Betterment Smart Saver Review: Better Alternative To A Bank?

Investing Simple is affiliated with Betterment. This relationship does not influence our opinion of this platform.

One of our main goals as investors is to protect our savings from inflation. We can do this using a variety of different investment vehicles. With interest rates being so low in recent years, we have not had many options to park our short term cash savings. Most bank interest rates on savings accounts are around 0.06% right now. 

For those who are not familiar with the effects of inflation on your hard earned money, check out this video by one of the blog authors!

Recently, Betterment offered their own solution to this problem called Smart Saver. Smart Saver is an account built to stash your cash that has no account minimums. At the time of this article, Smart Saver is yielding 2.20% making it an attractive alternative to a traditional low interest bearing savings account.

Click here to learn more about Smart Saver!

By leveraging modern technology, Betterment has become one of the most well known robo advisors on the market today. The Smart Saver account is one of Betterment’s most valuable features. Betterment has become a full cash management solution for those looking to invest their money as well as protect the buying power of the cash they are holding on to.

investing simple betterment review
Betterment Home Page

What Is Betterment?

Betterment is an online platform that offers personalized portfolios for you based on your risk objective and time horizon. The platform provides many additional features and tools to investors such as tax minimization strategies, auto rebalancing and access to CFP® professionals. Betterment’s goal is to have its portfolios align with each investor’s individual goals and investment objectives.

Betterment is tailored towards passive long term investors. If you are a fan of set it and forget it solutions, Betterment should be on your radar. In exchange for this full service automated management, Betterment collects an asset management fee of 0.25% or 0.40% depending on what plan you use.

Check out our full review of Betterment here!

What Is Betterment Smart Saver?

Investors may have shorter time horizons for certain pots of money. For this reason, Betterment offers an alternative to a savings account called Smart Saver. Through this investment option, Betterment is offering higher interest rates than most banks with no account minimums. 

Fintechs like Betterment have seriously disrupted the brokerage industry. Now, they are shaking up the banks! Betterment is now offering a low risk investment option for that extra cash parked in your bank account.

Smart Saver Yield

Importance Of The Emergency Fund

I want to share with you an excerpt from our free guide to investing in the stock market. It is important to understand why we recommend that most people keep some cash on the side for emergency or for a rainy day.

Most people do not plan on going into debt. Usually, debt is a result of a lack of planning. An emergency fund will eliminate the future need for debt. A general rule of thumb is that you should have enough money in a liquid account like a checking account to cover all of your expenses for the next 6 months. You can contribute to your investing account as well as your emergency fund at the same time.

Betterment offers investments in the stock market for those looking to grow their money over time, but you should not be investing cash that you are planning on using within the next 5 years. The reason behind this is because the stock market does not go up in a straight line. There are hills and valleys along the way, and in the short term you could be down 20% or more based on your risk tolerance.

But what do you do with that extra cash in your bank account earmarked for a home purchase in a few years? Or your emergency fund? You don’t want to invest that money in the stock market. In the event that the stock market takes a dive, you would have to sell at a loss to liquidate

On the other hand, you don’t want to lose the buying power of your money either! If you don’t plan on purchasing that home for a few years, you will be losing money every single year if you leave it in a low yielding bank account.

Inflation Loss Example

According to Bankrate, the average checking account is currently yielding 0.06% per year. On average, inflation sits at around 2% per year. This table will demonstrate the loss of buying power each year on money left in a bank account yielding 0.06%, the national average.

Deposited AmountInterest Earned (0.06%)Inflation (2.00%)Net Loss
$100$0.06$2.00$1.94
$1,000$0.60$20.00$19.40
$5,000$3.00$100.00$97.00
$10,000$6.00$200.00$194.00
$25,000$15.00$500.00$485.00
$50,000$30.00$1,000.00$970.00
$100,000$60.00$2,000.00$1,940.00

Each year, the buying power of the money in your low interest bank account is deteriorating. One of the best comparisons I have heard is that inflation is like having termites in your house. Day by day, it goes unnoticed. The real damage is done over a long period of time.

How Does Smart Saver Work?

  1. Betterment will analyze your spending over time and calculate how much idle cash is in your account.
  2. Once Betterment understands your cash needs, they will make sure you always have a cushion in your bank account using a two-way sweep between your accounts.
  3. Betterment will then transfer any excess cash to your Smart Saver account to be invested. Betterment will always let you know before they move your money. As of the date of this article, Betterment Smart Saver accounts are yielding 2.20%.

Smart Saver Versus Bank Account

One of the drawbacks of Smart Saver for certain investors is that there is no FDIC insurance on Smart Saver deposits. FDIC insurance protects your deposits in a bank. Since Betterment is not a bank, so you are not eligible for this protection.

Typically, you will find that FDIC insured bank investments like checking, savings, money market accounts and CDs offer a rate of return that does not exceed inflation. Some online banks might be able to offer better rates since they do not have any brick and mortar locations. Another con with a bank CD or certificate of deposit is the fact that your money is locked up for set period of time. If you need to access that money, you will most likely be paying a penalty for early withdrawal. Smart Saver will get your funds to you within 4 to 5 business days with no penalty.

You are insured through Betterment under SIPC. This is insurance designed for brokerage firms like Betterment. In the event that Betterment goes insolvent or loses your investments, your protection is $500,000, which includes a $250,000 limit for cash.

Smart Saver invests your deposits in a variety of securities. The allocation is 80% in short-term government bonds and 20% in short-term investment grade bonds.

80% iShares Short Treasury Bond ETF (SHV)

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SHV Fund

The majority of the money invested through Smart Saver will be allocated into this short term treasury bond ETF offered by iShares. Betterment tends to invest your money in funds offered by Vanguard and iShares as they have some of the best products on the market with the lowest fees.

US Treasury bonds are considered to be the safest investment out there outside of bank insured investments. When you purchase these bonds, you are essentially loaning your money to the federal government. The only way you would lose that money is if the federal government defaulted on their obligations to repay. That would mean the entire US government would have to collapse!

Since this is a short term fund, it is holding bonds with a maturity date between one month and one year.

