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how-much-does-it-cost-to-invest-today

How Much Does It Cost to Invest in 2021? Here is What You Need to Know

July 31, 2021/in Robinhood App, Save Money /by Mary Elizabeth

If you are looking to start investing your money, you may wonder how much it costs to invest, from the not so simple fees associated with investing to the costs of getting started. If you are looking to start investing your money, you may wonder how much it costs to invest, from the not so simple fees associated with investing to the costs of getting started.

In this complete guide, we will discover all of the costs associated with investing to give you a thorough understanding of how much is needed to start investing.

Types of Investing Costs

From tools to get you started if you are a complete beginner to the costs associated with having a brokerage account, it is worth knowing the facts before you go in.

How Much Does It Cost to Invest: Costs Before You Start Investing

Before we dig into the fees of a running brokerage account, there are optional costs you may consider, especially if you are new to investing. Here are five things to consider:

How Much Does It Cost From Your Monthly Budget?

It’s essential to have a monthly budget before you start investing. The main reason is that investing is a long-term play. So bSo by having a clear budget and way to manage your expenses, you will make sure your investments stay invested.

Using a budget like the 50/30/20 budget will calculate how much you can afford to invest every month. For example, your monthly investment could be as much as 20% of your monthly income after taxes if you have an emergency fund.

If you struggle to stick to your monthly budget, it’s worth looking into banks like Starling, which have built-in spending categories to help you see where your money is going each month.

Takeaway: Look at your monthly income and expenses and work out how much you can realistically invest each month. Treat investing as a monthly bill/fixed cost.

How Much Does It Cost for a Stock Advisor Service?

Putting investing fees aside, you may be concerned with the costs of losing money on the stock market by investing in the wrong stocks. This is where a Stock advisor service comes in handy.

If you are starting and are not sure which Stocks are worth investing in, then it’s good to get tips from experts.

An example is Motley Fool’s Stock Advisor, which you can expect to pay $99 for a year’s subscription. Depending on how much you plan to invest in the stock market and your free time to research stocks, this could be a cost that gives you a return on investment.

Here are some of the benefits of a stock advisor service like Motley Fool:

  • For example, Time-saving – The Motley Fool comes with 15 starter stocks that Motley Fool invests in and knows to be good long-term investments. This is a great way to get you off the ground with your first stocks instantly.
  • Up to date advice from experts – Each month, you get various stock picks based on what is going on in the market so you can invest at the right time.
  • They tell you when to sell too – If you go with their advice (which you should if pay for the service), they will also tell you when it’s time to get out of a nasty stock.
  • The Motley Fool Stock Advisor service at the time of writing delivered 566% in returns since 2002, so if you want some guarantee of success, then this could help you.

How Much Is Needed to Start Investing?

Many people think investing is just for the rich, and whilst this might have been true in the past, investing can be for everyone in today’s world of technology.

With the rise of platforms such as Robinhood and Trading 212, you can invest from the comfort of your own home.

Apps like this offer you the opportunity to start investing with as little as $1! That’s by investing in what is known as fractional stocks, where you buy part of a whole stock.

Of course, just because you can invest with $1 doesn’t mean you should. So it’s good to understand the fees involved before jumping in.

How Much Does It Cost to Invest: Common Investment And Brokerage Fees Explained

You may need to pay several different fees when investing, so we’ve broken down the most common ones below.

Platform/Brokerage Fee

Brokerage fees can come in different forms, so it is good to research your broker before committing to any account.

Here are some of the typical fees that you should look into before committing.

Account Maintenance Fee

This can be in the form of either a monthly or an annual fee. In addition, you are charged for the maintenance of your account Or any subscriptions for premium research or investing data.

You can even be charged for inactivity, so good first to understand how often you plan to invest.

You can generally avoid brokerage account fees by choosing the right broker.

Trade Commission

This is also called a stock trading fee, and this is a brokerage fee charged when you buy or sell stocks. You may also pay commissions or fees for buying and selling other investments, like options or exchange-traded funds. Some platforms now offer 0% commission fees, but the investment rate isn’t always as good.

