While many people choose to work directly with a financial planner to do their investing, the opportunities for individuals to invest online have been growing rapidly.
Whether it is brokerages, robo-advisors, or new apps, there are more investment options now than there have ever been for the small investor.
Quick Navigation
Top 10 Online Investments
There are increasingly more sites and apps, making it easy to invest. These are my top 10:
Betterment
Betterment has established itself as one of the leading robo-advisors in the United States. They make investing in the stock market a hands-off approach and handle all the investing and rebalancing for you.
- Best done for you option
- Utilizes tax-loss harvesting
- Betterment review
Fundrise
Getting into real estate investing takes a lot of money and knowledge of the industry. That is until Fundrise made it work like a mutual fund.
Instead of buying and selling real estate on your own, let Fundrise do the investing for you while you take advantage of diversifying away from stocks.
- Invest in commercial real estate
- $500 initial investment
- Fundrise review
Worthy Bonds
Worthy takes the money you invest and lends it to small businesses in the form of a secured bond. The bonds are secured mostly by inventory that can be sold for a profit should the business owner default on the loan.
- Minimum $10 investment
- 5% return on investment
Personal Capital
Personal Capital gives you a place to organize all your financial accounts. They then make recommendations of how you may want to increase your earnings.
Once you reach $100,000 in assets, they will get you started with an advisor.
- Free to start
- Organizes your finances
- Personal Capital review
Ally Invest
Ally Invest made their name as a full-featured, low-cost brokerage account. Since the entire industry has gone no fees on trades, they offer one of the best platforms to do your investing.
- Best full-featured brokerage
- No minimum investment
- Ally Invest review
M1 Finance
One of the first brokerages to offer no-fee investing. M1 Finance makes investing in ETFs and stocks very easy and is a great place for those getting started with investing.
- No Fees
- $100 minimum deposit
- M1 Finance review
Acorns
Acorns makes investing easy by rounding up to the nearest dollar what you spend with your credit or debit card, and investing it for you.
- Automatic investing
- No initial deposit
- Acorns review
Robinhood
Robinhood helped revolutionize stock investing with free trades. Their app is user friendly and makes investing easy for anyone.
- Free to start
- No account minimum
- Robinhood review
Wealthsimple
Wealthsimple is one of the top rated robo-advisors in the United States and Canada. They compete directly with Betterment and have a very useful interface.
- Easy to start
- No minimum deposit
- Wealthsimple review
How to Choose an Online Investment Company
When you choose a company to use for investing, it is going to depend on each investor. If you are getting started and wondering which direction to go, the factors you need to think about include:
Risk
How much risk are you willing to take?
If you are young with an extended timeline for needing your investment, then a high-risk strategy is what you want. For those closer to retirement and ma need their money, low risk is the way to go.
This is one of the reasons that Betterment is at the top of my list. They give you a short survey that assesses your risk tolerance. If at any time you don’t feel comfortable, you can retake the survey, and your investments will adjust.
If you want to get into more low risk investing, then Fundrise or Worthy Bonds are going to be your best bets. Since tangible assets back both investments, it will be difficult for either of them to lose money.
Worthy is particularly safe because your money is not locked in for any period of time, and the assets that secure their bonds are worth more than the loans themselves. The only safer investment would be a high-yield savings account.
Involvement
How much do you want to participate in the management of your investments?
If talk of investing makes your eyes glaze over, then you probably want to look at a more passive approach like mutual funds or robo-advisors.
If investing makes you get excited and your mouth salivate a little, then doing your research and making individual investments on your own could be a good idea.
No matter what level of involvement makes sense to you, the most important thing you can do is make sure you fully understand how your investment accounts work.
This could be as simple as knowing the Wealthsimple has you invested based on your profile or as complicated as know that you have seven different investment accounts across several asset classes.
Diversification
Diversification is an important step in securing your financial future. Not only do you want to be diversified inside of your stock holding accounts, but across other types of investments.
For a hands-off approach example, maybe you choose to use a robo-advisor for your main stock holding account, fundrise for diversification into real estate, and WorthBonds.com for diversification into small business loans.
More hands-on investors could choose their REITs with Ally Invest or even buy real estate properties. However you decide to do it, make sure your overall portfolio continues to grow by being diversified in your investing.
Online Investment Websites I Use
- Betterment – I use Betterment for my wife’s Roth IRA. That way, if anything happens to me, it is effortless for her to maintain the portfolio and continue investing for retirement.
- Fundrise – I want to get into real estate on the local level at some point, but not right now. Fundrise allows me to get out of the stock market and make similar returns without having to own or maintain properties.
- WorthyBonds – WorthyBonds.com is relatively new compared to most of my investments. When I heard I could get a 5% return on my investment with almost zero risk, I knew I had to try it out. It makes sense even as a short term investment strategy.
- Ally Invest – Learning to invest on my own is a big step that I am working on. Ally allows me access to investments that a robo-advisor does not, and the zero and low fees makes them a top online brokerage.
Final Thoughts on Online Investing Sites
No matter which online investing platform you choose, the most critical step is that you choose the right one for you.
This means you need to feel comfortable with the investments available and are going to take full advantage of everything that service offers.
Once you are ready, explore that investment opportunity thoroughly and know for sure the exact path you are going to follow to maximize your earnings.
Leave a Reply