If you are a college student or a recent graduate that wants to begin investing NOW, this is the post for you. If you’ve been in the workforce for a while but don’t have a large amount of cash set aside to invest, this is the post for you! Today you will learn how you can start investing with as little as $5. If you’ve read my Top 5 Investing Sites post, then you’ve already seen most of this material. If not, I am about to introduce you to two different ways that you can invest with only $5.
Acorns* is an app that is a robo-advisor, meaning that it will manage your investments for you. If you’re in college, you need to open an account with them TODAY! Why? Because they will manage your account for FREE as long as you sign up with a .edu email address.
When you open your account, they will ask you basic questions about things like projected retirement age and risk. Based on your answers, they will come up with an investment strategy for you in seconds. That’s it! You’re on your way to investing. Next, you will need to link your bank account to your Acorns account and make a deposit of $5. They will distribute your deposit across various investment instruments including, but not limited to, stocks and bonds. It is a very hands-off approach that I believe is great for beginners.
They also offer the “Round Up” tool that allows you to link your debit and credit cards to your account. When you make a purchase for $2.50, it will round up your purchase to the nearest dollar and invest the difference. Your $2.50 purchase will be rounded up to $3 and that extra $.50 will be added to your Acorns account to be invested. This element makes the experience even more hands-off and allows you to invest effortlessly on a daily basis. You have the choice of either automating this feature or depositing the differences manually within the app.
*By using the Acorns link above to open your account, Acorns will deposit $5 into your account as well as mine
Stash is similar to Acorns in that it allows you to begin investing with only $5! However, it’s different because it allows you to choose what you want to invest in. It gives you a list of conveniently nicknamed ETFs to pick from and you select what YOU want to invest in. Stash will provide you with the tools, tips, and guidance to teach you how to invest on your own. It only costs $1 a month to invest with them if your account is worth less than $5000. It costs .25% of your account balance per year if your account is worth more than $5000. Stash also offers Stash Retire, which allows you to contribute to a Traditional or Roth IRA.
If you’re looking for a robo-advisor or are a college student, I’d definitely go with Acorns. Also, I’d encourage college students to use Acorns as a savings account while it is still free. You are able to deposit and withdraw money as you please and your earnings will likely be greater than the small interest rate you will receive with a typical savings account. If you are not a college student, it costs $1 per month for accounts under $5000 and charges .25% annually on accounts over $5000. If you’re looking to choose your own investments and learn a little bit about how to do that, Stash is the place for you.