This payment goes directly to the broker. This cost usually ranges from $1 to $5 per trade and, in some cases, will be waived if the investor reaches an account minimum.

Sales Load

This is not often in most cases, but it still does happen. A sales load is paid on some mutual funds sold by the broker who sold you the fund.

It would help if you were wary of these charges as most mutual funds today don’t have these, and remember, the broker is trying to sell these to you because they get a commission. So be sure to make sure the fund is right for you!

Mutual Fund Transaction Fee

Another brokerage fee, this time charged when you buy and sell some mutual funds.

Expense Ratio

This is an annual fee charged by mutual funds, index funds, and exchange-traded funds as a percentage of your investment in the fund. The charge is to manage the fund.

Management or Advisory Fee

Typically a percentage of assets under management, paid by an investor to a financial advisor or Robo-advisor.

401K Fee

An administrative fee to maintain the plan, often passed on to the plan participants by the employer.

Ways to Minimize The Costs Of Investing

With all of these different costs involved, you are maybe wondering if investing is worth it. But, for many people, it is, if done correctly, investing can be an excellent way to beat inflation.

Here are some tips to help you minimize some of the costs of investing to turn over more profit!

Invest Long Term

If you are constantly buying and selling stocks, then you will no doubt have high commission fees.

Avoid these by doing proper research before buying stocks and hold for the long term. Take the steer from successful investors like Warren Buffett, who has held on to stocks of Coca Cola for more than 30 years.

What does long-term investing mean? Well, according to Investopedia, you should be looking for investments to stay put for at least five years if you want to ride out infatuations in the market.

If you are unsure what to put your money into long term, then considering a stock advisor service could be a good option. Think of it to offset the costs of buying and selling investments all the time.

Get Tax Credits

No matter where you are in the world, tax implications can impact your investing profits.

Short-term capital gains are taxed as ordinary income. These rates range from 10% to 37% again, depending on your income and filing status. You can find out precisely what percentage of long and short-term capital gains tax you’ll pay by visiting FactCheck.org.

Sign Up To 401K or Companies Retirement Scheme

The reason many people decide to start investing is for longer-term financial security. But before you begin investing freely, making sure you take advantage of any company retirement scheme, especially if your investment goals are retirement.

This is because many employers will contribute if you contribute, meaning you can make more money! As long as you don’t withdraw before 59.5 years old, this account is also tax-deferred. Tax-deferred accounts, which safeguard investments from taxes as long as the assets remain untouched

Cheaper Platforms Don’t Consistently Save You Money

When it comes to investment companies, it’s important to remember that the cheapest isn’t always best and that you will often get what you pay for. For example, a company might be more expensive, but it could have a website that is easier to use, has telephone support, and even sends research out to make decisions that you feel confident about. Conversely, other providers charge lower fees for a more basic service.

You need to weigh the fees (and the reasons for them) when choosing where to put your money. Either way, make sure you aren’t paying too much for the service you receive – after all, high fees will eat into your returns over time.

How Much Does It Cost to Invest: Bottom Line

You may have heard that investing is a great way to top up your income, but it isn’t free. Make sure you do your homework and pick the right platform for reaching your financial goals. If you are looking at investing in stocks, bonds, mutual funds, or ETFs, make sure you understand how these investments work before deciding which one to buy into. The key takeaway here is don’t invest without doing your research first!

While some investments may obscure their costs in the fine print, anyone can quickly get to the bottom line with the wealth of information available online. Use reviews and comparison sites to find the right broker that fits your investment goals.

This post originally appeared on Your Money Geek.

Mary Elizabeth
Mary Elizabeth

Mary Elizabeth is a self-taught finance nerd and money master. At the age of 21, she bought her first house, and by the time she was 30 had paid off all student debt and saved 100k. She founded MeMoreMoney.com to help others achieve their own financial goals with uncomplicated advice that works for everyone from just starting out to those who have been saving for decades.

www.memoremoney.com

Can We Finally Say Cryptocurrency is Over?