One of the pros of investing in US Treasury bonds is the fact that the interest earned is tax exempt on a state and local tax level. Ordinary interest income from a bank is taxable on a state and local tax level. Typical interest paid from a bank is taxed as ordinary income. You might not be familiar with this because most people do not meet the minimum interest payment threshold to receive a tax form from your bank. It is still your responsibility to report this income. If your interest income from a bank account is over $10, they are required to send you and the IRS a form.

20% iShares Short Maturity Bond ETF (NEAR)

 

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NEAR Fund

The remaining 20% is allocated into another iShares product. This is a fund that holds short term corporate bonds. This fund invests your money in a collection of different bonds from corporations like AT&T and General Motors.

These bonds are all investment grade bonds, meaning they are debts owed from borrowers with good credit. Corporations are rated by Moody’s and Standard & Poor’s to give investors an idea of how responsible they are with debt. Similar to a consumer credit score, each corporation gets a rating.

Interest from corporate bonds is taxed as ordinary income.

How To Get Started With Smart Saver

  1. Open a Betterment Smart Saver account.
  2. Create a Betterment account.
  3. Link your bank account to allow Betterment to analyze your spending.
  4. Manually or automatically invest your extra cash.

FEATURE: Two Way Cash Sweep

Two Way Sweep allows Betterment to easily transfer cash between your bank accounts and your Smart Saver account. Once you have too much cash built up in your bank account, Betterment will notify you and suggest you transfer excess cash to your Smart Saver account. If your bank account reaches a low threshold, Betterment will transfer your cash out of Smart Saver to your bank account.

Two-Way Sweep - Betterment
Two Way Sweep

The Smart Saver feature allows you to put your savings on autopilot. You won’t have to worry about building up too much cash in your bank account. Using Smart Saver will allow you to earn a fair amount of interest in an account, readily available at your convenience.

FEATURE: Cash Analysis

Betterment pairs its Smart Saver feature with another useful tool called cash analysis. Cash analysis will analyze your spending and using a cash flow analysis will determine and suggest how much cash to deposit into your smart saver account and how much you should leave in your bank account for expenses. This feature will help you invest your excess cash, as well as maintain an appropriate balance in your bank account. 

Cash Analysis - Betterment
Cash Analysis

Why Use Betterment Smart Saver?

Everyone always tells us that holding too much cash in our bank account is not the right decision. But, why is this? The main reason being inflation.

Inflation will slowly decay your savings each year, it has averaged 1.5% to 2.0% annually over the past 30 years. 

This means the purchasing power of our savings is decreasing each year by 1.5% to 2.0%. Our $100 saved today will only buy $98 worth of goods in one year. Over time this can really add up and take a toll on all the hard earned money we’ve saved.

Just as compound interest works in our favor, inflation can have a negative compounding effect on our savings. For example, cumulative inflation from 1913 to 2013 was 2,275%. This means prices increased almost 23 times. Yikes…

Investing is the tool we use to combat inflation. If we can earn a return equal to or greater than the inflation rate then we have won the battle. Unfortunately, interest rates on bank savings accounts have been extremely low for the past few decades. A bank account interest rate at 0.06% has no shot in beating a 2% inflation rate.

What Other Options Do We Have?

Currently, there are few options to obtain a reasonable yield on our cash. Let’s review some of the alternative options to a bank savings account.

Online Banks – There are a few online banks that are offering above-average interest rates right now. Many times these accounts will have minimum balance requirements. Ally Bank is an online-only bank that is offering a 2% interest rate on savings account deposits. This is a great offer, and also comes with no account minimums.

Money Market Accounts – Over the past few years, short-term interest rates have risen considerably. As a result, certain money market accounts are now yielding between 1.5% to 2.5%. Be cautious, depending on the fund you may have a minimum deposit in order to invest.

Certificates of Deposit – CD’s have always been an option to park your short-term cash. The one downside is that CD’s often have low liquidity, meaning it can be difficult to sell your investment and receive your cash. Currently, most CD’s are offering a range of interest rates right now ranging from 2% to 3% depending on their maturity. However, investors should be cautious as CD’s can come with early redemption fees for early withdrawals.

As short-term interest rates continue to rise, investors will continue to have a variety of options to stash their short-term cash savings. With bank savings account interest rates being so low right now, Smart Saver may be an excellent alternative. Smart Saver and Smart deposit are great tools for the everyday investor.

If you’d like to give Smart Saver a try, sign up here!

How To Make A Monthly Budget (That You Actually Stick To!)

You know you’re officially a responsible adult when you actually sit down and write out a budget. Our job is to motivate you to put this on the very top of your to-do list.

But first we want to offer the following (scary) facts about what happens when you DON’T stick to your budget:

  • The average American household carries more than $135,000 in debt. This includes mortgage loans.
  • A whopping 75 percent of Americans are in debt.
  • The sum of consumer debt totaled $3.898 trillion in 2018, representing a leap of 7.6 percent over last year.
  • Excluding a mortgage, average consumer debt per capita hovers around $11,800.
  • 88 percent of graduates from private colleges had student loans.
  • People are using way too much plastic! The average credit card debt is around $5,800 for households that carry a balance – which by the way is 43 percent!
  • About 15 percent of American families are living well beyond their means. In other words, they are spending more than they earn on a monthly basis.
  • According to recent reports, credit card debt hit $810 billion in the first quarter of 2018.

Why are we throwing all this grim news in your face? #1, to educate you with the startling statistics that many adults are facing. Then #2, to help you find a way to stay OUT of that pool of percentages.

The solution? Three words: Make A Budget. Then three more words: Stick With It.

Budgeting.jpg
Budgeting Your Money, Flickr

For starters, toss out the notion that having a budget is a bad thing or that you have to wrestle with columns of numbers to make the bottom line tied up in a neat and tidy knot. Sure, you want your expenses to be equal or less than your income, but we promise, this can be done without an excessive amount of sweat (or tears).

A budget is simply a plan for how you will spend your money. And it’s also an accurate assessment of how much money you earn.

Living within a budget is actually the opposite of stressful, because you will have complete control over your money and your spending habits. We’ve all been victims of shopper’s remorse, where we over spent and felt terrible about ourselves. Worse, still, the things we bought were non-returnable! If you have a budget, all your purchases will be planned except for small splurges. You will know at all times what you can afford and what will get you in over your head. After all, wouldn’t you rather save up for a week in the Caribbean than toss it away buying drinks for your friends every Friday night?

