The Best Investing App For Beginners in 2021!?

welcome back to brendan fitness and money where we use the power of sweat and spreadsheets to crush our goals so what makes for a good investing service especially if you're a beginner in my opinion less is more so back in the day you actually had to contact a human person and instruct them to buy you some shares of whatever company that you want to invest in hey billy buy me a hundred dollars worth of general electric stock more recently it became exponentially easier for the average person to invest by way of the advent of the personal computer now you can do that same thing from home without having to call billy but it's nothing compared to today now with all of our smartphones everyone can quickly and easily download an app and begin investing in as quickly as a few minutes or as long as a few days overall investing has become more simplified and more affordable back in the day there were really high fees for these brokerage firms like the one that billy worked at due to the more labor-intensive work that it took for you to actually invest in something nowadays there are very few actual humans who are involved in your investing so those fees have dropped drastically in fact more and more brokerage firms which a brokerage is just the company that you invest through are waiving their management fees all together this is great for people like you and me because it means that we save money we keep more of our gains and overall that money is left to compound and grow so these new technologies have made things more affordable accessible efficient but they haven't always helped ensure that we actually make the best decisions if you're a millennial or in the gen z then you're likely really familiar with robin hood or if not that's fine too robin hood almost single-handedly pioneered this zero fee investing game that now everyone is doing and it was a really big deal robinhood also pioneered this kind of new easy to use design for their app and their service in general and no one was doing that at that time it was a really big deal and felt like it made things a lot more approachable to the average person now a lot of different services are mimicking or getting a little bit closer to something like robin hood but significantly robin hood is not my recommendation for an easy to use great investing app for beginners and i'll tell you why a little bit later other newcomers in the investing game that are really popular especially if you watch personal finance channels like mine or graham stefan or andre jick or any of the the big popular guys they promote things like m1 finance and weeble as well in the meantime those older more established brokerages from back in the day have caught up they've developed their own apps they've made things a lot more approachable they've reduced fees and now it feels like everyone is a little bit more on a level playing ground than they were five or ten years ago so why don't i recommend robinhood as the best investing app for beginners as simple as robinhood is the way it's designed actually encourages bad behavior so when it comes to investing overall you will by the numbers not by one or two stories of someone you see online or some guy you've talked to in line at subway overall less trading should make you more money and the problem with robin hood is it encourages you to trade this is the way i feel about the way robin has been designed and the fact is that studies have shown that human nature generally leads us astray and we typically make unwise and impulsive decisions that decrease the performance of our investments over the long term in my opinion a new investor doesn't need that kind of temptation and frankly any investor doesn't really need that kind of temptation first off whenever you start investing with robinhood it essentially loans you money so that you can start investing before the money that you've actually sent them is there it normally takes a few days for money that you send to anybody to actually arrive but robin hood wants to get you right on the ball right away get you that first hit get you excited and so they extend to you alone basically a line of credit so that you don't have to wait and you can pull that trigger and start investing immediately another thing robin hood emphasizes is the day-to-day swings of the market so by default when you open the app what you see is the one-day view of the market return and so what this trains you to think about is more the one-day movements of your stocks and your bonds and your etfs and everything else than it does the long-term view of what these things are doing over more than a day let's say a quarter or a year or five years instead they focus you back on the one day return and what can happen is our human nature can kick in we can get afraid and when we see that our stocks or our investments in general are going down and they're highlighted in bright red and it's very scary because this is our money and we've worked hard for it we can make bad decisions like sell those stocks and sell those investments because we don't want to lose any more money as silly as that may sound to you if you've not done that people do it a lot like it's actually something that is really common but if you see this in a one day view or even a one week or a one month view it doesn't necessarily mean you're doing anything wrong it's just the way that things happen every day they go up and down like a little tiny tiny microscopic roller coaster but whenever you zoom out and you see the view for