Robin Hood/Stash/Millenial Investing

[alaskadrifter]

I’ve been trying to educate myself on investing, and these seem like good options for complete newbs like myself. I like that you can try Stash for $5, people pay more for games on their phone! Has anyone else used one of these apps?

 

[drunkenbeagle]

Haven't, but the fees are high from looking at the website for Stash. $5 may sound great, but you are paying $12/year in fees.

Fidelity or Vanguard charge basically nothing. You can probably open an IRA at either with no minimum. For the index funds you should be buying, they will both have good ETFs with no commissions, and the funds themselves have low management expenses. I personally would suggest an IRA or brokerage account with Fidelity and set up a monthly direct deposit from your paycheck directly to it (for at least a bit more than $5). I would buy the Blackrock iShares IVV (an S&P500 index) whenever there is enough in the account to buy more, a few times/year, or whenever there is a decline in the market (like last month).

 

[Cessnaflyer]

I love Vanguard for my real accounts. All in on VTI!

I used Robinhood for my gambling play money but their CNBC interview made me worry so I pulled my money.

 

[alaskadrifter]

Haven't, but the fees are high from looking at the website for Stash. $5 may sound great, but you are paying $12/year in fees.

Fidelity or Vanguard charge basically nothing. You can probably open an IRA at either with no minimum. For the index funds you should be buying, they will both have good ETFs with no commissions, and the funds themselves have low management expenses. I personally would suggest an IRA or brokerage account with Fidelity and set up a monthly direct deposit from your paycheck directly to it (for at least a bit more than $5). I would buy the Blackrock iShares IVV (an S&P500 index) whenever there is enough in the account to buy more, a few times/year, or whenever there is a decline in the market (like last month).

I’ve been meaning to open a Roth IRA before April, but haven’t read up enough to know what I want yet.

 

[drunkenbeagle]

I’ve been meaning to open a Roth IRA before April, but haven’t read up enough to know what I want yet.

Just open one, anywhere. What matters is making the contribution (there are limits every year). You can always move it later.

 

[Cessnaflyer]

I’ve been meaning to open a Roth IRA before April, but haven’t read up enough to know what I want yet.

Vanguard and dump your $6,000 into it if your MAGI is below $189,000.

RIP Bogle!

 

[Flyinthrew]

Never used the apps you speak of. My IRA is at Vanguard. My wife's is at Fidelity. Very much the same product in terms of choices, fees, etc. The difference I have found between the two is that Vanguard takes your deposit and leaves you the hell alone. With Fidelity I always feel like in a sales funnel for something.

 

[bimmerphile]

Robinhood I use for stupid investing, like tinkering with options and day trading since trades are free. It's an app, so I wouldn't leave a huge balance sitting in there. It was a good thing to do on reserve, especially options, but it was more entertainment than anything.
My employer 401k is at fidelity and the expense ratios on their mutual funds are higher than Vanguard. If you don't have a Roth and qualify to contribute (under 189k as previously mentioned) be sure to put something in there. Once you have over 10k in a specific mutual fund you can move it to a different share class (they call them Admiral shares) that have even lower expense ratios. That's where my Roth IRA is and my normal brokerage account for long investments
Also if you can afford to dump the max contribution in earlier in the year there's more time to be invested, versus spreading out the $6k over 12 months

 

[Cessnaflyer]

Never used the apps you speak of. My IRA is at Vanguard. My wife's is at Fidelity. Very much the same product in terms of choices, fees, etc. The difference I have found between the two is that Vanguard takes your deposit and leaves you the hell alone. With Fidelity I always feel like in a sales funnel for something.

My 401K is at Fidelity and I can't get them to stop emailing me when I've opted out of everything.

 

[Cessnaflyer]

Robinhood I use for stupid investing, like tinkering with options and day trading since trades are free. It's an app, so I wouldn't leave a huge balance sitting in there. It was a good thing to do on reserve, especially options, but it was more entertainment than anything.
My employer 401k is at fidelity and the expense ratios on their mutual funds are higher than Vanguard. If you don't have a Roth and qualify to contribute (under 189k as previously mentioned) be sure to put something in there. Once you have over 10k in a specific mutual fund you can move it to a different share class (they call them Admiral shares) that have even lower expense ratios. That's where my Roth IRA is and my normal brokerage account for long investments
Also if you can afford to dump the max contribution in earlier in the year there's more time to be invested, versus spreading out the $6k over 12 months

You could just buy ETFs which are at the lowest expense ratio. Only negative is you can't buy fractional shares to use all your cash.

