If you are young or old, it is never too late to start investing. The younger you are when you start the better off you will be. Yes, time is valuable when it comes to investing as compounding works wonders on your portfolio’s value. In this post, we will examine four platforms that allow you to save with as little as $5. Yes, you read that right on these platforms, you can start investing in bonds, Exchange Traded Funds (ETFs), or individual stocks. Have I got your attention? I hope so, and with that, let us get started.
Worthy Bonds
For those of you who are risk-averse Worthy Bonds is an excellent place to look. I have been investing in these $10 bonds since late December 2019. They pay 5% interest compounded daily on the value of your portfolio, and when your interest reaches $10, they will purchase you another bond. To buy these bonds, all you need to do is link your checking account to the platform, and then you can start buying these great bonds.
The bonds are sold to small and medium-sized businesses and collateralized with assets worth more than what the business borrows. This action makes these bonds extremely safe for the average investor. The 5% interest rate is fixed for the life of the bond, which is 36 months. But here is the best part of the Worthy Bond program, you can buy $10 bonds whenever you want, set up automatic purchases, have roundups based on your checking account, and cash out at any time with no penalties.
Now in full disclosure, the following link will take you to the Worthy Bond site and allow you to open an account. It will also provide you a free $10 bond when you open your account and keep it active for 90 days, and it will also give me a $10 bond as well. That is free money to both of us and who wants to pass up free money? To learn more about Worthy Bonds and open an account, go to https://worthybonds.com/?r=Fldji.
Acorns
Acorns is an app that allows you to open an account with as little as $5 to purchase a select group of ETFs. I used this app for a while a few years ago, and it is good and offers a decent service for a relatively small fee. The primary way it works is by linking your checking account to the platform and then selecting recurring investments or link credit cards and have round-ups invested based on their purchased but taken from your checking account.
When I participated with Acorns, they had brokerage accounts that invested in high-quality ETFs in a brokerage account that charged $1 a month in fees in addition to the ETF fees. Not a bad deal, but for small investors that are not adding a decent amount of funds to their account, it can eat into your portfolio’s value. This service is now labeled as the Lite option.
A newer feature that I am not that familiar with seems a little more exciting on the Acorns platform. This is called Personal, and it costs $3 per month to have an account. But unlike the Lite platform, the Personal allows for a brokerage account, a checking account, and a retirement account. Through the Spend feature, you are provided a checking account and debit card that has reimbursed ATM fees and offer up to a 10% bonus on those roundup investments.
To learn more about Acorns, simply download the app from your phone’s app store or visit https://www.acorns.com/.
Wealthfront
Wealthfront is a platform I have not used, but it has been active and prosperous for many years. It started out investing in high-quality ETF based on a risk tolerance profile you filled out. Like Acorns, it has evolved a great deal. The platform has moved from only offering a selection of ETFs for a brokerage account to now offering retirement accounts and 529 college saving plans.
The fee structure on Wealthfront is 0.25% annual fees meaning that it is a good bargain when it comes to fees charged, and those are in addition to the minimal ETF fees. They do require a larger minimum to open an account with $500. They do offer a savings account that can be opened with $1, and it pays 0.35% interest on the balance, and there are no fees for the savings account.
To learn more about Wealthfront, please visit https://www.wealthfront.com/.
Charles Schwab
This is a company I have known for many years but recently read the autobiography by Charles Schwab and decided to do some more research on the company. And what I found was an outstanding company that does have the small investor in mind when it comes to what they offer. If you want no fees, they are the place for you if you want brokerage accounts, retirement accounts, or even to invest in foreign markets they have what you need. While those accounts do not have minimums to open, you do have to purchase full shares in the US markets, and there are lot size limitations on the foreign accounts.
But I recently found that they offer individual stock purchased for as little as $5 for the S&P 500 stocks. Yes, you can buy fractional shares through Schwab and start with as little as $5. This is by far the best deal when it comes to the investment companies for stocks as it allows you to buy fractional shares of individual stocks and not limit you to ETFs, all with no fees. And you are allowed to buy up to ten different stocks at one-time. That means you can develop a ten-stock portfolio at a minimal cost to you.
To learn more about this feature of Charles Schwab, visit https://www.schwab.com/fractional-shares-stock-slices and to learn more about Schwab’s other financial products visit https://www.schwab.com/public/schwab/client_home.
What are your thoughts on these options for investing? Please feel free to leave a comment below or email me directly. And as always, if you need assistance, reach out to me or seek out the assistance of a fee-only Registered Financial Consultant.
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