Investing Apps For Beginners, Compound Interest & Getting Started Early

One of the more popular regrets about money from adults is often wishing they would’ve started saving and investing for retirement earlier. Thankfully, in the current financial landscape, the next generation has the power of FinTech and investing apps for beginners to help them get started earlier.

The stresses and intimidation of investing have been alleviated thanks to these services and platforms. Everyday people are able to get started earlier in life in a cost-effective, user-friendly manner.

Why is starting early such a benefit?

Everyone’s financial situation is different and there is no one solution to fit all needs. However, understanding the benefits of starting to invest early and tools available to do that has no constraints.

Whether you start big or start small, often the most important thing is just starting.

This post will introduce the concept of compound interest, 5 investing apps for beginners to help get started early and 4 investing books.

Compound Interest Basics & Rule of 72

As noted above, compound interest was referenced by Albert Einstein as the 8th wonder of the world. The exact quote is:

“Compound interest is the eighth wonder of the world. He who understands it, earns it…he who doesn’t…pays it.” – Albert Einstein.

To help us understand compound interest and why it’s so beneficial to your investing journey, let’s explore the graphic below.

This infographic is from the Pennsylvania State Employees Credit Union (PSECU).

Disclaimer: This graphic is sponsored by PSECU, a Pennsylvania-based credit union.

Getting Started Investing Early Mindset

The thought of investing can be intimidating and that often is the biggest barrier to entry. Individuals at the beginning of their investing journey can be dissuaded by the confusion and uncertainty.

However, these investing apps for beginners help break that barrier and offer low-cost, easy to implement solutions.

We’ve established above just how powerful compounding interest is to your retirement goals.

If you’re a college student or young professional paying off student loans, you may not feel that you have any additional funds available.

There are opportunities for just about everyone to make or save some additional cash.

No matter how big or small, build that habit and start investing if you can.

The type of investing we’re talking about here is long-term, diversified retirement saving through ETFs (and similar funds). While these apps and services do provide other services, the most popular recommendation for a beginner is to start the habit of building wealth for retirement through the means of ETFs (or index funds).

The books mentioned after the investing apps for beginners can help shed light on this.

As you continue to build your foundation of knowledge about personal finances and investing, you may gain interest in educating yourself on other funds and forms of investing.

Five Investing Apps For Beginners

Below are only a small collection of the dozens of investing apps for beginners available on the marketplace. Each of these differ slightly but the theme is consistent across all of them: making it easier to get started investing and support your wealth building journey.

The power of FinTech has changed the investing landscape for the masses.

M1 Finance – Free Automated Investing

M1 Finance is another great service for new investors looking to start building wealth. They combine the automation of robo-investing with the personalized control of an online brokerage.

Best of all, M1 Finance is free.

For long-term, passive investing with diversified portfolios or actively-managed personalized investing, it’s tough to beat M1 Finance.

In comparison to other robo-advisors, the big differentiator for M1 Finance is that control and customization users have. You can select pre-determined portfolios, similar to other robo-advising platforms, or you can fine tune your ETF and stock selections to fit what you want.

The value being provided for free on their platform is really unmatched.

The registration process is intuitive and easy to follow, clearly built with the digitally savvy 21st century investor in mind. To get started the minimum account deposit is only $100. For there you can set-up automatic transfers from your bank account into M1 Finance, adjust your allocations, withdrawal money and so on.

Whether you want to be entirely hands-off with a passive strategy or have some level of active investing, M1 Finance is establishing itself as a leader in the space.

The fact it’s free for individual investors is just one of many selling points.

Acorns – Micro Investing Made Easy

Acorns is a micro investing app that has helped over 3,000,000 Americans get started investing for their future.

Their platform is a unique and powerful way to support building wealth.

How does Acorns work?

Acorns provide their members 6 ways to grow:

• Round-Ups
• Recurring Investments
• One-Time Investments
• Found Money
• Referrals
• Acorns Later

Your investments are automatically diversified across 7,000 stocks and bonds thanks to Acorns Fractional Share Ownership of ETFs in your portfolio.

There are no minimum investment levels, no trading fees and your total costs will only be $1, $2 or $3 monthly depending on the membership their. The goal is to make investing for your future easier, non-intrusive and cost-friendly.

Get started with Acorns today in less than 5 minutes and leverage the power of compound interest.

Canadians: If you’re looking for a comparable investing solution, check out Mylo.

Wealthsimple – Leading Robo Advisor

Wealthsimple is one of the most popular, highly rated services in the robo-advisor investing marketplace for both Americans and Canadians.

A friendly user-experience and intuitive platform, quick set-up process, $0 account minimums, unlimited transactions and strong customer service makes Wealthsimple a great choice.

Wealthsimple offers 3 portfolios with varying proportions of stocks vs. bonds based on your risk tolerance: Conservation, Balanced and Growth.

Similar to Acorns, you’re getting broad market diversification with ETFs.

