Choosing An Investment Platform. Part 1.

So far at here Dynalect, the biggest thing we’ve been focused on is which securities offer the best opportunities for young investors. While that’s certainly important, I would like to take a moment this week to articulate how to invest money once you know what you want to invest in. Some questions to consider might be: Who are the best stock brokers? Which brokers offer the lowest fees? What service is the easiest to use?

Introduction

The importance of saving money is a well-articulated concept that most parents try to teach their children from a very young age. I can remember from my own early childhood that my parents periodically required me to save 50% of all the money that I earned as part of an attempt to teach me responsible financial habits. I say periodically here because I fought them as hard as I could to keep as much money as possible, which meant that I only followed the 50% rule when they were especially keen on enforcing it. As a young entrepreneur who was always eager to make a little extra spending money, I had all kinds of schemes going at any given time to turn a profit, and the thought of sending half of all of my money to the bank instead of spending it on more Yu-Gi-Oh! Cards obviously displeased me.

As I have become older and more mature, my attitude towards savings has changed dramatically. And according to Forbes, millennials are already excellent savers, likely thanks to the lessons we learned from our parents as children. A recent survey of 305 millennials aged 25 to 35 shows that 85% of us have at least some savings, and 60% of us are already saving for retirement, which is up significantly from the same figure in 2014 (51%). While I certainly encourage these savings habits, the same Forbes article cited above highlights the fact that millennials have a significant gap in their financial literacy when it comes to investing.

Investing, especially in the stock market, is one of the best ways to “put your money to work” instead of just letting it sit idly by in a bank account. Especially in the modern context, where interest rates on a typical savings account are effectively 0, it’s hugely important for millennials to have a basis of investing knowledge and the ability to put that knowledge to work to make the most out of their savings. The core mission of Dynalect is to synthesize information and present it in a way that makes it easy for millennials to make smart long term investing decisions; indeed, anyone can head over to the Holdings page of our website to see what Dynalect is invested in and build a portfolio based on our extensively researched stock picks.

But once you’ve decided which stocks you want to invest in, where do you go from there? Most of the investment platforms out there like ETrade and Fidelity can be intimidating for a first time investor, and are often very difficult to navigate for someone unfamiliar with their services.

For this reason, I wanted to take a moment this week to highlight 2 of the services that we, the Dynalect team, use to invest our own money. We have scoured the internet searching for low cost ways to take advantage of hundreds of financial instruments that play a key role our long term financial strategy, and I would like to share a few of them with you here:

Robinhood

The first and perhaps the most important is Robinhood. Robinhood is an incredibly easy to use investing platform that allows you to purchase domestically traded securities without paying transaction fees. Trading fees can add up quickly for people who are interested in taking a more active role in managing their portfolio, but with Robinhood, you can make 100 trades a day and still end up with $0 worth of fees for using their service. All of the members of the Dynalect team use Robinhood to trade their own personal portfolios, and we highly recommend it!

Acorns

The second is Acorns is a more passive investing platform where users simply deposit their money into an account, set a desired risk level, and then let the financial managers at Acorns do the rest! The Acorns platform invests your money throughout a satisfyingly diverse portfolio, which includes private and public bonds, and stocks of all types. The app also has all kinds of neat features that millennials are certain to like such as allowing users to link their credit or debit card for the sake of rounding up each purchase to the nearest dollar and investing the change. Acorns is free for college students, and then only 0.25% annually for accounts over $5,000 and $1/month for accounts under $5,000.

What are your thoughts?

The team at Dynalect is always looking for new ways to invest our money creatively. If you have any ideas or suggestions, let us know! Otherwise, stay tuned for more information about attractive services that we can all use to invest our money for a more healthy financial future. Until next time…

Kristian Gaylord

 

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