Like all things in life, moderation is key here. If you map out a too rigid budget, you will want to rebel in the same way you scarf down cookies at 2 a.m. after a day of kale and unflavored mineral water. Keep your spending plan doable by building in flexibility. There are times of the year – like the month of December – in which you will spend more, but make up for it with a lean January. A budget can be a very positive addition to your life because you will have a better handle on your finances. No more throwing money away on things you can’t even account for. What’s more, a budget can help you squirrel away money for a car, college, a vaca, or your first house.

Expenditures are what it costs to live your life. Some are fixed, such as rent or car payments. Others are variable, like weekly groceries and weekend entertainment.

Income is any money you receive, such as your paycheck. You can always beef up your income with a part-time job or side hustle.

Probably not the best idea to jot your budget down on the back of a paper napkin at the coffee house on a Saturday morning. You want something semi-permanent that looks official so you will respect it.

In order to stick with your budget, you have to find some way to organize it and keep an eye on it. If you want to go low-tech, draft up a spreadsheet with columns for income and expenses. You can use Excel (or a similar program) to effortlessly total columns. In other words, it does the math for you.

If you’re not fluent in Excel, take a class and learn it for goodness sake, because you will use it in virtually every facet of your life.

Here is a video from one of the blog authors on how to create a monthly budget in excel!

Have a smart phone? There are dozens of easy to use apps at out there to choose from.

In other words, there are tons of tools out there to help you, including online budget sheets, software, and spreadsheets. The key here is to find a system that works for you. While it won’t be as much fun as beer and hot wings, making a budget shouldn’t be grueling.

Budgeting Your Money 101

Step 1: Identify your goal.

Maybe you just want to track where your money is going on a weekly basis. Or maybe you want to start saving up for a new toy, or better yet, to have a cushion if you did
happen to lose your job (industry experts recommend stashing away at least three month’s worth of income for emergency savings). Maybe you’re working your way out of debt. Or working hard not to get into it. Setting your goal is a good way to see the big picture before you start tracking every dollar you spend.

Step 2: Determine your income.

This can be from a single job, or, if you’re smart, from your main job and your side hustles. List every source of your income and total that on your budget sheet.

If you work on commission or via client contract, get a handle on your monthly income by averaging your payments over the last 12 months. Remember, too, that this income isn’t always consistent, so plan ahead for the leaner months.

Step 3: List your monthly expenses.

Itemize your monthly expenses including fixed costs such as utilities, gas for your car, rent or mortgage payment, cell phone, internet, water, loan payments, etc. Then list all your variable expenses, and be honest with yourself about this column. No, sushi dinner every night is not a variable expense.  It’s a splurge (more on this later).

However, your grocery costs would be considered variable because you have ultimate control over what you spend. Yes, it’s nice to buy brand labels, but generic store brands are just as good and will save you a bundle.

Another pro tip is to cut down on your liabilities. These are things that you own that are regularly taking money out of your pocket. Think; boat, RV, motorcycle!

Step 4: Prioritize items.

Start with the things you absolutely need or are committed to pay. This ensures that you have money for the most urgent needs.

Step 5: Add your “guilty pleasures” at the end.

This includes everything from Friday night pizza to movies on demand.

Step 6: Plan for the unexpected.

Adding an allotment for an emergency fund is a fantastic idea. Saving money for emergencies helps stamp out the possibility of future debt if you have a medical emergency or some other crisis arises.

Step 7: Look at the bottom line.

Total your expenses and see if they are equal to or lesser than your income. If you have income left, congrats! You have a surplus. If your expenses are more than your income, you’re looking at a shortage, and you will have to do some work to modify your budget (hint: take a second look at your splurges).

Step 8: Revisit goal setting.

Set both short and long-term goals. This is imperative to staying motivated. Maybe you’ve had your eye on a leather jacket or backpack. Or, longer term, you want to upgrade your ride. If you keep plugging away at your savings, following your budget to a T, and staying accountable (no, you don’t need to track every penny…but you need to know where you’re tossing away $20 bills) you can meet or even exceed these goals.

Remember that a budget is meant to be fluid and flexible. Things can change (and they usually do!) Your income may go up (Yay!) or you might pay off your car loan. Conversely, you may have unexpected car repairs or a doctor’s bill for that stubbed toe that turned out to be broken.

Budgeting By the Numbers

There are some budget ratios people swear by that may work for you as well. One is the “50/30/20” rule. This refers to allocating 20 percent of your income should go towards savings. Meanwhile, another 50 percent (maximum) should go towards necessities, which leaves you with 30 percent going towards discretionary items. This rule of thumb is popular, quick and rather easy to follow.

Get Over The Excuses!

“I don’t have enough money to budget.”

You’re living, right? You have a roof over your head and clothes on your back and food in the pantry? Then you have enough money to organize and track. Chances are good you will surprise yourself when you see how much of your income is going out the door on discretionary spending.

“It’s too complicated/time consuming/boring.”

You work at least 8 hours a day, right? Clean your apartment? Stand in line at DMV?
These are prime examples of the mundane aspects of life. Making a budget will take less time than helping your mom program her Roku. Once constructed, it’s all a matter of updating numbers weekly and then congratulating yourself on a job well done.

“Budgeting makes me feel worse about my money.”

Actually, budgeting empowers you by giving you a full picture of your spending habits as well as the many areas in which you can change them. There’s nothing worse than having nothing to show from your paycheck. Budgeting is a positive step in financial freedom.

“Budgeting will force me to eliminate things I like.”

You will have a category in your budget for discretionary spending, and so if you want that croissant, have it! Just track the money you shell out for bakery items and if you’re not happy with what you see, change your routine. And maybe start baking.

Here are 11 handy, even humorous, suggestions for keeping your lifestyle within your budget boundaries.

