Make Investing Simple Whether you’re putting away your first $1,000 or have been saving for the future for years, you’re going to want to consider investing your funds at some point. Doing so will allow you to maximize returns and exponentially grow your savings. Unfortunately, the investment process can be pretty intimidating, especially if you are starting out on your own. It’s hard to know how to begin, where to invest, how to balance your portfolio and even what sort of fees you should expect to pay along the way. That’s where the convenience and ease of today’s best investment apps can come into play. What Are Investment Apps? Once upon a time, your only choice for investing was to pick up the phone and call your stock broker to initiate a trade. You were charged for the service, either based on commission or as a flat fee per transaction. While stock brokers are still an option, you can take investing into your own hands these days, without ever needing to talk to another human. And it’s all thanks to investment apps and platforms. Today’s apps offer a range of services and features. With them, users can: Research funds and individual stocks View fees and expenses related to investment choices Invest funds on-the-go, and even automate regular contributions Automatically reinvest earnings on current investments Adjust portfolio for personal risk tolerance View performance projections Choose funds or individual stocks that align with personal beliefs, through portfolios based on socially-responsible missions The best part? Investing through trusted apps is usually cheaper, faster and you’ll have instant access to your portfolio/reports at any time of day. Not only that, but you’ll also be able to set your investment risk tolerance, rebalance your portfolio and even reinvest earnings automatically. Who Are Investment Apps Designed For? Whether you’ve been playing the market for ages or are ready to invest your first $100, the right investment app is worth considering. For those new to the stock market, apps will simplify the process and put the power of investing at your fingertips… literally. From your phone or computer, you can easily see portfolio recommendations based on your own goals, savings plans and even risk tolerances. The right app will tell you up front how much you can expect to spend in fees throughout the year, and can even allow you to automate many of the more confusing aspects, such as picking well-performing stocks or even rebalancing. While investment apps are ideal for beginners, newbies aren’t the only ones who will see the benefits. Even seasoned investors will find the process easy to use, and may even learn that these platforms can maximize returns (and save them money in fees) along the way. Not to mention, many investment apps offer additional insight into specific funds, so you can choose to invest in companies that align with your own passions and beliefs. Now that you know why you should consider using an investment app for your own savings, let’s take a look at some of the best ones available today. Best Investment Apps Great for Beginners: Acorns Fees and Expenses: For investors with less than $1 million invested, fees are between $1-3 per month depending on the account option you choose. Acorns is also free for college students. Beginning Investment Requirement: At least $5 to start Types of Investments Available: ETFs (exchange-traded funds) Portfolio Options: Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes If you want an easy, hands-off approach to investing that won’t leave your head spinning, Acorns is a great first choice. This app not only simplifies investing for beginners, but allows investors to completely automate the process from start to finish. After connecting the app to your debit card, the app will “round up” each of your daily purchases, putting the savings into an investment holding account. Once you reach the minimum required, Acorns will invest this money on your behalf, based on your account preferences. The app will also reinvest your earnings, as well as rebalance your portfolio when necessary. [youmaylike] Great for Truly Free Investing: Robinhood Fees and Expenses: Robinhood is a free investment platform in every sense of the word, pledging to never charge company fees or commissions to customers. Beginning Investment Requirement: You’ll need $2,000 to get started Types of Investments Available: ETFs, stocks, cryptocurrency and options Portfolio Options: Interest-based options such as Fashion ETF, Tech ETF and Energy ETF, as well as a standard S&P 500 ETF, all with personal risk tolerance settings. You’ll also find “collections,” which are individual stocks grouped according to specific interests — such as companies with female CEOs or that are in the social media sector. Automatic Investing?: No Automatic Reinvesting?: No Automatic Rebalancing?: Yes A great option for beginners and experienced investors alike, Robinhood makes the process both easy and affordable. How affordable? Well, it’s entirely free. By offering a truly free experience, Robinhood saves investors some serious cash over time. Additionally, the platform makes it easy to choose individual