Apps for Financial Freedom
Updated: Dec 3, 2020
Saving and investing doesn’t need to be complicated. Here are some apps I have come across that can help bring you closer to paradise. If you have debt aside from a mortgage, you must attack it with a vengeance before investing. Investing while you have debt is like trying to swim with a kettle bell tied to your ankles. Personal Capital This is my favorite app for reviewing my net worth. A great feature is the retirement planner, which lets you compare different scenarios of your future and the % chance you have of being able to retire safely. You can connect all of your accounts in one place and include assets such as cars or real estate you may own. Mint I use Mint for my budget and for setting financial goals. For instance, I have a current goal of building up $250k for a down payment on a $1 million rental property. This is a great tool for saving for a house or a car also. It lets you see your progress and lets you set smaller milestones to reach along the way. Acorns Acorns is a great tool to help you save without thinking about it. A key feature is that it rounds up your card purchases to the next dollar and puts the spare change into an investment account. So, your change jar gets invested, which is better than paying Coinstar 11.9% to exchange it into cash. I use this account as a travel money account. When I need to buy a flight or hotel, I cash in some of this money so my regular budgeting and investing stays consistent. Betterment/Wealthfront Betterment and Wealthfront are both very similar. They are robo advisors, meaning they invest your money in a diversifed portfolio for you. I’ve used both in the past and enjoyed the experience. This was probably not the smartest idea, but several years ago I would build up Betterment to around $20k and then cash it out to pay off my student loans. I did this a couple times and probably ended up just about breaking even. I was trying to beat the interest rate on my student loans with investment returns. In hindsight, I should have just paid the student loans instead of bothering with the stock market. Fundrise If you want to invest in real estate, but don’t have enough money for a down payment on a property, Fundrise could be the place for you. Fundrise has a collection of eREITs (Electronic Real Estate Investment Trusts), which you can auto-invest into. You can earn a dividend of close to 5% on top of any investment gains, which have averaged around 5 or 6% over the past 5 years. The net yearly earnings are around 10-11%. However, Fundrise was created in 2011 and hasn’t been through a dramatic real estate crash. They also haven’t had any negative years. This could be a good way to hedge your money against stock market volatility. Also, money invested is not very liquid. You can only withdraw money at the end of each quarter. Also, there are early withdrawal fees if you cash out before 5 years. Vanguard I use Vanguard to invest money every paycheck into VTSAX, which is a total stock market index fund. When I buy VTSAX, I am buying a small piece of the best companies in America. This is a simple investing strategy, which I have come to enjoy more than putting money into Betterment and Wealthfront. VTSAX has fees of 0.04% vs 0.25% for Betterment or Wealthfront. BlockFi Ever heard of a company offering an 8.6% dividend? Neither had I until I found out about BlockFi. They will pay you a monthly compounded return for putting your USD into an account. You can also buy and sell cryptocurrency, and take out loans against your cryptocurrency. This company is only a few years old, so this rate may not last forever. But, in times like these, having a high stable return is really nice. This would be the perfect place to put your emergency fund. Cash sitting in a regular checking or savings account will actually lose you money because of inflation. Think Before You Act Do not invest unless you are comfortable with the risks involved. Make sure you are out of debt first. Determine the level of risk you are willing to take and make an informed decision. Once you come up with a strategy, stick with that and don’t pull your money out. Over time, compounded interest will make you very wealthy. Set up auto-investment, and sit back and enjoy the ride. Don’t panic and don’t sell. You should only cash out if you have an opportunity to earn more money, such as buying a profitable real estate property.