  1. Don’t carry your credit cards around every day in your wallet, or for that matter, near your computer with access to online shopping.
  2. Pay for purchases with cold hard cash! It’s amazing how reluctant you will be to part with those $20s when you physically see your hard-earned money going for that latte or lunch.
  3. Along the same lines, put a specific amount of cash in an envelope for the week, and when it’s gone, it’s gone. This will make you think twice about those little nickel and dime expenses and limit impulse spending. In a very short time, you will find yourself toting around an insulated coffee container from home rather than stopping at Starbucks.
  4. See how far you can stretch that cash. If you pass up the fancy salad for lunch, you will have enough cash for movie tickets Saturday night.
  5. Track every dollar! Save all your receipts and review them every weekend to analyze your spending habits over time.
  6. Make smart choices. Choose water over soda. This applies to the soda machine you visit at work during the 3:00 slump and also your order at restaurants. If plain water isn’t palatable, add a lemon wedge or cucumber slice (which of course you bought on sale!)
  7. Be vigilant, even obsessive, about keeping an eye on your checking account balance. You will be surprised at the small purchases that add up to a major hit on your bottom line.
  8. Keep a copy of your budget in a place where you will see it every single day. Tape it to your fridge. Use it as your home screen saver. Go crazy, laminate it and prop it up next to your computer. Be creative, but be committed.
  9. Borrow, don’t buy books. Yes, there is still a place called a library that stocks a good inventory of best sellers. Or snag books from friends who recommend them. Bonus: you can give them back after they’re read, saving you space in your apartment.
  10. Use every drop of that laundry detergent. Fill the bottle with water and shake it out. This also goes for dish soap, shampoo and any other bottled liquid. You get the idea here.
  11. Take at least 24 hours to consider anything other than minor purchases. Sleep on it.

Making a budget – and sticking with it – is a rite of passage for young adults who want to manage their finances, rather than having their finances overwhelm them. Remember, you can always add to the income column with a side job, or subtract from the expenses by wearing your Nikes for one more season. Be creative. We know you’ve got it in you.

Once you have a budget established and your spending is under control, another step you might want to take as an adult is to begin establishing credit. Your future self will thank you! Check out our comprehensive guide on credit scores.

Got a budgeting tip to share with us? Comment below!

Assets Versus Liabilities: A Rich Dad Poor Dad Lesson!

This article is a guest post from the blog Investors On The Rise.
A very important lesson I have learned throughout my self studies of personal finance is from the book by Robert Kiyosaki known as Rich Dad Poor Dad. This is where I learned the true difference between assets and liabilities. Now, the Google definition of an asset is a useful or valuable thing, person or quality. The definition of a liability is the state of being responsible for something. These definitions are very unclear, so I hope to shed some light on them!

I learned from reading this book that an asset has the power to bring money to you and a liability takes money away from you. Throughout this article, this will be the definition we are going to use as we dive into the mind of Kiyosaki. I hope to share with you a different perspective of your own assets and liabilities. This different mindset may help you when it comes to making the difficult money decisions made on a regular basis.

What Are Assets?

Try to spin the traditional definition of an asset on its head. We are going to talk about what I believe is the true and most important definition of what an asset is. An asset is an investment tool that brings in cash flow.

Perfect examples may be real estate, dividends, or royalties. There are many different types of assets. Not all have the power to generate cash flow, but purchasing assets that do can be a tremendous wealth builder.

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Rich Dad Poor Dad Cash Flow Chart

There are some charts in the book that show how most middle class people live today. If you are not careful, you could fall into this yourself. As you can see in the picture above, most people rely on their one source of income which is their salary from a job. They then proceed to take on a lot of expenses and liabilities. This, in turn, is what people use as I believe excuses as to why they can’t invest their money into assets. Or, they have some of the other beliefs such as “money is the root of all evil, I don’t need money to be happy, etc.”

If people took the money they spent on unneeded liabilities and purchased assets that will generate income, such as rent from a rental property, dividend income from dividend paying stocks, bonds, notes, etc. you could completely change your financial outlook.

You may be a lot better off in not only your financial life, but in your personal life as well. You will stress less about money and the less you stress, the happier you are! Imagine instead of having to pay out $100 a month towards a liability such as your car payment, you instead earn $100 from an asset such as from your dividends. It would most likely put a smile on your face (because I know for me, it does!) For certain assets, you could reinvest your earnings and get your best friend compound interest on your side. A change of your mindset about money can have a tremendous impact on your life.

One of the biggest challenges when building assets is that it can take a long time. If you don’t have the upfront cash to put in right away, it can seem difficult to get started. As someone who is building up my assets slowly, but surely, I can tell you that it will be worth it in the long run. Eventually, you will have multiple streams of income working for you. Diversifying your income is a great wealth builder. Having this freedom will allow you to do things you wouldn’t be able to do otherwise.

What Are Liabilities?

These are what you need to stay away from! These are car loans, mortgages, credit card debt, school loans, etc. that just eat away at the hard earned money you make. Not all liabilities are bad, but many times liabilities can quietly destroy your cash flow without you even noticing. How can anyone get ahead in life if they only have one source of income with no assets while at the same time keep racking up expenses and liabilities? It is near impossible to attain financial freedom when you are spending more money than you make. Now, certain liabilities can be good such as a mortgage on a rental property. At this point, it is an asset not a liability because that rental property will put money in your pocket. I would try to eliminate as many liabilities as possible so you can purchase income generating assets.

Write down a list of all your liabilities and see which ones you can get rid of so you can increase your cash flow and purchase more income generating assets. Your mindset plays an extremely important role when it comes to dealing with liabilities. You have to maintain a strong mindset and stick through the tough times in order to reach financial freedom.

You can’t have the following money mindsets:

  • Negative thoughts about money
  • Believing you can get rich quick
  • All talk, no action
  • Negative thoughts about being wealthy

Eliminating these thoughts from your mind is one of the essential steps when cutting down on liabilities and expanding your assets.

Overall, I hope this “new” definition of what an asset and liability are will help you in your future endeavors when it comes to financial freedom. By working on building up your income generating assets, such as dividends from stocks while at the same time working on eliminating liabilities, you will increase cash flow and your overall take home pay. I would recommend reading Rich Dad Poor Dad as this lesson that I learned will forever be one of the most valuable pieces of information when it comes to money.

How Does Webull Make Money?

Investing Simple is affiliated with Webull. This relationship does not influence our opinion of this platform.

Webull is a commission-free stock and ETF trading platform and designed for the active trader who is looking for a more dynamic user interface. Webull has built an ideal platform for active traders, and they are currently offering their service completely FREE. In this article, we will explain how Webull offers such a great service at no charge.