 

[bimmerphile]

You could just buy ETFs which are at the lowest expense ratio. Only negative is you can't buy fractional shares to use all your cash.

True. The Vanguard index funds at Admiral share class have the same expense ratio as the ETF (VFIAX vs VOO, .04%) so once you have enough in you can take advantage of fractional shares.

 

[citrus]

Good info up top. ETFs are good for liquidity and lesser investment minimums, great way to dip your toes in the water. Mutual funds are priced only once a day (after the trading day IIRC). Not that any of this should make a difference for the regular investor, if you're investing for the long term, you shouldn't be concerned with the day to day price swings of your holdings. JP Morgan said it best, "It will fluctuate".

The only thing that I can add is that you heed the lessons of the greats i.e. Ben Graham, John Bogle, Warren Buffet. Graham and Bogle have written excellent books on the subject and regardless of time period they were published, they're still relevant to this day. There are no quick, easy get rich schemes in investing, think long term! I personally have a 30-40 year investment period, longer if you think about the fact that one day you will pass the baton to the future generation. Read about the subject but don't fall for the hype, study market psychology (don't fall victim to it), develop your strategy and stick with it.

 

[Rodger Wilco]

I have read a lot of good books about investing. This one is great: MONEY Master The Game by Tony Robbins.

I was shocked to learn how hard I’m getting screwed over with hidden fees and costs. Turns out “expense ratio” is a sticker price but what you pay is far more. I had a sneaky suspicion I was getting screwed but this book told me where to look to confirm it. Anyone who has an 401k, Ira,or buys Mutual Funds needs to buy this book and read it.

Heck if you don’t like it let me know I’ll buy it from you because I plan to give a copy to my siblings and friends.

Oh and yes I have Robbinhood app for fun just goofing around making trades.

I recommend Vanguard S&P 500 Index for long term investment. 96% of mutual funds fail to outperform the market and charge you massive fees on top.

But seriously, read the book

 

[Dphoenix]

I get all my stock and investing advice from other people on the flight deck.
Surely, they must know what they're talking about!

 

[Cessnaflyer]

I recommend Vanguard S&P 500 Index for long term investment.

I like the Total Stock market VTI better because you are missing thousands of smaller companies that are also generating great profits.

 

[Rodger Wilco]

I like the Total Stock market VTI better because you are missing thousands of smaller companies that are also generating great profits.

Sure. Either one would be fine. Anything is better than that Wells Fargo, Fidelity, Chase Bank actively managed fund that makes the same as these indexes and then charges you 3.5% on top for a total gain of -3.5% a year. Oh and adjust for inflation you'd have been better off just keeping the money in a mason jar out back.

There is a reason why all the luxury yachts belong to the wall street brokers and fund managers and not the clients.

 

[citrus]

S&P 500 accounts for 85% US market cap but if you opt for VTI, you get big/mega, mid and small cap all in one ticker. I think VTI tracks the Wilshire 5000, which is made up of 3500+ stocks. Either is a good investment as @Rodger Wilco said. Vanguard has gone the route of VTI in quite a few of their funds and Wilshire 5K has a small edge in historical performance over the S&P 500, not by much though. You're guaranteed diversification either way, which is the most important thing.

 

[Rodger Wilco]

Poor OP is like: WTH is everyone talking about boring old index funs for, I wanna be a day trader making that $$$!

 

[Cessnaflyer]

Good place to learn about options wallstreetbets

 

[derg]

There was a similar system in the 1990's where you could allocate a certain amount of money per month and it would buy whatever collection of stocks you selected. Almost like a poor mans mutual fund. I dabbled in it for a couple years (Hey, it was the 1990's, we're all going to be IPO billionaires, right? Just like a 20 year old that thinks he's going to create an app, go public and be the next Facebook) and, at the end of 24 months, I really didn't make anything and computing taxes was an absolute nightmare compared to the actual benefit.

Money is money, no financial app is going to change the world. If you have time, pick up Morningstar and read it like an Ikea instruction manual and start from there. If you don't have time, or interest, find a good airline-secular fee-based financial advisor and develop a mistrustful advisory relationship.

One thing I've learned is most people that suggest "buy this stock NAO!" are often trying to offload their shares in that stock. Hell, don't even buy individual stocks unless you're speculating.

Thats investment advice from an airline pilot so you probably need to take all I said with a grain of salt anyway.

Do what you want! Good luck!