I am a college student that's new to investing; what is the best platform to begin investing $100 per month?
I love that you are so young and thinking about investing. As long as you have a long term time horizon and understand that the market doesn't just go up, you could follow Warren Buffet's instructions for his estate and invest in an S&P 500 index fund. Look at Vanguard - S&P 500 mutual fund or ETF. Again, assuming your timeframe is 10 years+ it would be something to consider. Also, look up the concept of dollar-cost-averaging which is what you would be doing by investing $100 per month consistently. Start early with a discplined investment strategy and you will be way ahead of the curve later in life because of compound interest. Good luck!
Great job getting started young! A good way to go with a small monthly contribution is an Exchange Traded Fund (ETF) portfolio that is designed to:
- Diversify risk
- Support your goals
- Respond to your time horizon
Learn more about ETFs here.
One of my favorite apps, and one that I use personally, is Robinhood. It started as just an app, but they now have a website available as well (although I think there is a wait list). Robinhood doesn't have minimums, and there are no transaction fees. Considering you are adding monthly then the no transaction fees are important. The down side here is that they currently only offer taxable accounts. If you are currently working and have income, then given your age you should consider a Roth IRA account. You can open an account at Vanguard once you have saved $1,000, but you may also consider a robo-advisor. Click here for a list of robo advisors that are considered the best of 2018.
Again, since you are adding monthly then you'll want to make sure you are not being hit with transaction costs. $6 a trade out of $100 a month is a 6% hole right out of the gate. Wealthfront and Betterment are two that I have favorable opinions of if that is helpful. Good luck to you!
Dear 20 year old and in College,
The answer to this question is "it depends" on your time horizon, your goals, risk tolerance, life expectations.
Before you learn to invest in the markets, purchase your first home or make any commitment which has lasting and long term consequences make certain you start with a money consciousness transcending all you will do.
This is a multiple step process involving learning about money, learning about savings strategies, learning and gaining insight about you, your family and how money was cared for growing up. Go to Mint.com or like site.
Gain insight from the books you read about investing, not only the patterns and styles of investing also the individuals who invested and how they profited during their tenure as investors in the marketplace both in the stock market, real estate and investing in themselves and their ability to become the controling factor of their personal and long term success- self made entrepreneur. Start a money diary, meet with like individuals.
Learn from great of the greats, Market Wizards, Warren Buffett, George Soros including business moguls Steve Jobs, Oprah Winfrey and Karl Icon. Tesla did not just become a great company nor did Apple. It took dedication, determination and mind set to lead the way to greatness. Then it took dedicated action period.
Understand Investment strategies, savings strategies, trading mentality. Be humble, patient and focus on the long term. This is a life commitment to grow savvy and smart long term. I call it the "tunnel vision approach.
The platforms available to you are diverse including among the many (not in order of importance or worth) E-Trade, Interactive Brokers, Fidelity, Morgan Stanley, Sink or Swim. There are many professing to teach and mentor money consciousness, in the end and at the end of the day the proof is in the pudding- you control.
I run a small group for millennials, college students and eager investors to empower a mindset of saving and automation of finances. I teach basic strategies about how to watch and understand the market, setting up a dummy account, moving forward knowing risk tolerance. My goal- mentor caution, care diligence long term.
Good for you to start now. If you begin with the 100 per month as you say you intend and never allow anything to stand in your way, the power of compounding over the years and over time will allow you to amass a great fortune that will place you in a position of attaining financial independence. Stay on track. Stay focused.
Jan Attard, MBA, RIA
J. Oliver Maxwell, LLC
Glad to hear you’re getting an early jump on investing. At 20 years old, $100/month will really start to add up as the years go by.
There are a lot of different places to take your money, but I’ll recommend two that I’ve used and like. One is Betterment, which is a fairly standard robo-advisor with great options for beginning investors. The company is a fiduciary so you can dictate your general strategy while getting responsible guidance.
I also like LendingClub for a variety of investments, from your IRA to casual lending. LendingClub has been around for a while and is pretty well known, but they still cater to investors who aren’t playing with massive sums of money (I believe you purchase a Note for as little as $25). Financing loans allows you to see your dollars at work in a way that company shares and ETFs don’t, and this strategy offers strong returns on average.
As you start investing, keep service fees in mind. Ideally, you want to invest enough that you’re not losing too big a percentage of your funds to trading fees. Some companies take a percentage of your investment, while others charge per transaction. If you’re buying $100 worth of shares each month and getting charged $9.99 per trade, you’re losing 10% of your investment capital, which is a good chunk. Trading less regularly and in bigger amounts will help offset these costs. Whatever platform you end up using, keep potential expenses in mind. Good luck!