August 13, 2018/0 Comments/in Cryptocurrency /by Wallet Squirrel

I first heard of Bitcoin on June 17th, 2013 featured on the “How Stuff Works” Podcast. The podcast was great and they dived into what Bitcoin was, a bit about how blockchain worked and how if it caught on, it could vastly change the way we use currency.

I was intrigued, but I compared it to the trend in multiplayer games like World of Warcraft where people were gathering in-game coins in exchange for real money. It was only worth something while the game was popular.

I admit, I thought the idea was a bit ridiculous.

I could have bought Bitcoin at $100

When I first heard about Bitcoin in June 2013, the price was around $100 per coin.

That’s right, if I bought 10 bitcoins for $1,000 at the time and sold at their peak of $19,783 per coin in December, 2017. I would have now nearly $200,000.

Do I regret my decision? No

I regret nothing and still continue to hold zero coins of any kind. Would it be nice to have $200,000, absolutely, but assuming the entire world would accept a new currency is silly. Here’s why.

Why I never believed in Cryptocurrency

Nothings Hack Proof

Bitcoin which uses Blockchain to create an incredibly long receipt of user transactions. The longer the blockchain receipt, the harder it is to hack because it needs an extraordinary amount of processing power. So Bitcoin uses the longest receipt to verify who has how much Bitcoins because it’s assumed impossible to hack.

Well that’s not the only way to hack Bitcoins and other cryptocurrencies. In June 2018 the cryptocurrency exchange company Coinrail was hacked. The hackers stole 30% of the exchanges total cryptocurrency, or $35 million US dollars (source). Plus once that money is gone, it’s gone and nearly impossible to track unlike bank records. Oh, and it’s not insured by any goverment agency.

It’s not an isolated case. Japan’s Coincheck was hacked resulting in a crypto loss, South Korean Youbit was hacked twice requiring bankruptcy and others continue to be hacked (source). With no physical footprint, your money is just gone if hacked.

Let’s face it, we live in a hack-happy world. Each time an Exchange gets hacked (happens more than you think), the price of Cryptocurrencies lose major value. Yikes.

It skyrocketed due to media attention, now that’s gone

Bitcoin has literally zero real value. It’s only worth what we say it is.

That being said, in 2017 where it had one of its largest rises in price, Bitcoin thrived on all the media attention and the FOMO “Fear Of Missing Out”. Bitcoin has a finite supply of coins and everyone wanted one as the price rose.

However, that FOMO is gone and media attention has staggered. With the lack of these 2 qualities, Bitcoin’s price has tumbled from its $19,783 high to its current price of $6,363. It’s maintained a fluctuation of $8,000 – $6,000 through most of 2018.

Since Bitcoin is unregulated, no other influences will really affect the price. There may be a few spikes, but no quarterly reports or conference calls like a company or government agency, since it’s unregulated, will help the currency get anywhere back up as it used to be.

Bitcoin isn’t special, now a dime a dozen

The idea of Bitcoin was to be a central currency for everyone to use. However now there are well over 1,658 cryptocurrencies in existence (source). So 1,658 cryptocurrencies grabbing for our attention. Anything special about Bitcoin is now lost in a sea of other coins fighting for dominance and frankly, none of them are winning. It’s safer and easier to give up and forget about crypto.

Conclusion

Reports continue to come in of Bitcoin hacking, and the media attention & FOMO are gone while 1,658 other cryptocurrencies exist. Everything that made Bitcoin special is gone.

It’s over. If you’re holding out hope that your Bitcoin or other cryptocurrencies will make a dramatic comeback. It’s my opinion you’re wrong.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

Robinhood Crypto Lets Anyone Buy Bitcoin and Other Cryptocurrencies

January 30, 2018/6 Comments/in Review, Robinhood App /by Wallet Squirrel

Robinhood Crypto Pinterest Vertical Header Image You may not know, but I’ve been a long time user of the Robinhood App. I did a review of the Robinhood App three years ago, and still, continue to use it. That’s why I am SO excited that they are now releasing Robinhood Crypto to buy and sell Bitcoin, Ethereum and monitor 14 other cryptocurrencies. At least starting off…

What is Robinhood Crypto?

