How to Start Investing Using Acorns and M1

Trust me when I say this… but the thought of investing money can be intimidating, especially when the experience isn’t on your side.

I will be the first to admit that in the past I always stuck to traditional savings.

For starters, I had no clue how to invest or what to even invest in. I also read enough horror stories about people losing money.

And with about $1200 worth of student loan payments every month, throwing my money into the market, even just the thought, was downright scary…

But is it really that scary?

With most of my articles focused on teaching readers how to pay off debt, create ways to earn money and preparing for the future – investing is something I personally am learning more about. As I have become more ingrained in the financial universe I realized the power of investing – money making money for you!

In my most recent post, I wrote about money tips I wish I knew when I graduated from college and #4 was save and invest.

And while I am not about to lay down some framework to help you make millions, (I am by no means an investment professional) I have found that it isn't about what you know, it is about who you know.

In other words I have read enough about other people's investing and which apps come highly recommended for new investor like me.

Before I get into getting started, (that can even mean exploring and learning about investments) here is a quick snapshot at why some of the younger generations are NOT investing.

4 reasons why millennials don't invest

4 Reasons why Millennials don’t tend to invest:

#1 Live on the line.

You pull in $3,500 but your monthly outgo is $3,300. Investing and making it work is not so simple when you are living so close to the line. Earning more helps, but you don’t have to be baller status to start investing.

#2 I don’t understand investing.

A recent Business Insider article laid it out perfectly – the markets are confusing. You caught me. I don’t really understand investing. Sure I get the premise, invest into companies and you see a return on your money. But when is a good time? When is a bad time? When do you take your money out? Like myself, many folks quite frankly do not have expertise in the investment world.

NVDIA Stock

(if only I had invested in NVIDIA this time last year when I said I wanted to (71$ to $209)

#3 Trust.

Besides risk, the most common word you hear associated with investing is trust. Do you trust the person you are working with? Can you trust the stocks you are investing in? Do you trust the market?

Can you trust the current political leaders? Lots of trust questions pop up when you talk investing. One thing holds true – you can’t go wrong looking to stock index funds, which when we are student loan debt-free is where we are personally heading.

“Rule No. 1: Never lose money. Rule No. 2: Never forget rule No.1”
– Warren Buffett
 

#4 Risk.

The most common reason for not investing – RISK. Whether it is risk of losing money or risk of not making money, a common reason for not investing is losing out. If you are a low earner or have high expenses, investing confuses you, and you don’t trust the industry why would you invest?

My First Steps to Investing

Pay yourself first.

I love the pay yourself first strategy. The idea revolving around taking your monthly income and deciding how much is going to your future. Be it paying off debt, saving or investing the concept involves making yourself first in your financial equation.

Know exactly each month you are putting towards your future. Then use the rest to pay the bills and whatever is leftover can be used for saving, spending, or in this case, investing!

After you pay yourself first start small and figure out what meets your needs when it comes to investing. There are so many options out there – term life insurance, 401K, Roth IRA, index funds, or individual stocks. Here is where I insert a necessary disclaimer: check with a professional if you are not sure what route to go. Our personal philosophy is pay off debt first, then invest. However, there is many ways to go and truly it's a case by case basis.

Start Investing with Acorns

There is finally a way to reward your spending… start with Acorns.

Acorns is an app that does the following:

  1. Link accounts
  2. Rounds up spending to the nearest $1
  3. Invests $5 at a time as round-ups accrue
  4. Can add more monthly if you would like
  5. Small monthly fee ($1.00 under $5,000)

So by doing exactly what you are doing now, you can easily invest $25 or more just on normal bill pay and spending.

You can obviously choose what type of investment portfolio you want (I went aggressive because it is such a small amount being invested) and there is no monthly minimums.

Acorns is 100% hands-off investing, so if you're new stat with Acorns.

M1 Finance – Individual Stocks & Professionals in one App!

What I will say is I recently started using M1 Finance for investing purposes. M1 is a new company and was recently featured on Business Insider, and here is why I trust them the most.

First off, I love pie charts and apps that make life simple! M1 Finance includes both and makes it super easy for new investors. For starters, investing is important considering the national payout rate for traditional savings is .06%, meanwhile banks are earning 3.01% on YOUR money!

Simple Management

At M1 Finance, you can add or withdraw just like a traditional savings account with an app from your phone…but without the commission fees! Compared to the competition, M1 is 100% customizable and there are no transaction fees. You should have the right to your money at any time and M1 agrees. Deposit or withdrawal at anytime from an app on your phone.

Here’s how it works

Whether you are an experienced investor or you have never invested on your own (like me) M1 is simple to use because of their robo advisor. Users can customize how they invest or choose one of their professional pies developed to fit your personal investing goals and style. Feel free to use them or lose them, it’s your choice. M1 takes care of all the hassle and trading, just check out below:

 

What are the Fees?

With the step by step customization using a robo adviser, you can allocate your money without paying brokerage fees.  M1 Finance offers a low transparent fee of just .25% of all assets or about .83 cents a month for a $5,000 investment!

M1 Fiance is the only investing partner with Money Life Wax and here is why: they are a transparent no BS company that is making it simple for the everyday person to start investing in their future. You don’t have to be an expert to make it work, they take care of it for you!

Using my exclusive link MLW readers get three months free to try M1. So if you're into day trading already, or you want to get started, this is a great offer. Feel free to check out M1 and comment below if you have any questions!

Q: What are you currently investing in?