How to Start Investing with $500 or Less Using Robo Advisors

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How to Start Investing with $500 or Less Using Robo Advisors
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How to Start Investing with $500 or Less Using Robo Advisors

Many people assume they don’t have enough money to invest. They figure $500 is nothing and won’t get them anywhere. 

What if it could?

What if using robo advisors, you could invest with just $500 and turn it into so much more? What if you don’t need to be rich to invest and that anyone could start if they give it a chance?

This help guide on Robo-advisors is useful.

It seems overwhelming, but when you break it down, it’s not as overwhelming as it seems. Here are the top apps to help you invest with $500.

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8topuz robo advisor

At 8topuz, we also allow you to get started from just $500. We’re an AI-based platform that makes it easy to invest money even if you do not understand how the market works.

Our platform was created with the ‘basic’ investor in mind. Our founders wanted a platform that appealed to the masses, not just the rich or experienced investors. It’s free to get started and we make it easy to manage your investments – all you have to do is determine if you want your investments to grow or you want to withdraw.

You don’t have to understand trading or learn about it – set up your account and your well on your way to growing your investments the way you hoped. You may learn a little about investing along the way, but we have your back the whole time.

Betterment

Betterment was one of the first robo-advisors to make investing easy for anyone. With no minimum required deposit, you can start with next to nothing. If you want your money to grow, though, you’ll need to invest some money.

Betterment is easy to use. Once you answer their basic questions, they set up a portfolio based on your risk tolerance and goal timeline. Betterment automatically rebalances your portfolio and is mindful of tax liabilities when making trades.

Acorns

Acorns is a robo advisor that showed us you can invest with just spare change. It sounds crazy, but Acorns makes it possible.

Once you sign up for an account, you link your most used debit or credit card to Acorns. Every time you make a purchase, Acorns rounds it up to the nearest dollar, sweeping the spare change into your Acorns account. 

Once you have $5 accumulated, Acorns invests the funds for you based on your risk tolerance and goal timeline. It’s one of the easiest ways to invest without thinking about it. You won’t even feel like you’re sacrificing or even putting money away because it’s literally spare change.

To increase your investments, you can contribute regularly to your account or contribute one-time investments to grow your portfolio.

Wealthsimple

Wealthsimple’s slogan is ‘get rich slow,’ which is perfect for investors starting with $500. Wealthsimple gets you started with only a little money and shows you how the money can grow. They perfectly combine technology and human assistance so you don’t feel like you’re dealing with a robot when you have big questions that need answers.

With Wealthsimple you can put your investing on autopilot and even set up a high yield savings account to keep some of your investments liquid for unexpected emergencies.

Stash

Stash is another micro-investor. You need just $5 to start – anyone can invest here! Stash allows investors to invest in fractional shares, which means you can buy a part of one share if you don’t have enough to buy a full share. For example, to invest in Amazon but you only have $50, you can buy a part of one share and be a part of the crazy growth.

Stash offers taxable and retirement accounts and offers a Stock-Back card, which is like a cash-back Visa card, but instead you get paid in stock to further your investments.

What to Look for in Robo Advisors

Before you choose a place to invest your $500, think about what you want out of the app. All the apps above invest your money, but they each have different features. Ask yourself:

  • What are you saving for? If it’s retirement, look for a platform that offers a tax-deferred account. You’ll reap the rewards now and pay taxes in retirement. If it’s a shorter-term goal, a taxable account is necessary so you can access the funds early.
  • What’s your risk tolerance? Each platform invests in different assets. ETFs are most common, but some invest in stocks, currencies and bonds. Even with ETFs, what would happen if you least 10% or more of your portfolio? Could you handle it? Do you need a platform that automatically rebalances for you?
  • How do you want to contribute? Do you need automatic contributions set up so you don’t have to think about where your money’s going? Will you make manual contributions or do you need an app like Acorns that sweeps your spare change into your account?
  • What’s the cost? All platforms have a cost, even those that say they have $0 commission. There’s a fee hidden somewhere. Make sure you look at the big picture so you understand.

Choose the Robo-Advisor that’s Right for You

No two investors will have the same needs. Figure out which robo-advisors will help you reach your goals and use it. Don’t follow what everyone else does – focus on your big picture.

If you want an account that allows you to open both a taxable and tax-deferred account, keep that in mind as you look around. 

Robo-advisors makes it easy to invest even if you only have $500. Everyone has to start somewhere and the earlier you start, the quicker you can compound your money. $1 saved today is worth more money tomorrow, and the next day and the saga continues.

Don’t wait any longer. Invest money today, even if it’s just $500 and watch how fast your money grows with compounding and regular contributions. It’s time to take control of your financial future today. 

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