $APPL or $Visa worth $200. Oh, and for every person you invite, you (and your friend) will get another free stock.
I also use Wealthfront for my IRA account, a 401k that I rolled into, and a passive personal investment account. One of the benefits of Wealthfront is your first $5,000 invested are managed for free, and for every referral you invite you’re next $5,000 are also managed for free. This is a great way to reduce your annual wrap fee! If you want to get started with Wealthfront, you can click here and we’ll both benefit from the referral!
I also use Axos Invest because I started during their beta trials and I was given $25 upon funding an account. I have since then made a monthly contribution and left it grow over the last 4 years without adjusting the portfolio. In fact the account grew enough for me to buy my wife’s engagement ring! If you want to use Axos, click here to use my referral link and I think you get anywhere from $5–20 for stating!
Remember, investing money in the markets has its inherent risks, and you could lose some or all of your initial investment. I take no responsibility for your investment strategies and you must do your own research before buying stocks.
Time in the market is better than trying to time the market.
Archives
If you want to navigate through my other blogs, you can use this archives section.
Blog 1: The Fastest Way to Double Your Money — Manage My Money (Part 1)
This is the why behind the how. This blog broadly covers the importance of why you need to start investing ASAP.
Blog 2: Money Now or Money Later — Manage My Money (Part 2)
This is the step-by-step plan you need to follow so you can get yourself investing ASAP in 2021.
Blog 3: The 5 Best Investment Platforms You Need to be Using in 2021 — Manage My Money (Part 3)
I share some of the investing platforms that I’ve been using and I give my pros/cons on which ones I recommend. There’s also some referral links that’ll give both of us free stocks!
Blog 4: Compounding Interest — Investor Insight (Part 1)
This blog breaks down the beauty of compounding interest to give you enough information on why you need to start investing ASAP.
Blog 5: Pick the Right Retirement Account in 2021 — Manage My Money (Part 4)
This blog breaks down the differences between Roth and Traditional retirement accounts like a 401k and an IRA. It’s all about strategizing your taxes!
Blog 6: What to Do if Your Stock Drops — Investor Insight (Part 2)
In this blog I share some strategies you can use to help mitigate potential losses in your portfolio, such as dollar cost averaging and tax loss harvesting.
Blog 7: Even if You Bought $TSLA 10 Years Ago You Wouldn’t Have Become a Millionaire
In this unusual blog I break down the reality about survivorship bias and our overconfidence in our ability to hit the home runs. I demonstrate how non-buyers remorse when it comes to stocks like $TSLA should not hinder your decisions in the future.