Check out our detailed review of Webull here.

Webull App

Webull FREE stock promotion: If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click here to open an account with Webull!

You might be wondering what Webull gains from offering their service at no cost. Webull is looking to acquire more users and gain market share in the brokerage industry. There are a few different ways the brokerage makes money.

Paid Subscriptions One of these avenues is offering paid subscriptions to market quotations. For example, if you wanted access to TST Level-1 you would pay them $4.99 a month or $53.99 a year. Traders who want better features and more current prices will be interested in this service.

Margin Fees Webull offers trading on margin on their platform. Fees to trade on margin begin at 3.99%. This is another way Webull makes money. Trading using margin can be common for active traders. As the Webull platform is designed predominately for traders, this will be a service that may be frequently used.

Interest – Webull will make a small margin on any idle cash held in accounts across the platform. The cash is invested in short-term funds or money market accounts in order to capitalize on cash not being put to use. It may seem like a small amount to gain for Webull, but investing tiny amounts of cash across all their accounts can add up to a significant amount of interest over time.

Market Rebates – Many free brokerages such as Webull make money by selling order flow. This means that Webull will sell block orders of securities to other firms or market makers. These market makers provide a better service when they have higher trading volume on their exchange.

Webull makes investing using a mobile app convenient considering how many features it offers for free. If you would like a free stock then use the link below to sign up for an account with Webull.

Click here to open an account with Webull!

Webull vs ETrade: Which Is The Better Investing Platform?

Investing Simple is affiliated with Webull. This relationship does not influence our opinion of this platform.

Webull VS E-Trade

What Is Webull?

Recently, a number of new brokerage platforms have emerged. One of the more popular platforms is Webull. Webull is a commission free stock and ETF trading platform. Webull is designed for the active trader who is looking for a more dynamic user interface. Webull has a variety of features that benefit traders such as technical indicators, research agency ratings, financial calendars and free margin trading as well as short selling. With easy access to margin, research tools and live data, Webull has built an ideal platform for active traders.

Check out our detailed review of Webull here.

Webull Trading App

Webull is a platform that is designed for the intermediate trader who already has some experience with the stock market. If you are a complete beginner, you might experience information overload. If you are a somewhat experienced trader, Webull will give you all of the data you will likely need!

Webull Free Stock Promotion!

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

Webull App Features

Real-Time Market Data: Webull offers real-time market data for all US markets. This ensures you are viewing consistent real prices in real time, making sure you are making the right investment decisions based on accurate data. This feature is extremely important for active traders who need price accuracy down to the penny.

You may also have access to real-time global market data on the Webull platform. There is a monthly fee for this feature. This is charged on a monthly subscription basis and the fee differs by market.

Webull Real-Time Market Data

News Stream: Webull offers real-time financial news through the news stream feature. Articles from Reuters and Bloomberg and other financial institutions are available through this feature. This can be extremely helpful in getting the most up to date news articles and possibly making important trades on breaking news for specific companies. This feature provides a single location to view financial news as well as providing a mixed collection of high quality content giving you a variety of different points of view on specific topics.

Webull News Stream

Virtual Trading Simulator: Webull offers a virtual trading simulator on their platform in order to learn new investing strategies without any risk. This is a valuable feature if you are trying out new trading strategies you’ve never used before. It can also be helpful in testing out a simulated portfolio before risking any real money. Anyone who is new to investing should first start out by using a trading simulator. This way you can gain experience and knowledge without taking any real risk. Webull is one of the first platforms to offer a built-in trading simulator!

Agency Ratings: Another feature offered by Webull is the ability to track and see professional analyst ratings on certain stocks. Rated stocks will have a number of ratings by professional rating agencies and firms. They will rank the company as a buy, sell, or hold and sometimes ratings in between.

The screenshot below shows a company with 40 analyst ratings as well as the trend over time. Institutional analyst ratings can give you an idea of what Wall Street is saying about a certain company or fund.

Webull Agency Ratings

Smart Alerts: Webull gives you the ability to set a variety of smart alerts that will notify you if a specific holding hits a defined price, moves a defined percentage, or has reached a specific volume level. These smart alerts can provide a system for executing trades at a certain price level or after a series of volume or price changes. Tools like this allow traders to be more effective and efficient when trying to execute trades over a period of time.

Financial Calendar: Webull offers a financial calendar that keeps you informed on upcoming financial news for the month. The financial calendar tools keeps track of upcoming IPOs, earnings releases, and which companies are about to pay out dividends. This tool provides a consolidated calendar of events, keeping you informed on upcoming market events all on one screen.

Margin Trading: Webull offers easy access to margin trading on the platform. You must have a minimum account balance of $2,000 to be approved for margin trading. When trading on margin you are virtually pledging the assets within your account as collateral to borrow money and invest it in more securities. Webull will lend you these funds for a fee at a specific interest rate. If your account drops below $2,000 you run the risk of a margin call and forced liquidation of your funds. Margin creates leverage which could increase potential returns, but carries significant risk as it could also amplify losses.

Webull Margin Rates

Technical Indicators: Webull prides itself on the usability of its platform for serious traders. Many traders use technical price indicators to indicate ideal buy and sell levels. The platform gives you access to 22 technical indicators for developing trading strategies.

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

What Is E*Trade?

E-Trade is one of the top investing platforms available today. E-Trade is a full-service brokerage that allows you to invest in stocks, bonds, options, ETFs, Mutual Funds, Futures and Forex. With multiple investing platforms, research tools, education center, and more its features may justify the $6.95 commission fee per trade.

E*Trade Logo

The core difference between E-Trade and Webull is that Webull does not charge any commission for trades placed on the app. E-Trade offers features above and beyond what Webull has to offer, however.

E-Trade has a $500 minimum account balance and will allow you to invest with as little as a few hundred dollars. E-Trade offers one of the most dynamic investing platforms available today. From executing orders as a day trader to having your investments managed for you, there is a tremendous amount of flexibility on the E-Trade platform.  

Investments: E-Trade allows you to invest a variety of different asset classes, funds and currencies. E-Trade investments: Stocks, bonds, ETFs, Mutual Funds, Forex, Options and Futures.