Robinhood Crypto will let you buy and sell Bitcoin and Ethereum without any transaction fees. The free transaction feature has traditionally made the Robinhood App popular among millennials. While the Robinhood already allows anyone to buy and sell stocks, Robinhood Crypto will allow anyone to get in on cryptocurrency social phenomenon!

While the app will initially allow you only to trade Bitcoin and Ethereum, it will allow you to monitor 14 other cryptocurrencies. These are Bitcoin Cash, Litecoin, Ripple, Ethereum Classic, Zcash, Monero, Dash, Stellar, Qtum, Bitcoin Gold, OmiseGo, Neo, Lisk, and Dogecoin. Hopefully, eventually, you’ll be allowed to trade these in the future.

While the Robinhood App only lets you trade stocks during market hours. Robinhood Crypto will be available 24/7. You can tell this by their 80’s Tron graphic design styling on their Learn More Page.

Robinhood Crypto Will Be Available In February

Currently, all the company says about the release date is February 2018. They currently have a wait list for users and as of Monday night, January 2018, it has exceeded over 1 million users on the waitlist for Robinhood Crypto (join the waitlist here).

We expect Robinhood Crypto to be released in waves throughout February.

Only certain states will get it starting off, the new feature first be available in California, Massachusetts, Missouri, New Hampshire and Montana in the beginning. They haven’t released the following states.

What Does This Mean For Cryptocurrencies?

Robinhood is one of the first stock trading platforms to break into cryptocurrency trading scene. This gives some legitimacy to cryptocurrencies as they have often been seen as a joke. The Robinhood App will be a multipurpose marketplace for people to buy both stocks and cryptocurrencies. This isn’t something any other traditional stock brokers are is doing right now.

Currently, the biggest marketplace where you can buy and sell cryptocurrency is Coinbase. Coinbase only deals with cryptocurrency (no stocks like Robinhood) and charges a 1.5% – 4% transaction fee. This in addition to the negative media attention Coinbase has received for crashing during peak hours, lends itself as an easy target for Robinhood Crypto which has shown reliability, oh and it’s free.

It’s anticipated that the legitimacy the Robinhood App brings to cryptocurrency, free trading and it’s current millennial market. Robinhood Crypto will introduce many more people to an easy way to buy and sell bitcoin and other cryptocurrencies. The waitlist alone for Robinhood Crypto is over 1 million people or 1/3 of the current Robinhood App’s user base. That’s 1 million people jumping into cryptocurrencies.

Why Is The Robinhood App Doing This?

Well, Robinhood isn’t doing this for the money. Co-Founder of Robinhood, Baiju Bhatt expects “We are going to break-even on this” he followed “But it could dramatically increase our user growth”. Considering the Robinhood App has 3 million users, and the waitlist for Robinhood Crypto is already over 1 million. That’s pretty good user growth (plus lots of media attention as a legitimate place to buy Bitcoin). Here’s how Robinhood actually makes money since they don’t charge fees.

How To Buy And Sell Cryptocurrency?

Robinhood Crypto will function similarly to how you would buy stocks through their app.

You will search for the cryptocurrency symbols Bitcoin (BTC) or Ethereum (ETH) where you can see their price and follow the history over 1 day, 1 week, 1 month, 3 months, 1 year or over the entire history of the cryptocurrency.

Robinhood Crypto Screenshot

When you want to “buy”, Robinhood will give you an estimated price. Since cryptocurrencies are known to have dramatic price swings in a day, Robinhood Crypto will put a “collar” around your buy price. So if the sale can’t execute at the price you agreed to, it waits for the price to return to what you wanted or notifies you of the price change.

