Do you invest?
If you’re a young person, chances are, probably not.
Only 37% of Americans under the age of 35 are investing in the stock market, according to a 2018 Gallup poll. That means nearly two-thirds of us are not.
Why? Gallup hypothesizes it’s because we grew up during the 2008 crash. We saw people around us lose it all — and now we’re hesitant to take that same risk. Instead, we’re turning to safer investments, like savings accounts and CDs.
Yes, these are less risky options and will help grow your money over time; however, they won’t reap the same financial benefits as stocks.
If you’re not yet investing and are looking to gently wade in, we’ve rounded up a few options to help you overcome your fears.
1. Dip Your Toes in Stocks With ETFs (and Get a $5 Bonus)
Before fully committing to buying stocks, you can own portions of them with exchange-traded funds (ETFs). Basically, you’re buying a piece of a company’s stock — rather than the whole shebang. This makes investing more affordable and tends to be slightly less risky, since you’re not putting all your eggs (money) in one basket (a stock).
Not sure where to get your hands on ETFs? Consider starting an investment account through Acorns.
Start with $5, then stack up change over time with its “round-up” feature. That means if you spend $10.23 at the grocery store, 77 cents gets dropped into your Acorns account.
Then, the app does the whole investing thing for you.
The idea is that you won’t miss the digital pocket change, and the automatic investments stack up faster than you’d think. For example, Penny Hoarder Dana Sitar was able to invest at a rate of $420 a year. That means you could set aside $1,000 in about two and a half years — without trying.
The app is $1 a month for balances under $1 million, and you’ll get a $5 bonus when you sign up.
2. Back Companies Committed to Good (and Get a $50 Bonus)
Before you start investing, ask yourself: Have you carefully considered which companies you’re willing to back? Their morals and values? You probably wouldn’t want to invest in a company that’s destroying our oceans or cheating the system.
With Swell Investing you can invest in companies that are committed to clean water, zero waste, renewable energy or disease eradication, to name a few.
Plus, when you invest $50 in one of these companies, Swell Investing will match you with a $50 bonus! Just use the code PENNY after making your initial investment.
Swell Investing is an SEC-registered investment adviser committed to supporting sustainable companies. Its Impact 400 portfolio features companies whose products and services align with the United Nations Sustainable Development Goals. It considers everything from gender equality to ending poverty to clean energy.
Swell doesn’t have any trading fees, price tiers or expense ratios. It charges a 0.75% annual fee — that’s about the cost of one coffee ($3.75) per year if you invest $500.
Get started with Swell by signing up with your email address here.
Disclosure: We have a financial relationship with Swell Investing LLC and will be compensated if consumers apply for an account and/or fund an account with Swell through links in our content. However, the analysis and opinions expressed here are our own.
3. Explore Real Estate Investing — With $500 and Your Computer
Want to try real-estate investing without buying a home or playing landlord? We found a company that helps you do just that.
Oh, and you don’t have to have hundreds of thousands of dollars, either. You can get started with a minimum investment of just $500. A company called Fundrise does all the heavy lifting for you.
Through the Fundrise Starter Portfolio, your money will be split into two portfolios that support private real estate around the United States.
This isn’t an obscure investment, though. You can see exactly which properties are included in your portfolios — like a set of townhomes in Snoqualmie, Washington, or an apartment building in Charlotte, North Carolina.
You can earn money through quarterly dividend payments and potential appreciation in the value of your shares, just like a stock. Cash flow typically comes from interest payments and property income (e.g. rent).
(But remember: Investments come with risk. While Fundrise has paid distributions every quarter since 2014, dividend and principal payments are never guaranteed.)
You’ll pay a 0.85% annual asset management fee and a 0.15% annual investment advisory fee.
So you see? Investing isn’t that scary. Start with baby steps, then you’ll be rolling around in stocks in no time!
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. She, too, was nervous to invest until she started exploring ETFs.