The tech piggy bank

This is the best time to be alive. Even in the face of a virus pandemic, all of us have so many things to be thankful for in our lives.

I am thankful for technology. My parents always talk about the “good old days”. I never correct them when they talk about it, but I think to myself: The best days are yet to come. I am sure our parents had some great times in their in the old days. Life was easier before Google and Starbucks. But technology is getting better, medicine is getting better, education is getting better.

There are plenty of areas of life that have not gotten better. Our political situation is worse than ever. Racial tensions are worse than ever. People are unemployed. Salaries have remained stagnant while the cost of higher education, healthcare and housing has exploded.

But there has never been a better time to be an investor. There is no reason no to be savings and investing money.

Technology has brought down the barriers to entry. I remember have to pay a fee every single time you want to buy or sell stocks. You really had to save up your money and think about the trade you were going to make, because you needed the stock to increase at $7.95 in order to even break even with your trade. There were high barriers to entry that kept so many people out of the market. Today, there are no fees to invest. I never thought I would see the day where the largest banks in America eliminated their trading fees. And the only reason this has happened is because new fintech businesses have emerged and challenged the status quo.

Every day there are new competitors that are challenging the big banks. We should all be thankful, because big banks make the wealthy wealthier and the lower class has been shut out of that system for generations. But the smartphone and tech is changing that.

There is no way I would have built the level of wealth I have been able to without the help of the tech piggy bank. What do I mean when I say “tech piggy bank”?

I am talking about Roboadvisors and AI. Specifically the smartphone apps and accounts that act like a piggy bank. You connect your bank to the app and then the app rounds up your purchases to the nearest dollar and invests that money. You can also specify that you want to auto-transfer a set amount each month into the account.

These apps include: Acorns, Qapital and Worthy Financial to name just a few. They auto invest the money for you based on your tolerance and goals. Do you want to be safe or take more risk. The software uses an algorithm to choose investments based on your survey questions. And then the app charges a monthly or asset based fee to do this work for you. You become an investor with just a few clicks and everything runs on auto pilot for the rest of your life.

It has never been easier to be an investor. *You do need a smartphone. You do need a bank account with a credit/debit card. You do need internet service to get this all set up.

The tech piggy bank is better than the actual piggy bank. You do have to collect coins. You do not have to take those coins to the bank or a machine in order to cash them in. Your deposits are automatically invested in the market. So your money spends more time in the market earning dividends and capital gains. It is always better to be in the market than on the sidelines.

You have no excuse. Even if you are completely risk averse, you could investing in treasury bills and be building wealth. I love bonds, because you get paid monthly, rather than quarterly with dividends. And bonds are guaranteed income. Everyone loves getting paid.

Are there downsides to roboadvisors and artificial intelligence? Yes

They do not have the cheapest fees. You do have to pay something for their convenience.
They also invest your money for you, so you do not have as much choices over what assets you are invested in.

Which app is my favorite “tech piggy bank”?

I use M1 Finance and like it the best. This is not an endorsement. I am getting paid anything. This just what I use and like. The technology is great and they have extremely low fees.

I also use Worthy Finance, because they pay a fixed amount on your investment that is compounded daily.

You have no excuse for not saving or investing. A few dollars saved today can trim years off how many years you have to work. Start putting your pennies to work.

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