a year or five or ten years you see that any well-diversified index fund or any great company that has had a great history of performance is going up over the long term obviously no part of the structure of robin hood app or the way it's designed forces anything on you and i am not sure that i can say that robin hood intentionally designed it to force you into trades because why do they care you know honestly you're not paying for the trades because there's no fees so it's not like they're trying to nickel and dime us and make money off of it i think it just has become something a little bit like a game it's entertaining it's exciting i want to make moves i want to make trades i've got this line of credit i can do it now and it becomes this very empowering little green icon in your life that you can do whatever you want with for us to be wise investors over the long term it needs to be more boring than that unfortunately robin hood is just a tool and it's like any other tool it's completely neutral but for me if i'm going to recommend a service to someone who's new to investing i would prefer that it encourages you to do something that's wiser for the vast majority of people than worry about the small day-to-day movements of stock so why not recommend these other new apps like m1 finance and weeble and some of these other ones you might have heard of well some of them are not like robin hood and they're not simplified and they actually are catering to a more advanced investor weeble for example is really not intuitive to use it's not super easy to navigate and it offers this massive amount of information that literally means nothing to most people and i can honestly admit that most of it means nothing to me anyone who's not really well versed in what all these charts and numbers and projections and things mean it's it's just noise and it's confusing and if anything again it doesn't lead us toward making the right decision long term i'm sure there are people out there who utilize all that information and that's great for them but for a beginner it's it's just too much and honestly weeble has become incredibly popular because they're incentivizing people to just get started you have to start an account deposit a hundred bucks and you get a couple of free stocks and that's really incredible i mean they're literally giving you something that is an equity ownership chunk of a company and that's really cool they're giving it to you 100 for free i've done this with friends we've gotten free stocks for referring each other or making deposits and it's it's legitimate you get free stuff but again the platform as far as a place for you to settle into and use for a long time i don't think it's the best honestly m1 finance is probably the next best option for a beginner investor i really like m1 so when you open the app what you see is this pie they use this term my pie which is just the choices of different things that you've invested in and the percentages of those things but it's an easy visual so that you know what you're invested in and you can scroll up and down and kind of see what that stuff is and it's all well and good now it's not as simple as robinhood but it's still pretty simple for me the best thing about it is that it doesn't default back to that one day view it doesn't just loan you money for no reason and basically it's coaching you to want to be diversified to want to not just be all in one stock tesla or microsoft or whatever the end thing is nowadays as you're watching this and overall it doesn't encourage you to make those short term decisions like robinhood or overwhelm you with all that extra info like weeble as good as m1 finance is it still isn't intuitive enough in my opinion for the beginner investor what i'm looking for here is something that has almost no lingo has almost no charts no tickers i want this to be as basic and intuitive as possible to where it's almost easy enough for children to use which is great that means that they've done a good job explaining a relatively complex topic and made it palatable this is what i'm looking for why not these tried and true old-timey companies that have now come up to speed and had their new schnazzy apps made frankly i personally don't have a ton of experience with them because all i've done is most of these new apps gosh i've done a lot of new apps let's see if i can remember them all robinhood weeble tastyworks m1 finance ally invest acorns you already say acorns i think that's all of them that might be all of them and vanguard now vanguard is a tremendous option by the numbers and by their track history they have their own index funds they have very low fees they have an incredible reputation but my gosh the design of their user interface is so archaic and so unintuitive and so bland that i cannot in good conscience recommend it to you if you're a beginner investor vanguard i love you i appreciate you i have several accounts with you but i will not be recommending you to my friends who are beginner investors today i'll share my thoughts on acorns and what makes it possibly the very best investing app for beginners this is not sponsored by acorns i have no affiliation with them first of all acorns is by far the easiest investing app i have ever used it is by far the most intuitive app i've ever used and it gives you only the bare essential information that you need to make great decisions over the long term here's what it looks like when you open the app and here's some of the features first of all acorns doesn't blast you in the face with the