Are investing apps worth it?

Are investing apps worth it?

Investing apps like Vanguard, Acorns, TD Ameritrade, and others are generally worth it if you want to invest. Investing is one of the best ways to build wealth and each investing app can help you save for your future.

Imagine, being able to check your investments from your phone during your lunch break at work. Some investment apps even help you stash away extra cash without you even having to think about it.

However, it is important for you to choose the right app.

Luckily for you, I’m going to show you how to determine if an investing app is right for you. I’ll even show you which investing apps are safe to help you make a decision. Investing shouldn’t feel like a chore and investing apps make it easier for anyone to invest.

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Are investing apps worth it?

Investing apps are generally worth it because they help novice investors invest regularly. However, investing apps also pose risk by allowing amateurs to invest without proper knowledge on investing. Therefore, it is important to use these apps wisely and only invest in what you know.

The biggest benefit to an investing app is the ease at which you can invest. It is extremely easy to open a brokerage account from the comfort of your own couch.

Personally, I was able to open up my Robinhood account from my phone. I was then able to transfer money from my bank account and buy my first stock. Seriously, it could be easier.

Robinhood even helped pave the way for commission free trading. It used to be that your brokerage would charge you a large fee for each trade that you did. How is anybody supposed to make any money if you’re only investing $100, but the brokerage takes $10? 

But now, anybody can be eating a bag of Doritos and buy shares in Pepsi. Investing with apps are so easy, you have no excuse for not using them.

The downside of investing apps is the ease in which you can execute trades. Because it’s so easy for you to trade shares, novice investors don’t buy and hold stocks. Instead, investing has become a game which isn’t good for anybody.

The more you buy and sell, the less likely you are to actually make money in the stock market. Therefore, investing apps are great for those who just want an easy way to invest money long-term.

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What is micro investing? 

Micro investing is the process of investing small sums of cash and purchasing fractional shares. Instead of buying the whole share out right, you are only purchasing a fraction of the share. Some investment apps like Acorns are built on the foundation of micro investing.

For example, you go to the grocery store and your total rings up $30.54. Acorns automatically round your transaction to $31 and invest the $0.46.

You probably aren’t going to build massive amounts of wealth through micro investing. After all, a 10% return on investment on $3 is only $0.30. In order to make significant gains in your investment portfolio is to have an investment strategy.

You need to make a concerted effort to invest regular increments every single month to build real wealth.

However, micro investing apps aren’t all bad. Micro investing is just one more method to help you reach a better future. However, you shouldn’t rely on micro investing only to help you build wealth.

For example, you might make an effort to invest $300 per month in a Vanguard account. While you’re using that Vanguard account, you are also using acorns to invest just a little bit more. 

Are investing apps safe?

Most investing apps are safe to use, but you still need to do your due diligence before signing up with any investing agency. Verify the company is a legitimate investment broker and that they are listed with the Securities and Exchange Commission (SEC). Understand your personality type and know that you will be an investor and not a gambler.

There are  two main concerns when it comes to investment apps. Is the app a legitimate company and are you able to invest responsibly and with informed knowledge?

Any legitimate investing company should be registered with the Securities and Exchange Commission. You can also see if they are listed on the Better Business Bureau’s website.

As a rule of thumb, I don’t put my money with any investment company I haven’t heard of before. I never want to be the first one using a new investment broker. Personally, I like to give new brokers a few years so I can observe from the outside.

The other thing you need to consider is yourself. Are you a responsible enough individual to make an informed decision about your investments?

Remember, you can always find a financial planner who can manage your investments for you. You do not have to manage your own investments if you’re not comfortable doing so. However, I do recommend you learn about investing as much as possible.

The last thing you want to do is put your life savings into the stock market and not know what you are doing. People have put in their entire life savings into one stock only to have it go bankrupt.

What are the best apps for investing?

The best investment apps for investing include Vanguard, TD Ameritrade, Robinhood, E-Trade,  and many others. Robinhood is great for new investors because the app makes for easy buying and selling. Vanguard and TD Ameritrade take longer to familiarize, but are good for long term investing.

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Summary: Are investing apps worth it?

As you can see, most investing apps are worth it. However, you still need to make sure the app is legitimate and you can handle self investing. One of the biggest risks to new investors is not understanding how to properly invest.

Investing apps have made it easier for most of us to invest. However, easier access also makes it easier for us to trade frequently or without a particular goal in mind. The majority of investors would be better off simply buying and holding for the long term.

Micro investing invests small sums of money. For example, Acorns rounds your purchases to the next dollar and invests the difference. Micro investing won’t make you rich, but it can be a part of your overall investing strategy.

Some of the best investment apps include Vanguard, TD Ameritrade, Robinhood, and E-Trade. Each platform brings their own strengths and weaknesses, so it’s important to see which app meets your investment preferences.

John is the founder of TightFist Finance and an expert in the field of personal finance. John has studied personal finance for over 10 years and has used his knowledge to pay down debt, grow his investment portfolio, and launch a financial based business. He is committed to sharing content related to personal finance based on his experience in his career, investing, and path towards reaching financial independence.