Managed Accounts/ E-Trade Capital Management: Active ongoing portfolio management by E-Trade. This is full-service portfolio management offered by E-Trade if you have a minimum account balance starting at $5,000. E-Trade will build a portfolio of ETFs and Mutual Funds that matches your risk, time horizon and goals. E-Trade will handle all the rebalancing of your account as well as tax management in your portfolio. There are 3 tiers of management, Core, Blend, and Dedicated…

Core Portfolio

  • Minimum $5,000 investment
  • 0.30% flat fee.
  • ETFs only
  • Tax Sensitive Portfolios
  • Socially Responsible Investments
  • Smart Beta Investments
  • Help from a managed account specialist

Blend Portfolio

  • Minimum $25,000 investment
  • 0.65%-0.90% blended annual fee
  • ETFs and Mutual Funds
  • Tax Sensitive Portfolios
  • Socially Responsible Investments
  • Smart Beta Investments
  • Help from a Financial Consultant and a managed account specialist

Dedicated Portfolio

  • Minimum $150,000 investment
  • 0.95%-1.25% blended annual fee
  • ETFs, Mutual Funds, Individual Stocks
  • Tax-sensitive portfolios
  • Tax loss harvesting
  • Socially Responsible Investments
  • Category and Security Restrictions
  • Ongoing one on one relationship with a financial consultant

Investment Assistance: E-Trade offers investment assistance through E-Trade Securities LLC. E-Trade will help you create an investment plan as well as help you manage your portfolio’s risk.

E*Trade Trading Platforms

E-Trade Web Platform – For most people, the E-Trade web-based platform has more than enough features and tools available to investors. You can research companies, use screeners, access to third-party research, news, live quotes, and charts.

Advanced Trading – OptionsHouse: E-Trade purchased investing company OptionsHouse in order to offer an advanced trading platform within their scope of service. You can trade stocks, options, ETFs, and currencies within OptionsHouse. You have the option to choose from idea generating ideas such as options chains or trading laters all with real-time data.

E*Trade OptionsHouse

Mobile App: The E-Trade mobile app is focused on a user friendly experience. We believe this mobile app could be one of the best and most dynamic out of all the investment platforms we have reviewed so far.

E*Trade Mobile App

E*Trade Account Fees

Stock Trades: $6.95/Trade ($4.95/Trade if you trade 30+ times per quarter)

Options Trades: $6.95/Trade + $0.75/Contract ($4.95/Trade when you trade 30+ times per quarter)

Mutual Funds: $19.99/trade

Commission Free ETFs: E-Trade offers over 250 commission free Exchange Traded Funds (ETFs) on their platform. As well as over 4,000 no-load mutual funds.

Account Types:

  • Individual Taxable
  • Joint Taxable
  • Traditional IRA
  • Roth IRA
  • SEP IRA
  • Simple IRA
  • Coverdell
  • Trusts
  • Custodian
  • Solo 401(k)

The Verdict

E-Trade is a great platform for a variety of different investors and traders. We believe E-Trade may be one of the most dynamic platforms available today. As a full-service brokerage, there are many different approaches you can take when investing with E-Trade. We believe it is a great platform for an experienced investor. When compared to Webull, we believe the two platforms have many similarities. Both are great platforms for traders and for experienced investors. Webull has the advantage with completely free trading fees. This could be a game breaker, especially for investors who are fee sensitive or those who have smaller accounts.  

Webull Free Stock Promotion!

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

How To Build And Improve Your Credit Score In Your 20s

We at Investing Simple are not financial advisors. While we are sharing best practices, your situation is unique. If you have any doubts, your best bet is to talk to a financial advisor about your personal situation.

Here’s something that doesn’t always come up in everyday conversation: your credit score.

You’ve seen the commercials about obtaining your credit score, but what, exactly, is a credit score?

For those looking for a bit of nostalgia, watch this video…

It’s actually very simple: your credit score tells lenders how trustworthy you are based on your financial history.

But what if you have absolutely no financial history? No worries. Many younger adults are facing the same dilemma. The good news is this: you can start TODAY to build up a credit history that will set you up for a healthy score tomorrow.

That means you’ll be able to secure loans you need for purchases like a car, or a lease to rent an apartment, or eventually, even a mortgage for a house. Even better, you will get those loans with competitive interest rates rather than having to pay more because lenders aren’t sure you know how to handle money.

A Brief History Of Credit Scores

FICO score is a type of credit score created by the Fair Isaac Corporation. Upwards of 90% of top-notch United States lenders use FICO scores. Before FICO scores were in place, the process of getting loans was in slo-mo, and could also be easily unfairly biased.

Flash forward to today, when credit scores give lenders a fast, objective measurement of your credit risk. Credit scores level the playing field. Factors like your gender, race, religion, nationality and marital status are not considered by credit scoring. Scores can also be delivered in the blink of an eye, helping lenders speed up loan approvals. Today many credit decisions can be made within minutes.

Even a mortgage application can be approved in hours instead of weeks. Scoring also allows retail stores, Internet sites and other lenders to make “instant credit” decisions.

Credit dings now have a shelf life. Prior to use of FICO scoring, any delinquency on your part could mar your financial history for decades. Now, past credit problems fade as time passes and more up-to-date timely payments will replace them.

What Credit Score To Aim For

Investing Simple is affiliated with Credit Land.

Credit scores generally run with a range between 300-850. For most people, their score falls between 600 and 750, with a score of 700 or above considered good. Log in a score of 800 or above, and you’ve reached the status of excellent.

The higher your score, the more likely that you’ve made very good credit decisions. This, in turn can make creditors more confident that you will repay your future debts and fulfill your commitments to them. You win, they win. No brainer.

Curious about your score? Check it here.

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FICO Credit Score Range, Flickr

If you have been irresponsible in the past with credit card use, don’t sweat it. The good news is your credit score can be repaired! Derogatory marks against your credit are not permanent. Even with a bad credit score, you can still get approved for some credit cards to rebuild your credit and start fresh!

Who Looks At Credit Scores?

Credit scores are used by lenders, including banks, that provide mortgage loans, credit card companies, and even car dealerships financing auto purchases, to make decisions about whether or not to offer a credit card or a loan.

