Figuring out how to invest money can be an intimidating endeavor when you don’t consider yourself an experienced investor. Financial terms seem to overwhelm the brain. Roth IRAs, exchange-traded funds, asset allocation — it might as well be another language.
There’s a common misconception that you need to be a financial guru with a lot of money to start investing and saving for your future. But the truth is that you can start making wise financial decisions today that will set you up for later in life — regardless of how old you are, how much money you make, and how much investment knowledge you have.
In this article, we’re going to talk about robo-advisors and how you can use online planning tools to save for your future. We’ll also highlight seven investment platforms that will set you up for success.
What Are Robo-Advisors?
Robo-advisors are financial platforms that provide financial advice and investment management services online with moderate to minimal human intervention.
Instead of having a human financial advisor handle your investment decisions and recommendations, software that’s governed by mathematical rules and algorithms can give you sound financial advice.
These personal finance tools will automatically manage, optimize, and allocate your investments for you.
Why Should You Use a Robo-Advisor?
These tools are becoming increasingly popular because they’re perfect for new investors who are just getting their feet wet in financial investing. They also give people a low-cost alternative to investing.
Online investing platforms are much cheaper to use than a human financial advisor, however, you can also receive some assistance from real financial planners.
With an online platform like these, you can receive some one-on-one financial guidance like setting up an emergency fund, avoiding credit cards with high interest rates, and making sure you have a retirement plan set aside.
Let’s take a look at seven online investing platforms that you can start using to invest your money.
How to Invest Money With a Robo-Advisor
There are many different robo-advisor options out there for you to look into. The seven platforms below are the best we’ve come across.
1. Betterment
Betterment provides online financial services for new investors, hands-off investors, and hands-on investors. The platform takes everything that’s complicated about financial planning and puts it in a simplified and easy to use tool.
Betterment calls itself the smart and modern way to invest. It allows you to easily build your portfolio with little intervention. It also provides licensed experts if you ever need someone to step in and help.
You start by telling Betterment what you want to start saving for. This could be for retirement, a new car, or even a trip around the world. You will also lay out your short-term and long-term goals.
You’ll then plug this information into the tool, and you’ll receive sound financial advice that will help guide your investment decisions. This could be recommendations like how much you should invest upfront and what you should invest in if you expect to hit your goals.
Betterment supports the following investment accounts:
- Individual and joint non-retirement accounts
- Roth, traditional, SEP, and rollover IRAs
- Trusts
- Links with external accounts for further financial advice
Betterment has a $0 account minimum and charges a 0.25% management fee.
2. Wealthfront
Wealthfront is a financial platform that gives you advice on how to manage your savings and enables you to automate your investment decisions.
It takes complex academic research, distills it, and implements it into the investment strategy software. In a way, it’s much better than a human because it follows a strict regimen of time-tested investment principles and proven strategies.
With its passive investment tool, you can build a globally diversified portfolio that keeps your costs and taxes low.
By minimizing fees, lowering your taxes, and managing your risks, Wealthfront helps you maximize your returns.
Wealthfront supports the following investment accounts:
- Individual and joint non-retirement accounts
- Roth, traditional, roll-over, and SEP IRAs
- Trusts
- 529 college savings plans
- Cash accounts
Wealthfront has a $500 account minimum and charges a 0.25% management fee. If you’re interested in signing up, you can head to the Wealthfront sign up page.
3. Ellevest
The Ellevest investment platform is made primarily for women. The platform aims to help women understand their financial goals so they can prepare for their future. Ellevest takes into account the gender pay gap, lower lifetime earnings, and women’s longer lifespans.
The platform has a $0 minimum, but it does charge a 0.25% management fee.
Even though the platform is focused on female investors, it’s still a great choice for anyone looking for a reliable platform that will help their money grow.
Ellevest takes its dedication to female financial empowerment one step further by allowing women to invest in other women. With Impact Portfolios, you can invest in companies that are female lead or promote the advancement of women.
