There are many ways to make your money work for you. When it comes to saving, it’s good to think about your every move as an investment for your future. A recent Charles Schwab study found 26% of people who have a 401(k) said they would “rather live well now than save for an uncertain future.”
The study also showed investing in an IRA to prepare for retirement was preferred compared to other types of investment accounts.
But before you make a decision, you should make sure of your goals. For example, if you want to do a short-term plan, the general rule is to save into cash deposits, like bank accounts because the stock market might go up or down in the short-term and you might make a loss over the short period.
For longer-term goals, you may want to consider investing because inflation can seriously affect the value of cash savings over the medium and long-term. The stock market tends to do better than cash over the long-term providing an opportunity for greater returns on any money invested over time.
You can lower the level of risk you take when you invest by spreading your money across different types of investments. This is called diversification.
· Savings Account
· Liquid & short term debt funds
· Post office schemes
· Insurance plans, etc
· Long term debt fund
· Debt oriented& Equity oriented Hybrid funds
· Direct Equity
· Equity funds
· Real estate
When it comes to investment, online investment apps that have become more and more popular in recent years may become a good choice.
“two of the primary reasons why I abandoned savings accounts for an investment app are that they have a guarantee of higher returns plus the fact that they are easy to use, with others leaving room for expert management at low fees,” said Edith Muthoni about why she abandoned savings accounts for investment apps.
You should be aware that, however, even safe investing isn’t a guarantee on a return, so your money might simply disappear, even though you’re saving it. Investment apps can also lead impressionable investors down the wrong path without some guidance, before ever saving a dollar in an emergency fund. It’s really easy to open an account with these apps, easier than going through the research process.
Therefore, “using an investment app while simultaneously using a savings builder app and program that rounds up and automatically transfers money to a savings account” is suggested in this regard.
Experts recommend you set goals and track the progress. You are suggested to start by putting small amounts until you get to understand it well. Some also suggest that do not check your investment regularly because the short-term fluctuation is quite normal. Since every loss may trouble you and you should just leave it alone. You can check once a month to make sure nothing serious happens.
According to an article posted on Review, some investment apps are referenced below:
Robinhood: A real-time commission-free platform for buying and selling stocks and exchange-traded funds (ETFs) that go into a taxable investing account. You can schedule recurring deposits if you want to but bear in mind that the ease of trading could make you rush your decisions more than you should.
Acorns: Usually recommended for students since they offer it for free, this app links with your credit and debit card and automatically invests your spare change by rounding it up to the next dollar on every purchase. Based on your risk profile, it offers to invest in taxable investment accounts and IRAs.
Stash: Recommended for beginners, this app allows you to invest in taxable investment accounts or an IRA, starting with as little as $5. It offers a variety of plans, depending on what the users are willing to invest and what they want to do with that money. The Stash app allows users to unite investing, banking, and savings, and learn while using it.
M1 Finance: Recommended for those who like the idea of automated investment with automatization based on the information you provide. But it also allows you to choose stocks and ETFs. You don’t need to transfer any money into your account to start, but you can set up recurring deposits to invest.
Ellevest: Designed specifically for women, Ellevest allows you to invest in taxable accounts and IRAs, including traditional, Roth and simplified employee pension (SEP). This investing tool uses algorithms tailored to variations such as gender (yes, if you are a man you can use it as well) and salary. This app offers financial advice and direct management for its users.
1. Make sure your goals (short-term or long-term)
2. Check the features and hidden fees before you make an investment through online investment apps
3. Start by putting small amounts and do not check it too often
4. Make sure diversification to avoid losing all