day-to-day swings of the market like robin hood this is a really good thing seeing the swings up and down only adds stress it's not something you need to know to live your life today and make wise decisions so don't even show it to me next you don't pick individual investments you basically pick kind of a risk tolerance level with acorns and let them do the rest now at first this was a turn off to me because i guess i'm a little controlling when it comes to what i do with my money and i want to be able to choose what i want but even i just get mixed up in so many different versions of this index fund or that etf or this thing that i should be doing which is the best and honestly as long as you're investing as much money as you can possibly afford after you've paid off high interest debt and after you have an emergency fund i honestly don't think that those last couple of percent of efficiency really matter we need to be shoveling money into these investments into well-diversified low-fee index funds and not looking back acorns is also really well designed and for me what well-designed means in this context is it's not like weeble it feels a little bit more like a social media app or something else that's gone through a lot of development to make it feel really approachable and really logical to be able to get to where you want to get so there aren't a ton of charts there aren't a ton of terms and you're not lost in a sieve numbers it's something that you can pick up as often as a few times a week or as infrequently as once or twice a year and still get to where you want to get you probably want to know what you're investing in how much you're investing in it and how much that investment has gone up or down probably up that's really all we need to know another thing i appreciate about acorns is the emphasis on contribution so it's more important overall that we invest early and as much as we possibly can than picking stocks or picking the exact right index fund like i just alluded to before it of course encourages you to invest which kind of feels like some kind of a salesy thing like somehow acorns will get something out of it and i honestly don't think that they do get something out of it because their fee that we'll talk about later is just a flat fee so it's not like it helps them if you invest ten thousand dollars next year or if you invest two thousand dollars it doesn't help them as much like they don't as far as i understand they don't have an incentive for you to invest more except that you like seeing your account grow and frankly it's a good app to use and why would you not tell other people that they should use it too right that's what they're looking for is more users acorns also really emphasizes a long-term viewpoint so instead of showing you really short-term things it actually projects out into the future and gives you kind of this what do they call it future projections view they're not really concerned with showing you what's happening this month with your investments they want to cast a vision for you to understand if i keep it up at this rate what kind of money could i have in 20 or 30 or 40 years if i keep doing this it's incredible and they want you to get excited about that vision and that consistency over time to watch that money snowball and it makes the chart really interactive too so what you can do is drag around and see well what happens if i increase my contributions or what happens if i let that money grow for a longer or shorter amount of time and it helps you to see that end goal because we need that right we need to know where are we headed what's the point of this it feels like i'm not doing that much i'm only putting in a couple dollars a day or 50 bucks a month or whatever but whenever you see hey that could amount to 75 000 in 20 years wow that's actually pretty exciting because i would i would love to have seventy five thousand dollars why not that's a really good encouraging thing that they do that they've built into the app to encourage you to think long term let's talk about fees so the fees are really simple they're one dollar a month three dollars a month or five dollars a month i'm currently at the one dollar a month level and what this is is just the the basic level so you're able to invest in what's called a taxable brokerage account so this isn't a retirement account i can access the money whenever i want profits i make off of it are taxed like any normal income i would make at my job and that's it it's very simple the three dollar level is getting you access to more things like an ira if you don't already have an ira a roth ira is a really good option for you as long as you're willing and able to let that money sit for at least five years probably more like until you're 60 years old because technically whenever you pull that money out before then you could be hit with penalties now i want to make a video in the future about the intricacies of a roth ira but if you're considering it now and you've stumbled into this video and you really want to know yes you can pull out the money from a roth that you've contributed you can't pull out the gains without getting hit with a penalty but the whole point of a roth is that you leave that money in there until you need it in retirement so it can grow as much as possible if you have to pull it out it's easier to pull out than other options but i would still recommend not planning on pulling it out if you know you need the money in the next five or ten years and you're bound and determined to invest it open a taxable brokerage