Personal small-time investing blew up during the pandemic for a few reasons. One is that many people were stuck home with nothing to do. The stock market and other investments were at an all-time low and presented a great opportunity. And three, new software and services made it easier to start investing.
This article will examine these investing apps and the many benefits they can provide. We will be looking at apps designed to erase entry barriers to the world of investing, whether monetary or language barriers. In particular, we will be looking at a money app for Latinos that aims to assist Spanish-speaking customers who have previously been barred out of the investing world.
1. You’ll Learn How to Invest
Learning how to invest your money is essential to achieve financial independence. However, it can be a difficult practice to start as there are usually high barriers to entry when it comes to investing. Believe it or not, it was even harder a few years ago. It was even harder to get started investing as most stockbrokers and investment firms required a high entry deposit fee and other stipulations that made newcomers shy away from adequately investing their money outside of a savings account.
While savings accounts are a good thing, and we recommend everyone put a significant chunk of their earnings into savings accounts, the reality is that savings accounts have incredibly low-interest rates, offering a return of investment at less than one percent. Meanwhile, bonds, dividend stocks, mutual funds, and other investment opportunities can provide an investment return literally ten times higher than that. Savings accounts offer security as your money is insured by the Federal Deposit Insurance Corporation, commonly referred to as the FDIC. However, you shouldn’t expect your money to work for you when placing it in a savings account.
Fortunately, due to the internet, new opportunities have cropped up, allowing absolute beginner investors with limited funds to get started in the world of investing with little to no barriers to entry. You have probably heard of services like E-trade, Robinhood, and even money apps like Cashapp, which allow newbies to invest their money. Unfortunately, there is still a high barrier to entry for Spanish-speaking users. Important information is often lost in translation when converting from one language to another. People often feel uncountable to invest their hard-earned money into a service they don’t fully understand.
Latin-focused money apps such as Finhabits help bridge that gap allowing foreign-language speakers to invest their money and climb up the economic class ladder. This luxury for so long has been unattainable for many minorities in the history of this country.
Services like Finhabits handle most of the work involved with investing so users can take a hands-off approach to invest. There are three types of investing accounts accessible with Finhabits:
Personal Investment Account:
A personal investment accounting is an investment account that you plan on retrieving from in the near future. With a personal investment account, you usually want to maximize your yearly rate of return and are usually able to cope with the increased risk involved. You can usually expect an annual investment return with a personal investment account at around three to six percent. Personal investment accounts generally place your money into an exchange-traded fund or ETF, which is a fund that consists of hundreds of sticks that automatically diversifies your investment, protecting you in case one of the stocks falls off and you have hundreds of other stocks balancing it.
With a personal investment account, you are not tied into an account for an extended period. You can add as much or as little as you like and retrieve it whenever you feel like it. However, as a rule of thumb, you generally want to invest for at least three years before recovering the money, as this gives the compounding interest a chance to build into something substantial. However, life can get in the way, and sometimes you need the money right away with a personal savings account that money is always available to you.
Usually, your job will offer an employer-backed Individual Retirement Account or IRA. However, independent workers who don’t have access to employee-backed IRA services like Finhabits allow you to create one independently. IRA works similarly to a personal investment account except with the agreement that you won’t withdraw your IRA until you hit the retirement age of 59 and a half. As an incentive for waiting, you get incredible tax benefits when you withdraw money, so most of the money saved goes into your bank account, unlike a personal investment account subject to income and long-term capital gains tax laws.
If you are a freelancer, independent worker, or your employer simply doesn’t offer a company-backed retirement plan choosing this option will significantly benefit you. Everyone should be saving for their retirement when at all possible. You will be shocked at how much you can save in ten years, especially when you add compounding interest that averages four to seven percent each year.
Suppose you recently left a job that offered a 401k or employer-backed IRA and want to keep adding to your savings account. In that case, you can roll over your existing retirement account to a money app for Latinos and continue adding money into it. This is also a good option if you have multiple retirement accounts and are having trouble keeping up with them. You can simply consolidate all your accounts into one retirement account.
2. Build Good Money Habits
The greatest thing about the internet is that it allows for people with like-minded ideas and goals to form and share ideas quickly. The sharing of ideas is literally why the internet was invented. Unfortunately, many people do not understand how to properly invest and save their money, especially those that were not born into money.
However, with the rise of the internet and services such as Finhabits and other money app for Latino, minority groups, and others typically do not think about the ins and outs of how to plan the financial system to their advantage have a community that is willing to teach and learn together on how to best save for the future. Whether in instructional videos, podcasts, classes, blog posts, or community forums, there are always resources for those interested in learning and expanding their skill.
The Finhabits website has a continuously updating blog list of important financial topics to inform its users. These include topics such as examining the difference between day trading and diversified investments or how to refinance your home. The best thing is that these complex blog posts are accompanied by related podcasts and videos for those who are better at learning with visual or audio cues.
Building good money habits is perhaps the most essential step in becoming financially independent. Studies show that people spend most of their money at once, no matter their yearly income. This means that no matter how much they get paid, they will naturally adjust their life, so most of the money is quickly gone, meaning very little is saved for the future. If you want to truly become financially independent and have your money work for you, you need to build strong money habits.
3. Plan For The Future
Everyone gets started investing because they have a vision of the future they want to live in and a rough idea of the amount of money required to get there. However, making a realistic and feasible plan to get there is challenging. Using the two benefits above, creating a personal savings account and building good money habits allows one to plan for the future.
Additionally, the app allows you to easily manage your money and view how much you are depositing and your return on investment. The ease of use from apps such as Finhabits lets you quickly move your money around.
4. Get Access To Their Health Insurance Marketplace
Suppose you are an independent worker and already fund your retirement account or personal investment account without employer assistance. In that case, chances are you are in the market for health insurance as well. Independently finding the right health insurance can be a hassle. Determining how much you should pay in premiums a month vs. the coverage you need is difficult, and many health insurance agents will try to upcharge you to increase their commissions.
But with an app like Finhabits, you gain access to their health insurance marketplace, which partners with the affordable care act marketplace to get you cheap and high-quality health insurance. The quality of health insurance is broken down into four categories bronze, silver, gold, and platinum, each more expensive but more compressive in their coverage than the other. However, if you qualify for subsidies, you may still be able to get the premium plans at an enormous discount.
A Money App For Latinos Can Bring You Financial Independence
Investing whether in real estate, small business, or the stock market is how you achieve financial success and stability. Unfortunately before the advent of small-time investing services, it was incredibly difficult for newcomers to get into the world of investing. The arrival of money apps for latinos has truly ushered in a new age of investing.