Small investors sometimes find investing simply too complicated. People who want to invest and save face particular challenges: complicated products, high fees, earning little to no interest, high minimum investment requirements, and difficult access to investment funds.
The barriers to investing can be too excessive to overcome. Would-be investors just give up and leave their money in the bank, where inflation slowly eats away at it. Hundreds of billions are sitting in current accounts, benefiting no one but the banks.
Still, people are increasingly keen to learn how to get their money to work for them. Especially as new app ideas have flooded the market, growing the retail industry exponentially over the last 10 years or so.
‘Investment apps’ are a popular Google search term
Two of the most popular finance-related search terms are ‘how to invest’ and ‘investment app’, according to a study of search behaviour on Google.
Some simple, beginner-friendly apps on Google’s Play Store are products by fintech startup Franc, Fedgroup, Liberty’s Stash, and EasyEquities. In addition, some user-friendly apps are eToro and Binance. The majority of the others are complicated and high-risk.
The main issues with retail investing
Minimum investment levels and product complexity are the main barriers to retail investing in many countries. Beginner-friendly apps are accessible, uncomplicated, and affordable to use.
A good portion of the world’s population has neither savings nor investments. When choosing a product, beginners should look for a limited number of funds to make narrowing down the options easier. The best products are high-performing yet charge moderate fees. With some apps, like Franc (a South African startup), you can begin with as little as 10 rands a month.
Additionally, you need to look for an app that has mobile functionality to enable investment management on the go.
Best features of an app
Your product of choice should be registered with your country’s respective financial services watchdog. Look for products that offer investment advice on a variety of options, including deposits, pension schemes, and insurance products, both long- and short-term. Ideally, there would be no fee on deposits and withdrawals.
Make a list of all the fees you’ll be expected to pay, including brokerage fees. These can be quite hefty.
Reasons to invest and save
Many people save money for an emergency fund. Some save for a big purchase, like a vehicle or a home. Whatever your reason, read the fine print before committing to any product. This will show all the fees that apply. Don’t be afraid to ask questions.
The best apps have calculators to show how your investment could grow, and provide proper educational material and risk warnings wherever possible.
The growing trend doesn’t mean you should jump aboard, however if you’re interested – we do recommend that you educate yourself first, never gamble your family’s livelihood, and continue to stay up to date with the latest market news on sites like ours.