Their service includes automatic rebalancing, expert advice support, dividend reinvestment and auto-deposits. Wealthsimple is helping to remove the stresses of investing so that you can get started earlier and automate the process as best possible.

The costs associated will include 0.5% account management fee and the ETF fees.

Learn more about Wealthsimple and register today to see how they can help you reach your financial goals.

Wealthfront –  Cost-Effective Robo Advisor

Next up on the investing apps for beginners that can help get you investing in minutes is Wealthfront.

Wealthfront has over $10.5 billion in assets under management and follows similar suit to our other apps above: making investing easier and hands off for its users.

Their platform requires a $500 minimum account balance and has a 0.25% account management fee in addition to the approx. 0.08% – 0.11% fees on the ETFs. Overall, it’s a cost-effective way to make investing efficient, effective and user-friendly.

They offer other accounts outside of traditional retirement portfolios. Additional benefits include automatic portfolio rebalancing, tax-loss harvesting and customer support.

Wealthfront is another leading service to get you investing early no matter the financial acumen you hold.

Blooom – Optimize Your 401k

Blooom differs from our investing apps for beginners noted above as it technically isn’t an investment vehicle. It’s an amazing service to ensure you’re making the smartest, cost-effective decisions with your 401k.

If you’re employer offers a 401k plan as part of your contract with a matching contribution, that’s amazing.

However, the hidden fees, expensive funds and non-optimal portfolio mixes might be crippling the total returns available to you. Unfortunately, employer 401k plans can often be tied to or defaulted into uneffective funds that you could be unaware of.

That’s where Blooom comes in.

Blooom cuts the average clients hidden 401k fees by 44%, improves their diversification and now has over $2 billion in assets under management.

You can link your 401k, 401a, 403b, 457 or TSP.

Four Investing Books For Beginners

Want to continue building a foundation of knowledge around investing, retirement and planning your financial future?

These four books below are great resources to do so.

The Simple Path To Wealth: Your Road Map To Financial Independence and a Rich, Free Life [by JL Collins]

Since money is the single most powerful tool we have for navigating this complex world we’ve created, understanding it is critical. Here’s an important truth: Complex investments exist only to profit those who create and sell them. Not only are they more costly to the investor, they are less effective.

The simple approach JL Collins created and presents now to us in this book is not only easy to understand and implement, it is more powerful than any other.

The Simple Path To Wealth is an amazing resource for people of all ages.

Millionaire Teacher: The Nine Rules of Wealth You Should Have Learned in School [by Andrew Hallam]

Millionaire Teacher shows you how to achieve financial independence through smart investing — without being a financial wizard. Author Andrew Hallam was a high school English teacher.

He became a debt-free millionaire by following a few simple rules.

In this book, he teaches you the financial fundamentals you need to follow in his tracks. You can spend just an hour per year on your investments, never think about the stock market’s direction — and still beat most professional investors.

The Little Book of Common Sense Investing: The Only Way to Guarantee Your Fair Share of Stock Market Returns [by John C. Bogle]

The Little Book of Common Sense Investing is the classic guide to getting smart about the market. Legendary mutual fund  pioneer John C. Bogle reveals his key to getting more out of investing: low-cost index funds.

Bogle describes the simplest and most effective investment strategy for building wealth over the long term: buy and hold, at very low cost, a mutual fund that tracks a broad stock market Index such as the S&P 500.

This tenth anniversary edition includes updated data and new information but maintains the same long-term perspective as in its predecessor.

The Value of Simple: A Practical Guide to Taking the Complexity Out of Investing [by John Robertson]

The Value of Simple is a plain-language how-to guide to investing for Canadians by John Robertson. Canada has the highest investment fees in the world, as well as a confusing tax system that features four-letter words like RRSP and TFSA.

Fortunately there are low-cost index funds that make it easy and rewarding for you to become a do-it-yourself “couch potato” investor.

With a focus on developing good processes to minimize the room for human error and step-by-step instructions, the book will walk you through the elements of managing your finances for the long term.

In Closing…Investing Apps For Beginners

This is only scratching the surface of investing app for beginners. The number of robo advisors, discount brokerages and various FinTech solutions for investing continue to grow.

It’s never been easier to start.

Even if starting means just a handful of dollars each month. Building that habit of investing early and making it a priority can change your financial trajectory.

As showcased in the infographic, the power of compound interest can be your best tool in your wealth building journey.

Personal finances are personal. There is no one size fits all approach but explore these FinTech products, read one of the books and examine your own financial situation to see what might fit best for you.

How did you first get started investing? 

Do you have a preferred FInTech investing app?

Let me know in the comments below.

Here are some other posts to help you take control of your money and life:

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• The Best Personal Finance Podcasts – 30+ Money, Side Hustle And Investing Shows
• 35 Rewarding Side Hustles (Almost) Anyone Can Do To Earn More Money
• Building Good Money Habits – Make Your Money Momentum
• Personal Finances Resource And Content That Saved My Financial Life