account with acorns at that one dollar per month level and the five dollar per month level is basically all-in you get all their features you get access to their family investing options if you want to start things for your kids you get to invest in your retirement account you can use a brokerage account basically it opens up their entire slew of services for you if you're a beginner investor you're probably not hung up on one or three or five dollars a month but in case you're doing that math and you want to kind of fact check whether or not that's a good deal depending on how much money you have in there that can end up being kind of a high fee if you only have a hundred bucks in there and you're getting charged one dollar per month well twelve dollars per year out of your hundred dollars is a huge amount i mean twelve percent is like is wild but the point is that as that money grows and the more that you invest the smaller that fee really feels and for me one dollar per month is well worth the services that they provide i think that it's a great deal and it's worthwhile another feature that you get with acorns that maybe you've heard of this because this was kind of the way they marketed themselves early on is this roundup feature now it's nothing that's that revolutionary or that special because you can do one-time contributions just like you would with anything else by the way contributions just mean you sending money to your investment service and they invest the money for you fancy term very simple thing it means you've invested the money so acorns does this thing where you link it with a bank account or a debit account or you know whatever account you want to link up with it and it sees your transactions and it rounds up that little extra amount of money at the end so if you bought something for 550 it rounds up that last 50 cents and it invests that amount you've got options with the roundups to where you can double a roundup or triple a roundup and invest a little more we currently just do doubling our roundups so what that amounts to for us is every week or every couple of weeks somewhere around six or seven dollars gets deposited it's a really basic thing and it kind of feels like a sneaky way to like to hack your own system and trick yourself into investing more and that was honestly the reason why i started investing with acorns because we already invest with 401ks we already have iras and we've got some taxable brokerage accounts that i kind of experiment with and make videos about here in the future but acorns kind of felt like a way that we could sneak in those extra six or seven or eight dollars every week or two and have it kind of feel like oh well we went out to lunch or we kind of impulse bought something it's like the sneaky way like it's almost like a subscription too you know how you have subscriptions to like netflix or even your auto bill pay or things like that and it just like comes out of your account and it's just kind of whatever i wanted that kind of sneaky whatever-ness to be working in my favor and just sneak some extra money into investments for us and it's added up i'm actually really surprised at how much it's added up and it's something that adds up as far as money being taken out of our account in a good way anyway all that to say we never really feel the burn of those roundups they're sneaky enough that they just happen they're invested it's automatic we don't have to think about it if you don't want that you don't have to have it you don't have to turn on roundups you can just choose when you want to invest and only do it in those times overall i think acorns balances the right amount of information and control for a beginner investor to know what they're doing know what they're investing in make those choices and feel comfortable doing it like they're still in control and they know what's happening in an effort to be fully transparent i will show you my acorns account now so whenever i first open it up the option that i see is invest for your future and that's the view for the account that i have the one dollar per month account and i currently have 732 dollars and eight cents in there totally awesome sneakily invested it for me i love it later starts today would be taking advantage of their service with an ira so your retirement account something along those lines later starts today get it spend smarter they have their own kind of what is this thing part of the three dollar per month fee is this card that you can link to your acorns account and essentially use their debit card as a form of payment i don't currently use this because we have other forms of payments and i trust that using credit cards to our advantage will get us more points and more money back in the end but it's an option then finally there's early for kids which is an option like i said before to start investing for your kids in a what's it called in a utma or ugma account basically it's a custodial account for your kid's sake oh as i'm looking at this there's something else that i remembered and it's that whenever you scroll down what you can see is what you what amount you've invested in the last 30 days so we've invested 68 and 92 cents in the last 30 days we've been buying a lot of stuff lately so the more you buy the more it's investing and then it also gives you an option to grow your knowledge and so what this is is kind of their in-app little teaching tidbits about investing and so i love that they put this in here because you don't have to go and search around and try and find a reputable person