Ellevest supports the following investment accounts:
- Taxable personal accounts
- Roth, traditional, roll-over, and SEP IRAs
Ellevest has a $0 account minimum and charges a 0.25% management fee. If you’re interested in signing up, you can head to the Ellevest sign up page.
4. Swell
Swell has a vision of helping investors like you save for the future while contributing to the companies that are making a difference in the world. Swell exclusively invests with publicly traded companies that are in growing industries dedicated to solving global challenges.
When you invest with Swell, you’ll be investing in industries like:
- Renewable energy
- Green tech
- Disease eradication
- Clean water
- Zero waste
- Healthy living
So how does it work? First, you’ll need to decide what your portfolio will look like. Swell has a list of companies they invest in that you can browse through. Swell doesn’t offer mutual funds, so you’ll have a stake in every company.
You’ll then decide which companies and industries you’d like to invest in. After that, you can easily monitor your investments through Swell’s platform. Then you can sit back and watch your investments grow over time.
Swell supports the following investment accounts:
- Non-retirement accounts
- Roth, traditional, roll-over, and SEP IRAs
Swell has a $50 account minimum and charges a 0.75% management fee. If you’re interested in signing up, head to their website to learn more.
5. SoFi Automated Investing
SoFi Automated Investing is an excellent option for beginner investors who are looking to keep their costs low and prefer little intervention when it comes to their investments.
SoFi is made for first-time investors who are just learning the ropes of investing. The account minimum for the SoFi platform is $100, and there isn’t a management fee for you to worry about.
SoFi allows you to invest in a broad range of low-cost funds, however, its account types can be somewhat limited. They also give you access to financial advisors and career counselors if you ever need an expert’s opinion.
If you’re just starting off, SoFi is a great place to get your feet wet as it’s one of the cheapest investment platforms out there.
SoFi Automated Investing supports the following investment accounts:
- Individual and joint non-retirement accounts
- Roth, traditional, roll-over, and SEP IRAs
SoFi Automated Investing has a $100 account minimum and charges a 0% management fee. If you’re interested in signing up, you can head to the SoFi sign up page.
6. Wealthsimple
Wealthsimple is another platform that simplifies the investment process and makes it easy for first-time investors to start playing with their money. The platform is easy to use and specializes in socially responsible investments.
Similar to Ellevest Impact Portfolios, Wealthsimple lets you put your money in socially responsible investment portfolios so you can invest in companies that are doing good in the world.
The platform will also give you hands-on help from real advisors when you need input from an expert.
The account minimum for Wealthsimple is $0, however, the management fees of 0.40%-0.50% are a little higher than other platforms.
Wealthsimple supports the following investment accounts:
- Taxable personal and joint accounts
- Trusts
- Custodial
Wealthsimple has a $0 account minimum and charges a 0.4%-0.5% management fee. If you’re interested in signing up, you can head to the Wealthsimple sign up page.
7. Vanguard Personal Advisor Services
Vanguard is different from the rest of the robo-advisors mentioned on this list as it focuses on those who are able to meet its high minimum balance of $50,000.
With such a high minimum balance and a 0.3% management fee, this platform is geared toward people who are a little more experienced when it comes to investing.
Vanguard is more of a hybrid option as it gives you the best of both worlds. It allows you to leverage its sophisticated automated investment tool while also giving you access to expert advisors when you need it.
Vanguard is one of the biggest players in this space and is a great option if you can afford it.
Vanguard Personal Advisor Services supports the following investment accounts:
- Non-retirement accounts
- Roth, SEP, roll-over, and traditional IRAs
- Trusts
Vanguard Personal Advisor Services has a $50,000 account minimum and charges a 0.3% management fee. If you’re interested in signing up, you can head to the Vanguard sign up page.
Explore Your Investment Options
There are plenty of investment vehicles out there for you to start letting your money grow. You can play the stock market, put your money in real estate, or open a savings account with a high interest rate.
But one of the best investments you can make may start with one of the robo-advisors mentioned above. Many of these platforms allow you to start investing with any amount of money. Sign up for one of these services and start building your investment portfolio.