stocks or ETFs based on personal interests. If you want to invest in cryptocurrency or options, you can also do so through Robinhood. One of the biggest limitations of the platform, though, is its automation. While you can set up automatic deposits into your account, you will need to manually invest those funds and then reinvest (or withdraw) your dividends. Stash Fees and Expenses: $1 per month fee for those with less than $5,000 invested, or $2 per month for retirement accounts with less than $5,000. For users under 25, fees on retirement accounts are waived. If you have more than $5,000 invested, your fee will be 0.25% annually. Beginning Investment Requirement: You’ll need at least $5 to begin investing (fractional shares are available) Types of Investments Available: ETFs (exchange-traded funds) and fractional stock shares Portfolio Options: Too many to name, ranging from things you Want (portfolios that are conservative to aggressive mixes), things you Believe (such as groups of companies that believe in clean energy, LGBT rights, etc.), and things you Like (tech, retail and social media companies). Automatic Investing?: Yes Automatic Reinvesting?: No Automatic Rebalancing?: No The closest competitor to Acorns, Stash seeks to make investing easy for everyone, regardless of your goals and passions. They have three account options to choose from, allowing you to manage your investment and retirement accounts, or even a child’s education savings through custodial accounts. With Auto-Stash, you can set any number of automatic investment options and transfers. However, Stash will not rebalance your portfolio for you, nor will they reinvest dividends on your behalf. Wealthfront Fees and Expenses: 0.25% annually Beginning Investment Requirement: $500 minimum initial investment Types of Investments Available: ETFs (exchange-traded funds), individual stocks, retirement accounts (401k, IRA), 529 savings plans, trusts Portfolio Options: 11 asset classes to choose from, including natural resources and real estate Automatic Investing?: Yes Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes Wealthfront’s investment platform is designed to be friendly for users of all experience levels. If you’re a seasoned investor, you’ll enjoy all of the options available to you, including the ability to manage your retirement accounts, education savings, and even non-profits or trusts. If you’re a newbie, their free financial expertise center is the perfect place to learn all about investing and your future. TD Ameritrade Fees and Expenses: The managed, automatic portfolio investment option (called Essential Portfolios) is available with a 0.30% advisory fee Beginning Investment Requirement: $5,000 minimum for managed portfolios (no minimum requirement for traditional trading) Types of Investments Available: Stocks, ETFs, options, mutual funds, futures, bonds/CDs, Forex, cryptocurrency Portfolio Options: Essential Portfolios (EP) offer investors a range of options from Conservative to Aggressive, based on your individual passions, preferences and tolerances Automatic Investing?: Yes, with EP Automatic Reinvesting?: Yes Automatic Rebalancing?: Yes A more traditional brokerage app, TD Ameritrade is one of the most recognizable names in the industry. You can easily educate yourself on all things financial, thanks to their free videos and posts. If you want a traditional experience, you can choose your trades and pay per transaction. Prefer a more streamlined, automated approach? Opt for their Essential Portfolios, a hands-off investment option (robo-advisor) that charges a flat monthly fee and requires little-to-no oversight from you. Plus, their app makes the investing process easier than ever with a user-friendly interface, price alerts and no minimum to get started. If you prefer a desktop experience, this is also available to you through TD Ameritrade. Bottom Line Getting started with investing can be intimidating. With all of the terminology and account options out there, it’s easy to want to run and hide. Thanks to some of today’s best investment apps, though, you can not only get started with your first portfolio but also watch your money quickly grow… no matter how much of a beginner you may be! It’s important to choose an app that offers you the portfolio options and features you want most, with fees and deposit minimums that match your financial needs. The five apps above are our favorites for beginners, making that first foray into investing easier than ever before. The hardest part will be choosing the one you love most!
There are two things in life that you can’t escape: death and taxes. However, you can find professionals who will help you with both scenarios, especially the latter.
Tax is a very real burden in America due to the complexity of calculating how much you owe to the Internal Revenue Service (IRS). The United States is one of the few countries that requires most individuals to submit annual calculations (tax returns) of their income to the government. These self-declaring statements are then matched against the IRS' own records. If they don’t agree with your calculations, you may face some penalties and fines.