like me or an article online to try and tell you how to invest because man there's a lot of different stuff out there i honestly really appreciate that they're giving you some good information in here about the basics of investing and about the kind of ways that we need to invest for our overall best performance i keep emphasizing this overall long-term vision because we just get stuck in this trap whenever we get into investing people talk about the stock that they bought that they made a lot of money with or whatever we get stuck in either pursuing these big winners and trying to make a lot of money quickly or we can get stuck because we feel paralyzed because we're afraid if we picked the wrong thing it could plummet in value that'll be a big problem well acorns invest your money in an assortment of index funds and so what this means is that you're not riding on one horse you're not trusting that one company to take you to your destination which is let's make a bunch of money let's let the money work for us and compound and do what we want it to do it's investing in dozens or hundreds of companies which means if one or two fail who cares you honestly don't get it affected that much but how often do you hear about companies actually totally failing i mean it's pretty rare except for welcome to 2020 kids where companies fail and crazy stuff happens all the time but otherwise it's fairly rare like a lot of these companies that aren't doing well have gone down a lot in value but it's not like they've gone to zero it's not like anyone's coming after you for your money because you invested it with this company that's not gonna happen overall you'll have better years and worse years but in the long term again long term your money will be going up in value and that's what we're all looking for you can't leave your money in a bank or in a savings account and expect it to grow obviously it's not going to grow if you keep it in cash so investing is the best option for your money to grow with the least amount of work on your part it is truly passive income truly truly passive that's it that's all i've got hey i realize i probably said things in this video that are not clear especially if you're a new investor i caught myself a couple of times there with using some terms that are dedicated investing terms and for that i apologize i want this to feel like something that you can really grasp and really understand and anything that you didn't understand leave me a comment i literally see every single comment i will read it and i will respond to the best of my ability to try and clarify anything that i've overlooked or done a bad job of explaining and again i have no affiliation with acorns i just want people who are afraid of starting or paralyzed by the complexity of starting with investing to have a way to get started it's incredible whenever you do the kind of math and i don't want to bore you with math here but it's incredible when you do the math of someone who starts investing even with a small amount of money and they let that money grow for a long period of time like 30 or 40 or 50 years how much money they have it's insane and if you're someone who's waited to invest and somehow made it through this whole video because you thought well i'm young i want to keep my money in cash now because i want to go do stuff or i'm afraid of the stock market and you know what i'll invest when i get older because when i get older i will make more money and i'll be closer to retirement so i need to kind of i need to worry about it then and right now i need to worry about me now i want to go do stuff well that's really dangerous thinking because you're actually cutting out the most valuable part of that whole equation which is time i want you to feel equipped to go out and start investing now even if it's just using those little roundups little pennies here and there just get started because it's incredible how much that can grow over time that's all i've got hey thank you so much for watching if this video didn't stir up deep hatred in your heart please tap the like button if it did stir up deep hatred tap the dislike button twice and leave me a comment below stating the flavor of de-hatred that you have if this was helpful for you please consider subscribing or sending the video to a friend but don't turn on your notifications i know that there are people who will tell you to turn on notifications with their videos i don't actually want you to do that because i don't want you to have more notifications coming at you all the time even if it's my video i appreciate you being here using your time to learn and to get yourself set up to invest but i don't need to interrupt your day whenever these uploads happen doesn't need to buzz you in your pocket so don't turn on notifications protect your time spend time with those people that you love that are nearby and yeah have a great day thanks for watching appreciate you all see ya oh

Channel: Brendan Fitness and Money

Views: 357,514

Rating: 4.9013352 out of 5

Keywords: The Best Investing App For Beginners in 2021!?, best investing apps, robinhood app, brendan fitness and money, how to invest in stocks, acorns review, m1 finance review 2020, how to invest in stocks for beginners 2020, stock market investing tips for beginners 2020, investing for beginners stocks, best free investing apps for beginners, acorns app review 2020, how to build wealth in your teens, stock market investing for beginners and dummies

Id: -owDfS3Q7kc

Length: 24min 0sec (1440 seconds)

Published: Wed Nov 11 2020