After reading the first four (101, 102, 103, 104) articles in the series, it is now time to pick a platform and start investing. Picking a platform or brokerage can be pretty nerve-wracking, especially if you don’t have someone there to help you out.
I use 5 different platforms, and those are the five I will talk about. Each of my five platforms has other similar platforms. So if you don’t like Stash, you can choose something like Robinhood. It is all about what you need and what features are most important to you.
Speaking of features, I will break down each of my platforms by simplicity/complexity and by the features that they are best at. Of course, all of this is in my opinion. Here is the overview:
1) Simple– Easy access and automated investing- Cash App
2) Easy- Best at automated investing, set up and forget about it- Stash
3) Medium- Complex when required but also simple features- Charles Schwab
4) Difficult- Hard to set up, and difficult to remove stocks- M1 Finance
5) Tedious- Hard to understand, complex, but lots of information- Wells Fargo
2021: Year of the Dividends
1) Cash App. This is my recommendation for anyone who has never invested. You just transfer the money into your Cash App checking account and *Bam* you are set. My mom even did it. From there you can invest just a dollar at a time. I like this because if you have, for example, a $7 daily spending limit- when you get home you can invest the remaining money each day. It forms great habits.
My absolute favorite feature of Cash App is the fact that your dividends are paid directly into your checking account. This means that you could wake up and find a fresh $10 in your checking account- that you could then use to buy a coffee or sandwich. Right now I get dividends of $5-7, but I can imagine when I will be getting dividends of $50-70. That will be amazing.
2) Stash. Stash is best at automatic investing. You can set each stock to be invested on a daily/weekly/or monthly schedule. So if you want to invest in bonds and S&P500 index funds every week, you can. If you want to invest in McDonald’s and Walmart every month, you can. If for some reason you get in a pinch financially, you can pause for a while and then start right back up.
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I like having the ability to individually control your investments. And because I am investing weekly, I am dollar-cost-averaging my way to success. The interface also downplays the actual price of the stocks. Seeing the price of each stock can cause analysis paralysis.
3) Charles Schwab. This platform is a little complex. You will need to learn how to invest in the platform. However, they do offer Schwab Slices which allows you to fractionally invest into stocks in the S&P500.
This means that I can buy, say $100, of McDonald’s or Apple. Since those stocks each cost over $100, I would buy a fractional share, not a complete share. This platform is a great way to grow your knowledge in the world of investing. If you want to get into closed-end funds, mutual funds, or preferred shares, you will need a complex platform like this.
Also, when new electronic traded funds hit the market, platforms like Stash and Cash App don’t offer them. You will need a platform like this to get brand new securities.
Stocks vs. Bonds
4) M1 Finance. Whew, this was hard for me to set up. I had to watch a video. However, the platform is complex, but the actions that it does for you are amazing. It is dollar-cost-averaging in the best way.
In M1 Finance, you are creating pies (which are stocks you group together). You create a “father” pie that is an assortment of your “baby” pies. You then set a percent that each pie should attempt to stay inside your “father” pie. So if my father pit had 5 baby pies, I would probably set each pie at 20% each.
Now, when you deposit money into the father pie, it distributes it across the baby pieces, so that they equal the percent you allotted. This is awesome because some of your pies can be performing well and some others could be doing poorly. It will adjust your amounts to meet your goals. For instance, one of your pies could have Telsa and the other could have oil stocks. It would be buying more oil stocks at discount prices and less Telsa.
Over time, you will be buying your stocks at a discount because the high price stocks would be purchased less. It works amazingly well and I only have one major complaint. I do not know how to take one stock offline from my pies. I know how to replace one stock with a different one. This would delete one stock (sell it) and buy the new one. But if I wanted to take one stock out of a pie, but keep it, I don’t know how to do it.
Introduction to REITs: Part III
5) Wells Fargo. This was my first platform. It was extremely hard for me to navigate, but I got the hang of it. It does not have fractional shares. This leads to analysis paralysis because you will always ask if you are getting a good deal or not. As your stocks go up, you will get more nervous about investing. For example, if you bought McDonald’s for $150 in February. In April it may be $200. Is it still a good deal? Is it over-priced? Those questions start to come up. I like automated, fractional investing. Fewer questions.
However, it has the best feature for new investors and seasoned investors. It has a dividend-income calendar. When you buy a dividend-paying stock, after a couple of days, the dividend payout will populate on the calendar. After a while, it becomes a cool game to see all the money populating across your calendar. This is the only platform I use that has in-depth income predictions.
For example, when I buy a share of AT&T (T), it will show my complete annual dividend of $2.08. However, it will show my 4 quarterly dividends of $0.52 in the months of February, May, August, and November. Over time, your amounts will start to add up. It is what got me hooked on dividend-investing in the first place.
The Magic of an Infinite Return
Other than that, I do not recommend Wells Fargo for newbies to the stock market. If watching income growth is your thing, then this is the platform for you.
If you want to see pictures of each platform, please refer to this article. I recommend Cash App and Stash for newbies in the stock market. They will get you comfortable with investing and help you trust the process. Once your curiosity begins to ask more questions, it may be time to promote yourself to a more complex platform. Remember to Build the Mindset of an Investor. Have fun!
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Disclosure: I am not a financial advisor or money manager, and any knowledge is given as guidance and not direct actionable investment advice. I am an Amazon Affiliate. Please research any investment vehicles that are being considered. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.
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