Personal Finance

4 Millennial-Friendly Ways to Invest from Your Smartphone (for $100 or Less)

Expertise: Personal Development, Real Estate News & Commentary, Real Estate Investing Basics
38 Articles Written
Asian woman saving money and dropping coin to piggy

According to a Harris study last year, 80% of Millennials don’t invest in the stock market. Why? Over a third said they don’t know how, some say it’s for “old white men,” and almost half said they didn’t have enough money.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

It’s a sentiment echoed for commercial real estate as well.

There’s also a demographic gap, Douglas Boneparth, a New York City-based financial planner, told CNBC. “The average age of a financial advisor is 55,” he said. “There are more financial advisors over the age of 70 than there are under 30.”

Despite these beliefs, it’s actually easier than ever to get involved with investing, whether it’s companies or commercial real estate through REITs (real estate investment trusts).

Here are four Millennial-friendly options that can get you started on your smartphone, for $100 or less.

4 Millennial-Friendly Ways to Invest from Your Smartphone

1. Stash

Stash is another app that directly targets Millennials with low minimums and easy navigation. You simple choose a portfolio according to your interests.

(As an interesting aside, news recently hit that the app raised $40 million, per Reuters.)

While Robinhood (discussed below) lets you pick and choose the actual company you want to invest in, Stash functions more like an ETF or mutual fund.

“Starting with as little as $5, users can pick from a batch of over 30 exchange-traded-funds curated by the company’s investment team.”

As of today, Stash services 850,000 accounts, with half a million investors joining the platform since January. And get this: Nearly 90% percent of its users are first-time investors, according to Stash.

“We help people who don’t have a lot save money on a weekly basis,” CEO and co-founder Brandon Krieg said in an interview. “Stashers look like America, they look like people you meet every day: they are nurses and teachers and Uber and Lyft drivers.”

Only downside here is that if you don’t add to your $5, fees will wipe out your account pretty quickly. So make sure you add as you go or sign up for the automatic saving option.

  • What: A micro-investment app (iOS and Android) with over 30 ETFs according to industry, sector and risk tolerance.
  • How it works: Download the app and choose your investment.
  • Minimum investment: $5
  • Cost: Fees range from $1 a month for accounts under $5,000 to 0.25% a year.

2. Acorns

close up of hand stacking quarters in various piles

This is actually a pretty cool tool that takes away the headache of investing and automatically does it for you every time you make a debit or credit card purchase, sort of like a mini robo-advisor of sorts.

Much like Stash, users can choose between six portfolios from conservative (mainly bonds) to aggressive (stocks only). The money’s then parked in various index funds managed by big-name money managers like Vanguard and $5.4 trillion juggernaut BlackRock.

Or as the LA Times put it, Acorns “rounds off customers’ credit or debit card purchases to the nearest dollar and invests the difference into stocks and bonds.”

The idea is that while you invest, the loose change goes towards a nice nest egg.

“We’re not trying to preach austerity to the client, because that’s a bummer,” Acorns chief commercial officer Manning Field said. “Some people will say, ‘Don’t have the cup of coffee.’ We’ll tell you to have the cup of coffee and invest along the way.”

  • What: iOS and Android app.
  • How it works: Download the app and choose one of six index funds.
  • Minimum investment: $5
  • Cost: Just like Stash, fees range from $1 a month for accounts under $5,000 to 0.25% a year.

3. Robinhood

Pensive African man sitting in the office at the table making notes in a notebook

A commission-free investment tool targeting Millennials, this Snoop Dogg-backed app launched in December 2014 to allow “average Joes” and young investors to get into the game.

Traditionally, if you wanted to invest you typically had to call brokers at E*Trade or Charles Schwab, companies that charge $7 to $10 fees per trade. (And those fees add up…quickly.)

Built by a 30-year old, the commission-free app has 2 million Millennial users (30’s the average age) with a cool $1.3 billion valuation. According to CEO Vlad Tenev, they’ve saved over $500 million in commissions.

(Here’s a Business Insider tutorial on how you actually use it.)

“Brokerages and banks generally concentrate on how they can make the most money from each customer,” Tenev said in a recent interview. “If you focus on extracting the most value out of a customer, naturally you’re going to ignore everyone but the wealthiest 1% of the population.”

And if you do do it, getting into real estate stocks (REITs, short for real estate investment trusts) actually offers you the quickest and cheapest way to real estate ownership, my personal favorite.

(If you want to get a fast start, here’s Forbes’ list of nine REITs with yields between 8% and 10%.)

  • What: A commission-free investment app (iOS and Android).
  • How it works: Download and start buying stocks.
  • Minimum investment: Whatever stock you want to buy.
  • Cost: Free.

4. Online Advisors & Newsletters

If you do pick the stocks yourself, you have to know which ones to pick—but be careful.

There are numerous, no-name newsletters out there designed to manipulate markets and rip off naive investors with worthless penny stock companies (think Wall of Wall Street) going nowhere fast.

However, once you look beyond the names you’ve never heard of, there are some serious gems out there that can help drive returns—especially if you go the Robinhood route where you pick the stocks yourself.

In doing so, the top newsletters have developed a reputation of predicting trends and produce strong investor yields by uncovering great trades.