Just as important as loan approval is what’s in the small print: the terms of the offer. Terms include the rate of interest and the down payment. As you can imagine, you want to secure a loan with the lowest possible interest, and if you’ve hit a home run with a credit score of, say, 820, you’re in a much better position to negotiate.

How Long Does It Take To Build Good Credit?

It doesn’t take an inordinate amount of time to build up a solid credit history. According to information from some of the major credit bureaus, you can build an average or good credit score in about a year or two. But beyond that, it can take as much as five to seven years to build an excellent credit score of 750 or higher.

It’s possible to build good credit in just a handful of years, but you would need to open at least a few accounts of each type (loans and credit cards) and be 100 percent devoted to making payments on time. Keep in mind, the shorter your credit history, the more a single late payment will tarnish your reputation. And you’re shooting for gold here, not silver.

Most people with credit scores in the top 10 percent (around 800 or better) have at least 10 years of credit history. That’s because the average age of your credit accounts is one of the weightier factors for your score. The longer your accounts have been open and in good standing, the higher the score.

Here is a helpful video on how to build your credit score in 30 days!

Credit Score 101

Here’s a quick overview of factors that are top priority when launching your plan to build good credit:

  • Your payment history. Repeat this mantra: Pay all bills on time. Pay all bills on time. Pay all bills – you get it. A payment that’s 30 days late or more will cause your score to plummet.
  • Best practice calls for paying off the ENTIRE amount owed on a credit card every month, rather than carrying a balance over from month to month. That’s how interest charges rack up quickly.
  • How much credit you are using: Aim to use 30 percent or less of your available credit at all times. If you have a card with a $3,500 limit, by no means should you go crazy and charge $3,499 worth of purchases.
  • The length of your credit history does come into play, but if you’re only in your 20s, lenders aren’t expecting you to have decades of spending history. They know you didn’t start borrowing and paying back money when you were a toddler.

6 Tips For Building Your Credit Score

1. Talk your parents into letting you become an authorized user on their credit card.

Beg, bribe, cajole, do whatever it takes to get your name onto Dad’s credit card, because this option allows you to benefit from the age of someone else’s account (and we all know how o-l-d Dad is!)

One quick caveat: Be certain that the primary cardholder (Dad) has an excellent track record of making payments. You don’t want to hang on the coattails of someone with their own credit woes!

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What you are looking to avoid… (source)

Also, always be certain and get confirmation that the credit card company reports authorized user activity to the credit bureaus. This is what will pop a positive blip onto your score. You want the activity on the card to spotlight your smart spending as well as Dad’s.

This tip also works for suckering – I mean, convincing – Mom, another family member or even an older friend to let you become an authorized user.

2. Get a secured credit card.

If you didn’t manage to sweet talk the parental units into adding you as an authorized user, go to your bank or credit union for a secured credit card. These require a deposit, which usually runs from $200 to $2000, which becomes, in essence, your line of credit.

As you can imagine, you will need an income to qualify for a secured credit card, but for this type of credit, rules aren’t as stringent as those that apply to obtaining a traditional unsecured card.

Banks and financial institutions that issue secured credit cards have their own rules and regs for where your deposit must be – such as a checking or savings account.

Then – and this is crucial – pay off the balance on the card MONTHLY and ON TIME to avoid late fees and other penalties. Remember, if you’re not showing consistent payments, you’re not building credit, you’re digging yourself into a hole.

Also, do your due diligence and check that reports are made to at least one credit bureau. That’s the only way to ensure your efforts won’t be for naught.

When your score rises into the low 600s, make your best effort to get yourself a conventional credit card. Even though by that time you’ll be playing in the big leagues, keep your wits about you and follow the same best practices for paying off your debt each month to avoid interest and late fees.

Ready to get started? Apply for a secured credit card here!

3. Get a cosigner.

Ok, so failed on the scheme of becoming an authorized user on Dad’s credit card? Guilt him into this option then. Take out a small loan, say for a standard grade preowned vehicle, and ask that loving family member (who already has good credit) to cosign for you.

A cosigner is simply someone who agrees to be responsible for the loan if you stop paying your bills for any reason. Which, of course, you won’t do.

Most financial institutions will approve a loan for somebody with no credit history IF there is a cosigner boasting a stellar score on the application. But keep in mind, you stand to put your dad’s credit score in the toilet if you default on the loan.

What does default mean? It means you – gasp – stop making payments entirely. Let us say this one more time: If someone cosigns a loan for you and you don’t make timely payments, your cosigner’s credit will suffer along with your own.

If you default on the loan, your cosigner is legally responsible to repay the debt. This situation has ruined plenty of close relationships and broken up even the best of friends. Proceed with caution.

Credit Score Mem.jpg
Getting a loan with a BAD score… (source)

4. Take out a student loan.

You’ll start building a flourishing credit history as soon as you open a student loan account. Every type of student loan, including private, federal and refinance loans, appear on your credit report, and eventually count toward your burgeoning score.

Borrow federal loans first, since they have better borrower protections, like repayment plans strongly based on your income, as well as forgiveness subplans.

More good news: Most don’t even require a credit check.

For starters, fill out the Free Application for Federal Student Aid (FAFSA) to get your application rolling.

Private student loans are based on credit, so most undergrads need a cosigner to qualify. Keep in mind that the loan will appear on both your credit report, as the student, and the cosigner’s simultaneously. Before you take any steps towards applying, shop around. Compare multiple loan options to get the lowest interest rate you can possibly qualify for, then go for it.

After you’ve gotten the diploma and scarfed down the graduation cake and the loan has aged a bit, you can expect to see a score in the 600s. That’s the time to refinance your student loan to get a lower monthly payment and/or a lower interest rate. It also merges multiple loans into one main account. This will also give your score a boost, because you
will have fewer accounts with open balances.

5. Take out a credit builder loan.

Peruse the sites of local community banks and credit unions to see the terms they offer for credit builder loans.

This loan works by stashing away the money you borrow in a savings account. When you take out a credit builder loan, the money you borrow sits in a savings account, which you’ll have access to at the end of the loan term.

You’ll need income to show you can afford the payments, so choose a low loan amount.

As you make on time payments toward the loan, the financial institution reports that activity to the credit bureaus. You’ll end up with better credit and some money saved, making it a win-win.