Why Hire a Tax Accountant?
This is where a tax accountant may come in handy. Accountants, by definition, are professionals trained in bookkeeping and are qualified to prepare financial statements. Tax accountants are those who are specialized in U.S. tax law. Their main focus is to prepare annual tax returns. They normally hold a special qualification such as a CPA (Certified Public Accountant), attorney or EA (Enrolled Agent).
The CPA certification signifies that the individual has passed the official exam from the American Institute of Certified Public Accountants. By passing this exam along with some requirements, they prove they are qualified for accounting practices.
A tax attorney is not actually technically an accountant. They are a lawyer who is specialized in tax law. Normally, a tax attorney would be useful to argue a specific position on a tax return.
An EA is a tax professional who has passed the Special Enrolled Examination from the IRS themselves. It is considered the highest credential the IRS awards.
Tax Accountant versus Tax Software
Do you need to hire a tax accountant for your entire professional career? Not necessarily. Taxes are something you can do yourself depending on your comfort level with financial terms and calculations. With simpler tax cases (e.g. single, one job, etc.) you can definitely do it yourself and the IRS provides a lot of instructions. There is also a wide range of commercial tax software available to handle more complex financial profiles.
Top tax software includes TurboTax and H&R Block (for more complicated profiles such as landlords and self-employed individuals), TaxAct (for simple profiles) and MyExpatTaxes (for those with foreign income).
So Why Would You Hire a Tax Accountant?
Peace of Mind
While no one can guarantee you 100% accuracy (we’re all human and mistakes happen), by hiring a tax accountant, you will immediately feel a sense of relief that someone qualified is there to represent you.
A tax accountant can provide the added consulting element, both on your current financials and on your future plans, especially when you are an ongoing client and build a relationship with your accountant
Support in Case of an Audit
Normally the federal tax statute of limitations is for three years after the due date of your return. This means the IRS can still audit your tax return up to three years after you file it. Being audited by the IRS can be an intensive process involving collecting a lot of financial records, clarifying your position on various claims made in your tax return and answering many follow-up questions. Most tax accountants know the audit process and can provide ongoing support in case of one.
If you decide that hiring a tax accountant will be your preferred option, how do you go about finding the right one?
Finding a Tax Accountant
Tax accountants come in many flavors, depending on what your needs are. They can be sole proprietors, i.e. a one (wo)man band, who tend to have strong relationships with their clients.
Then you have the accountants who work in larger firms, who can normally handle very complex situations, however will also charge larger consulting fees.
Then there are the seasonal tax accountants, who tend to be employed with the large tax preparation firms such as a H&R Block. These are the type of accountants who aim to provide you a quick and efficient experience, as they are normally assigned to a large volume of customers.
The IRS does provide a directory of professional tax preparers here, however it may be easier to do some online research and seek referrals from friends and colleagues.
How to Work with Your Tax Accountant
Once you find your tax accountant, there is still some work to do. These professionals will help you prepare your tax returns; however, you will need to give them the relevant information to do so.
Make Sure You Agree on the Price/Price Range Upfront
Most accountants will be able to tell you the base price, although the final price is normally calculated based on the number of forms filed, which you won’t know until the end.
Have All Your Income Documents Ready
You will normally receive all your tax documents from employers, financial institutions and participating organizations between January and March.
Common forms include:
- W-2 Form: Statement of salary and taxes withheld
- 1099DIV, 1099INT, 1099R: Statements of investment income paid out (div = dividends, int = interest, r = retirement)
Aside from these official forms, you may need to collect additional documentation and receipts of any other income generating activities, such as renting or freelancing.
Your tax accountant will prepare a financial representation of your life for the government. You should be comfortable and have a general understanding what they are claiming.
Their major value add to a tax software is the personalized consulting they should be able to provide. Typical questions to ask include:
- Are there any special deductions I can claim to reduce my tax bill?
- Is my withholding rate (how much your employer withholds on your income) correct or do I need to adjust something?
- What should I do to save on my taxes next year?
In the end, no one can confirm 100% accuracy so it’s important to always review your tax return before it is submitted.