In times of rocket price rises or drops, you can always set limits on your orders to automatically buy/sell where you want. This will help on those crazy price swing days we hear about in the news.

Will You Try Robinhood Crypto? I am

I’m currently on the list, just behind 97,296 people. Here is the signup to join the Robinhood Crypto Waiting List.

I’m not a major advocate of cryptocurrencies, in fact, I don’t think they’re a big deal or will ever replace actual currency. I’ll only invest around $100 to say I’ve tried it and get my feet wet in the cultural phenomenon of cryptocurrencies. I’ll ride some of the hype and then exit without any qualms. It’s just nice that a stockbroker I trust and currently use is now making cryptocurrencies even easier to buy and sell, I have to try it.

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

Disney’s New Streaming Service Will Soon Destroy the Competition

November 16, 2017/8 Comments/in Dividend Investing, Stock Watch List /by Wallet Squirrel

Disney’s New Streaming Service Will Soon Destroy the Competition

We talk about the rise of Netflix, Amazon’s streaming service, Hulu and even YouTube but I don’t think we’ve discussed enough of the impact Disney’s new streaming service is going to have.

Yes, Disney is Developing its Own Streaming Service

If you didn’t know, Disney is developing its own streaming service that’s looking to be priced substantially below Netflix at its launch. They have been leaking bits and pieces about their new streaming service here and there so we only know a little, but I don’t think people realize how big of news this is.

Cable TV is Dying, Streaming is the New Thing

In 2015, Netflix and Hulu grew 29% to a $5.1 billion market cap while cable and satellite tv only grew by 3%. It’s safe to say that streaming is taking over. Netflix alone has 109.3 million subscribers and anticipates another 6.3 million subscriptions this quarter. Those 109.3 million people are paying $10.99/month. That’s $1,202,300,000 per month. Not bad.

With Streaming, Content is King

Netflix realized a while ago, that anyone can get copy rights to movies and tv shows to be a streaming service, but what makes you unique is the original content you produce. That’s content you exclusively control. Think “House of Cards” you can’t get that anywhere except Netflix. Those original shows draw crowds of people to Netflix and they stay for the wide range of shows to watch. So much so that most people don’t need cable anymore other than sports, which have started streaming as well.

If you’re curious to know how serious original content is Netflix. Netflix plans to spend $8 billion on original content in 2018.

No One Has More Content Than Disney

Nearly every childhood movie (Lion King, Aladdin, 101 Dalmatians, etc.) is owned by Disney. Now add onto those the Pixar movies (Toy Story, Finding Nemo, Cars), Marvel Studios (Iron Man, Captain America, Thor, Avengers, etc.) as well as Lucas Films (Star Wars). These are just a taste of the original content has, and can start streaming on their own network when ready. They own the exclusive rights to these films that can be leveraged in their new streaming service.

These are huge name franchises here! The Marvel Films alone have averaged $840 million at the global box office per movie.

Then you also need to consider all the Disney channel content and shows that it’s created for tv, soon going to be available in one location. I wouldn’t be surprised to see the Disney Streaming service being the one streaming service owned by every mom in America.

Now start to consider what if Disney started to produce new content, including Star Wars, Marvel and/or movies exclusively for their new streaming service. That will be a huge draw to the service!

As much as Netflix, Hulu, Amazon Video and YouTube can crank out content. Disney has a winning formula it’s used for years to amass loads of quality content and proven itself over and over. It WILL win the original content game. If Disney can continue to dominate the original content game, they will win the streaming game.

When Does Disney’s Streaming Service Start?

The only thing we know is that Disney plans to debut their streaming service in 2019. Coincidently, this is when their current contract with Netflix is through. So when Netflix loses all their Disney content (think Marvel Series like Jessica Jones, Luke Cage, Daredevil, etc plus other Disney content), Disney will likely publish these shows on their own streaming service.

