Hey guys, it's Andy from Magoo Investing.
Today I'm going to be talking about some tips for how to start investing in the stock market
when you don't have a lot of money to begin with.
We live in a time where the stock market is the most accessible it's ever been and now
is a great time to take advantage of that.
You can start investing in the stock market with as little as 5 dollars and in this video
I'm going to go over 3 of my favorite places to start putting your money and learning about
investing in the stock market.
And before we get right into it, make sure to do your own research before going into
the stock market and investing.
These are my three recommendations but you should do your own research before you put
your money in.
The first app I'm going to recommend is the Acorns app.
And I've talked about this on the channel before so if you want to see any of those
videos, they'll be up at the top of the screen.
Acorns is one of the first places I would put somebody if they were just starting investing
in the stock market.
It takes very little prior knowledge, all it takes is five dollars to get started and
you can put your money into the stock market.
Some of the benefits to Acorns is that it takes very little input from the user.
You go in, you set up your account and you pick the portfolio you'd like.
There's five option going from conservative to aggressive.
While the aggressive sounds kind of intimidating, it's the place I would recommend starting.
It says aggressive, but if you compare it other funds out there, it is on the conservative
end and it's a great place to start.
So let's go over some pros and cons of Acorns.
The first is that it is the easiest to get started with.
You need very little prior knowledge.
All you need to know is that you're putting your money into the stock market.
You can go thru and see where your money is going, but it has these portfolios already
made for you.
You just have to pick which one you want to go with.
Some of the really cool things you can do with Acorns is link your bank account.
One of the things it will do is go through your purchases and round up that purchase
to the nearest dollar.
So say I go buy something for 2.50, it will round it up to 3 dollars and that fifty cents
will be put into the app and once it reaches 5 dollars, it will invest it into your account.
So you'll see that on your bank account statement as a full transaction of 5 dollars or however
much it rounds up to going into your account.
This is a great way to start saving money without really having to think about it.
Another way you can start saving without thinking about it is by doing reoccurring payments.
This is something that I do every week.
On Wednesday it takes 10 dollars from my bank account and puts it into my account.
So the re-occurring payments is a great thing because one of the best practices is to slowly
add and not put all of your money in at one time.
Adding every week or so, if the market goes up or down, you'd be buying some shares at
a lower price and some at a higher price and it will averages to grow your account at a
better pace.
Another great thing they have is called found money.
Basically they partner with different companies and they give you cash back deals.
But instead of giving you straight cash, it automatically invests it back into your account.
One of the downsides is that it takes around 2 to 3 months for your money to make it into
your account.
But if you're going to be investing for the long term, this is something I'd really recommend.
Also I made a full video based on Found Money so if you want to look at that I'll put that
at the top of the screen right now.
And one of the best pros to Acorns is if you are currently a college student or have a
working college email it is totally free.
This is a great option to start investing without having to put in any fees.
Start learning about the stock market without any downside.
And now let's talk about the cons.
If you're not a college student it cost 1 dollar per month to invest.
And while this may not seem like a lot, if you're starting out with very little money
in your account, 1 dollar is a large percentage.
Say you only put in 50 dollars, 1 dollar is two percent every month that's being taken
out of your account.
So if you're only going to be putting in 50-200 dollars, it might not be worth it.
The rate the stock market increases is around 7-10 percent per year.
If you're starting investing with just a little bit of money that one dollar is going to start
adding up.
So the number two app that I'm going to be talking about is the stash app.
While I personally do not use the Stash app, I know a lot of people that use it and I've
only heard good things about it.
Basically the Stash app is a slightly more personalized version of the Acorns app.
Instead of putting your money in and picking some preset portfolios, you can go in a pick
ETF's that go off certain topics.
So these topics are 40 different ETFs that have creative titles like "Clean Energy",
"Gamers FTW", "The Weed stocks".
Basically gives you an idea of what you're investing in.
It has the stock ticker at the bottom so you can do some more research about it and you
get to pick where you put your money.
Some of the pros for the Stash app is that it is more personalized.
Say you don't want to put your money broadly into the stock market, you can pick stocks
that you really believe in.
Maybe the clean energy, maybe the gamer one, you can do that.
But going along with that, if you don't really know what you're doing or where you want to
put your money, this may be a little too much for you.
Similar to the Acorns app, it has a lot of learning tools in there.
I forgot to mention that in the Acorns section, but they have all of these different sections
if you go through the app telling you about different articles about how the stock market
works.
And some tips and tricks on how to be more successful in the stock market.
And the final con is that there is not a free option.
If you have a college email, this doesn't help you out in the case.
It is a 1 dollar flat fee every month.
Which as a I previously mentioned may be too much for someone just starting out.
And finally we're going to be talking about the Robinhood app.
This is probably the most well known app that I'm going to be talking about and is one that
I use every day.
The biggest draw to the Robinhood app is the ability to buy single or just a couple shares
of a company without paying a commission.
Basically that is a fee that you pay to a broker for the transaction fee.
That can range between 5 and 10 dollars normally.
Say you're buying 100 dollars worth of stock, and buying and selling is each one commission,
you're down 5-15 dollars just upfront.
So you're going to be having to make at least 15 dollars just to break even.
What Robinhood allows you to do is buy it without having to worry about being the hole
the second you make the trade.
Another thing with Robinhood is that it really doesn't hold your hand.
So if you have a basic understanding of the stock market, this is a great way to do that.
But unlike the acorns or stash apps, it doesn't have all these tips or portfolios for you
to invest in.
You have to find the stocks on your own.
One of the cons is that you have to buy a whole share of a company.
Compared to the Acorns app where the whole 50 dollars is going to get invested.
Say you want to buy Yeti stock, which is a company that I've talked about on this channel
dozens of times at this point.
If I buy it at 33 dollars, you could only buy one share.
So out of that 50 dollars that you put in, you would have 33 going to that stock and
have 17 left over in your account not doing anything.
I would recommend finding out what stock you're going to buy, see how much it costs, and then
put the money in.
Don't put the money in first, realize that oh it's cheaper than I thought and have some
money left over that's not really doing you anything.
So these three options that I've talked about are great for starting to invest based on
what type of knowledge you have on the stock market already.
Acorns, Stash, and Robinhood in that order of Acorns if you don't really know what you're
doing but you'd like to get started to Robinhood of "Oh I know a couple companies that I'd
like to buy".
That is where I'd recommend going.
Definitely if you are a college student, I would highly recommend using the Acorns app.
Having free investing is one of the best things you can take advantage of.
I still have my college email so I'm still using Acorns to day.
Stash is a great opportunity if you kind of have a general idea of what you want to invest
in and want to be more personalized than Acorns.
And Robinhood is the best, because it's free, and you can pick exactly what stocks you want.
So based off that, you can pick which one best suits your needs.
So these apps are my three favorites, but obviously do your research before hand.
Just because I love these companies, doesn't mean that you need to throw your money in
there blindly.
Hopefully you guys learned something from this video, if you did, I'd really appreciate
if you hit that like button.
It helps my channel out a lot.
If you have a topic you'd like me to discuss in the future, please leave it in the comments
section down below and I'd love to go over it.
Thanks for watching and I'll see you guys in the next video!