Millennials aren’t interested in the stock market. That’s the message from surveys of young people who say they don’t have enough money, the stock market is too confusing and the typical investor is an “old, white man” who doesn’t suit their demographic.
There is an alternative. “Investment apps are on the rise,” says Stephen Molloy, author of the book How Apps Are Changing The World. “These apps are an appealing investment tool because that’s what millennials spend their time on – their phones. Transactions executed through apps on your phone takes away some of the anxiety of spending physical money. It’s easier to see numbers change on a screen than it is to part with physical money.”
From micro-investment apps that let you invest the last $1 in your bank account, to apps that invest every time you socialise, there are even “green” investment options for eco-conscious users who hope their spare change can help the planet. Here’s how anyone can dabble in stocks and shares – with the swipe of a touch screen.
1. Stash Invest
An investment app that aims to “give everyone access to financial opportunity” you only need $5 to sign up to Stash Invest and begin investing in over 30 ‘EFTs‘ (exchange traded funds), a basket of investments that all have something in common. You can choose between ‘Young Money’ with companies like LinkedIn and Amazon, ‘Blue Chips’ like Microsoft or the ‘Roll with Buffet’ EFT that lets you invest in Warren Buffet’s holding company. The app was launched by two former Wall Street employees who wanted to empower smaller investors.
Every time you spend $4.50 on a coffee, the Acorns app could make you money. The Australian micro-investment, which has PayPal as backers, syncs to your credit or debit card and every time you make a purchase it automatically invests your “dollar round-up” into a portfolio of pre-approved investment opportunities. The latest addition is a socially responsible portfolio designed to attract people who care about investing in environmentally-sound companies. For accounts under $5,000, they charge $1 per month. Accounts above $5,000 are charged at 0.275 per cent per annum.
Stephen’s pick of the investment apps to look out for in 2017, Robinhood is a mobile-friendly app for first-time investors seeking free trading, set to launch in Australia soon, having secured US$110 million in Series C Funding, with over two million users in America. With zero commission taken from each trade, Australian uses will be able to buy and sell US-listed stocks and EFTs, including many of the largest Australian companies. The company behind the app makes money by collecting interests on the cash stored in Robinhood accounts, much like a bank collects interests on cash deposits.
You only need $1 to sign up with ClinkSavings, which has a “set and forget” feature which automatically invests a certain amount any time you spend money on your linked credit card. Specifically, it links investment to social activities – you can set your account to make an investment every time you spend money at a restaurant, bar or make an online purchase. You can set the app to invest aggressively or cautiously.