Keep in mind, they’ll start their ESPN streaming service in 2018 to start catching those cable-cutters who love sports. This will give them an opportunity to help hash out all the bugs for their larger digital content streaming service.

Will This Impact the Streaming Industry?

To give you an idea of the impact the news about a Disney streaming service. When Disney made the announcement, Netflix stock price dropped 4%.

Plus Disney has the resources not only from its box office hits, but it’s depths of resources to undercut all these other streaming services in price. So while Netfilx will continue to raise it’s monthly subscription price to pay for their original content, Disney win the war on prices and simply choke Netflix out. We’ll likely see Amazon Video and Disney as the lasting champions in the streaming game.

Conclusion

I am going to try to pick up a few more shares of Disney while the price is low before 2019. It’s not the greatest dividend for my dividend strategy at a 1.51% dividend, but it’s a great company with a great plan to be the #1 player in streaming services.

If you liked this article, I’d love if you shared it! =)

AndrewWallet Squirrel Found and Finance Ninja
Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

Stock Watch List- Brookfield Infrastructure Partners (BIP)

October 19, 2017/4 Comments/in Stock Watch List /by Wallet Squirrel

This week after listening to the Motley Fool Money podcast, I researched Brookfield Infrastructure Partners (stock ticker: BIP) for my Stock Watch List. The Motley Fool commentators said BIP was on their watch list, so I looked into it for my own portfolio.

Stock Watch List

My Stock Watch List is a collection of companies I’m looking into invest in. I’m either currently too broke to currently buy them or I’m looking into them to buy them soon. Either way, these analyses help me decided to buy or not with the extra money I earn.

What is Brookfield Infrastructure Partners?

Basically, they own one of the largest infrastructure networks globally. This is the infrastructure for the transportation and storage of energy, water, freight, passengers, and data. They earn money by way of fees for people to use their infrastructure, they have a 15.1 billion market cap on infrastructure as an MLP (Master Limited Partnership). So no matter if electricity or oil is costly or cheap, it still costs money to transport and Brookfield Infrastructure Partners makes that money.

What I like about Brookfield Infrastructure Partners

  • They have a 4.3% dividend. Plus many of these utilities are regulated by countries/regions and those support long-term contracts which produce stable cash flow. In addition, they have $1.1 billion of planned investments coming down the pipeline in the following years to generate high growth.

    5-year Stock Price for BIP – Graph from Yahoo Finance

  • They are geographically diverse spanning over 5 continents and income diverse earning money from 35 different businesses across four different infrastructure groups including Utilities (electric and natural gas transportation), Transportation (railways, ports and toll roads), Energy (energy transmission, distribution, and storage) and Communication Infrastructure (communication towers).

Brookfield Infrastructure Partners – Investor Fact Sheet, August 2017

  • I love this business model where businesses will pay to use this infrastructure regardless if the stock market is up or down. Businesses need to get their goods/services from A to B and Brookfield owns those connecting lines. Many MLPs follow this business structure but Brookfield seems to be doing a great job and consistently growing to produce additional income. Plus this reoccurring revenue makes Brookfield traditionally a reasonably safe and reliable stock.

What I don’t like about Brookfield Infrastructure Partners

  • My biggest complaint with Brookfield Infrastructure Partners, personally, is that it’s an MLP and that makes taxes a bit more complicated. I honestly can’t speak to the tax issues since I’m not familiar with them myself, I just know they are more complicated.

Conclusion

I have several MLPs that I’d love to invest in like Kinder Morgan, but Brookfield Infrastructure Partners is my favorite so far. However, I likely won’t invest in it until I understand a bit more about the tax implications. So, for now, I’ll continue to watch it and if it gets any more attractive, I’ll consult a tax professional on how it would affect my taxes and not cause a headache.

Do you own any MLPs?

Wallet Squirrel

Wallet Squirrel is a personal finance blog by best friends Andrew & Adam on how money works, building side-hustles, and the benefits of cleverly investing the profits. Featured on MSN Money, AOL Finance, and more!

www.walletsquirrel.com/

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