“Ever wonder whether individual stock investing is for you? Chuck Jaffe, host of Money Life with Chuck Jaffe, joins us to talk about the differences between investing in individual companies and in indexes or actively traded funds. We’ll discuss diversification, learning about companies, the impact of fees, and more.
‘Disagreement makes a market and if you are going to be an investor, you are in the middle of that disagreement. So you better understand what side you’re on and what’s important to you’“
WHAT IS ACORNS? Acorns is a “mico-investing” service that allows you to invest your spare change into the US stock market. The app connects to your checking and credit card accounts and your purchases get rounded up to the nearest dollar. Those “round-ups” are then placed into an investment account for you. You’re free to withdraw your money whenever you’d like, as often as you’d like with no fees or penalties.
WHAT’S GOOD ABOUT ACORNS? Easy to set up and get started, with no minimum balances required. This is a great way to begin investing in the stock market. The automation aspect means you don’t have to think about it.
WHAT’S NOT SO GOOD ABOUT ACORNS? The web interface isn’t as good as the mobile app. Fees can get high. Tax time can be a hassle when you’re waiting on IRS documents for a relatively small balance.
COST TO USE ACORNS: $1 – $3 per month, depending on your plan; free for students.
“Historically, the stock market has returned an average of 7% annually. Real estate appreciates on average 4% annually. Stocks win. If you want your money to grow as fast as possible, you would put your money in the stock market (or a business) vs a house. End of story.
If you are pursuing FI/RE, and want to get there as fast as possible, you would be better off skipping home ownership and investing the money you would have used for a down payment and mortgage payments. But getting to FI ASAP isn’t everyone’s goal.”
In his own words: “When we talk about investing is the stock market, there is always a subject that is almost considered a taboo: Stock Market Crash! Yes, everybody gets excited when the stock markets are going up, but at the slightest sign of a potential stock market crash, most of the amateur and DIY investors start to panic.”
Sooner or later a stock market correction will take place. Do you know what you’re going to do if and when that happens? You should. Having a plan in place beforehand greatly reduces the chances that you’ll do something foolish. Check out this post for five moves you can make while others are panicking.
In his own words: “Bull markets are glorious because they make just about everyone participating feel like they’re a genius investor. However, this recent sell-off is a healthy reminder that investing does get more difficult.”
It has felt like easy money to investors for a while now, but as Retire Before Dad correctly illustrates in this article, stocks don’t always go up. But a bear market isn’t only healthy, it can also be a great opportunity for those that are prepared to seize it. If you feel like a stock marketing correction is headed our way, check out this post for some ideas how what you can do to not only prepare from it, but to profit from it.