Agora Financial’s Technology Profits Confidential is a newsletter that’s gotten play on Wall Street Journal, CNBC and Bloomberg and boasts an average 66.58% gain over the past 12 months.

Editor Ray Blanco says a good financial newsletter is best as an “idea generation source” for new investors, to let them know which stocks to invest in, when, and why.

“It’s also best if the newsletter editor avoids trading in the companies he or she covers, again to avoid any conflicts,” Blanco says. “That’s also what separates a good newsletter from a bad one—conflict of interest.”

  • What: Online newsletters and education platforms.
  • How it works: An investor subscribes and gets advice, articles and recommendations on which stocks to buy, when and why.
  • Minimum investment: N/A
  • Cost: Legit ones range from $99 a year to $79 per month.

What are your favorite technologically-savvy ways to invest? Any interesting apps you’d add to this list?

Comment below!

 

A native of Denmark, Philip came to New York in 2014 with $79 in his PayPal account. In 2015, he joined Bisnow Media (the largest commercial real estate news source in North America) and helped lead them to a $50M sale as National Editor and Director of Content Strategy. Founder of NYEG, a real estate & VC company with $80M in the development pipeline, Philip and his team are currently developing a series of historic projects, including the first black-owned high rise in Jersey City, the first smart home development in Jersey City's McGinley Square, and the first voice-controlled student housing building in Philadelphia. Philip is the best-selling author of Real Estate Wealth Hacking: How To 10x Your Net Worth In 18 Months and an expert columnist for Forbes, Black Enterprise, Entrepreneur and others.

    Account Closed from Philadelphia, Pennsylvania
    Replied almost 2 years ago
    Sounds like pyramid schemes to me.
    Nathan Richmond Rental Property Investor from Visalia, CA
    Replied almost 2 years ago
    I’m a little confused by your comment. Could you explain a little more?
    Rory Chambers from Austin, Texas
    Replied almost 2 years ago
    I looked at acorns but the fees on the investments are above what you’d want to invest in if you’re a millennial (or anyone) because the higher fee will eat into your investment over the decades. Same with stash. People who want to invest without stock-picking should be in low-fee etfs like vanguard directly. If you want to stock pick I’d use robinhood for taxable accounts and vanguard or your broker of choice for retirement accounts. For free stock analysis use Seeking Alpha. Agora sounds like a pump from the author and instead of a trailing twelve-month return look back 5-10 years because outperformance rarely lasts outside of omaha.
    Philip Michael Developer from Brooklyn, NY
    Replied almost 2 years ago
    Rory, thanks for reading. Solid feedback and great pointers. Sure, the fees take a toll but the apps are there to help people get in the game who otherwise wouldn’t be — and they’re great tools for that. As far as free sources, Seeking Alpha is a fine source, yes, but the flip side that everyone can contribute. I mentioned Agora because I personally use it myself and those were the numbers given to me. So yes, that’s definitely an endorsement on my behalf. Forbes has dozens of newsletters, none that I pay for however. Morningstar is a good source as well. Overall, I find the four sources to be instantaneous, affordable and complementary sources to getting into investing. Thanks for the tips! Do you have a broker you could recommend?
    David E. from USA
    Replied almost 2 years ago
    I actually have been using Acorns for about 9 months now. I originally started out using the round up method but I soon realized that I could not keep my check book balanced with this method. After the first month I canceled the round up service and started posting $100 per month instead. Currently I have $987 saved, looking at the history I am currently up about $35 on stocks. This is also the first month that my dividend payouts are higher than my $1 service fee. Once I save over $5,000 they will require 0.25% which will be more than $1. I figure I would need to save $8,000 to cover the costs of 0.25% but this is a great way to save for your next property. there maybe better ways but It’s fun looking at my app to see how much money I made.
    Shawn Kostoff Investor from Wilmington, Delaware
    Replied almost 2 years ago
    I would add Wisebanyan to this list. They allow you to invest based on your risk tolerance and they do not charge any fees. They make their money with the extra services they provide.
    Keith Knobloch Investor from Sioux Falls, South Dakota
    Replied almost 2 years ago
    I work for a financial services organization by day, and am building a real-estate portfolio by night. Although I haven’t checked out any of these apps, there are still people in the financial services profession who are willing to meet with the “little guys” too, and who realize the long-term benefits of treating everyone right, even those without much money right now. While I may not be able to open an account for $5/mo ($50/mo will let you open one though!), I also won’t take 20% of it ($1). I like the idea, the simplicity, and I like their approach to getting people to save and invest, but it’s still obviously about making money for them. Sometimes it’s good just to have a person to walk alongside you in these decisions…and they are out there – for millennials too…just ask.
    Spencer Kingman from Mount Pleasant, Michigan
    Replied 2 months ago
    I'm not sure why M1Finance isn't on the list. I don't believe they have a minimum deposit and there are no fees on investments (they make their money if you have a large balance ($10k, I think) and take a loan against it). This is the service I recommend to everyone, you can set up how you want your investments diversified and it will automatically balance with new money (and/or dividends) and you can force a rebalance (though, in a non tax-advantaged account, it would have tax implications (as there are stock sales)).