When your score reaches the mid-600s, you can apply for a traditional, unsecured credit card. If you’re still under 21 at that time, though, you’ll also need to prove that you have a steady income from a full time job.

6. Take out a student credit card.

Student credit cards are designed for young people looking to obtain their first line of credit. This can be a much better option than those high interest store credit cards that the cashiers may lure you in to!

Typically, a student credit card has minimal or no cash back rewards. It is designed and is set up to help you build credit. It isn’t a secured card, but it is very similar. The credit limit is typically a lot lower than a traditional cash back credit card.

This can be a great option for students looking to enter the adult realm by using a credit card RESPONSIBLY! I repeat, responsible use of credit cards is the most important part. Buy your gas on your credit card and pay it off monthly, or even weekly!

Ready to get started? Apply for a student credit card here!

Nuts And Bolts Of Credit Reporting

The major credit reporting agencies are TransUnion, Experian and Equifax. They collect and disseminate info on more than a billion people and businesses across the globe.

These credit reports include 4 facets of information about you:

  • Identifying information. These are the general facts about you as an individual, your vital stats: name, address, social security number, birthday. This is used only to ID you; it doesn’t come into play when putting together your credit score.
  • Credit accounts, also known as tradelines. These are all your current and past credit accounts, reported by your lenders and creditors. These are your credit cards, mortgages, student loans or auto loans. They get right down to the nitty-gritty, such as the date you opened the account, your credit limit or loan amount, the account balance, and your payment history.
  • Inquiries. These are the various companies that have pulled a copy of your credit report, sometimes known as an “inquiry.” There are two types: “soft” inquiries and “hard” inquiries. “Soft” inquiries could be your own peek at your credit history, inquiries by companies extending you preapproved offers for credit cards, or inquiries made by your current creditors taking a look at your credit (aka account monitoring). “Soft” inquiries can only be seen by you, not potential lenders or creditors. “Hard” inquiries happen when a potential lender opens your credit history after you’ve applied for credit, maybe a new loan or credit card. These can sit on your credit report for up to 24 months. While hard inquiries do impact credit scores, soft inquiries do not.
  • Bankruptcies and collections. Anytime you’ve been – gasp – bankrupt (this will never happen to you, right? Right?) or had past due accounts turned over to collection agencies…. these will also be listed on your credit report. Be forewarned, open accounts with doctors, hospitals and even cable or utility companies could also be part of your credit report. So be smart, pay off your debts before they come back to bite you!

How The Credit Score Is Calculated

Now that you have a general understanding of credit scores, here are some meat and potatoes about the types of info used to calculate your score.

First, payment history.

Payment history is by far the most important factor in credit scores. Repeat this mantra: pay on time, pay on time. It is top priority to pay your bills on time, every time. Any late payment is going to have a huge impact on credit scores.

Your payment history accounts for about 35 percent of a credit score.

Second, credit utilization.

Utilization, or the amount of your credit limit vs. how much you’ve used. This is the second most important criteria in credit scores. You never want a balance to be higher than 30 percent of the credit limit on a single credit card. In other words, if your ceiling is $5,000 on a specific card, keep your balance under $1,500. In fact, the lower the utilization, the better it reflects on your score. And remember to pay balances off in full to sidestep interest charges.

People with the most stellar credit scores have zero late payments and utilization rates of less than 10 percent. Your utilization rate accounts for about 30 percent of your credit score. These two factors weigh in at almost two-thirds of your score. Paying your bills on time, every time, and keeping your balances low on your credit cards are the foundation of your credit score.

But wait, there’s more!

Third, credit history.

Length of credit history is based on the number of months or years each of your accounts has been open, and also how long it’s been since you used specific accounts. A longer credit history can increase your credit scores.

Length of your history represents about 15 percent of your FICO score.

Fourth, recent credit inquiries.

Recent activity looks at how much new credit you’ve applied for in the past handful of months. Applications for credit show up as new inquiries. Recent activity that comes into play also includes paying off any of your accounts, and whether account balances
have gone up or down significantly.

Recent credit accounts for 10 percent of a FICO score.

Fifth, credit mix.

Credit mix refers to the myriad types of accounts you’ve accumulated, such as mortgages, credit cards, auto loans, and other installment loans. Having a thriving variety of credit types can help increase your score somewhat, but don’t go crazy and apply for several accounts all at once to try to improve your credit mix! That rash move will probably do more harm than good because of the spike it will make in your recent credit activity. Make a vow to use credit judiciously, and you’ll gradually have a good mix of credit types over time.

The mix of various types of credit is 10 percent of a FICO score.

Here is a great video that explains how the FICO score is calculated.

Good News For Renters! (Pay Attention)

If you’re a tenant, there’s more good news: you can use your monthly rent payments to improve your credit score dramatically. If you’ve been a renter, your landlord has had the right to report you to credit bureaus for late payments, which is a powerful position. But even if you paid on time, every time, that good track record didn’t register on your credit score. Now, there’s rent reporting through sites like RentTrack.

Set up an account with RentTrack and pay your rent online, then watch your score build with all three credit bureaus. According to the site, on average, scores increase by 51 points. Plus, renters with no credit see an average score of 660 after reporting their rent payments.

Here’s how it works:

You can use RentTrack with any landlord – they don’t have to sign up or even provide receipts for your payments. You simply pop your check into the mail to them. Your money stays in your own personal bank account until your landlord gets and deposits it.

Here’s the clincher:

Each time you pay online, your rent payment is automatically reported to all three credit bureaus as a transaction with good indicators. Voila!

Bad Credit Score = Higher Car Insurance

It’s a formula that won’t make you happy, but is in fact a reality. Car insurance companies use your credit history to figure out the odds that you’ll file a claim.

What do the two have in common? According to recent studies, drivers with low credit scores have a track record of filing up to 40 percent more claims! No wonder they shy away from taking that risk and issuing a policy.

But if and when they do grant a policy, it’s going to come with a hefty price tag attached. Estimates show people with low scored pay anywhere from 20 to 50 percent more on vehicle insurance as compared with those boasting better scores.

Ouch.

Remember, there are many other factors in determining your car insurance rates, for example, your driving history, the type of vehicle, where you live and a long list of other variables that may be beyond your control. As far as your credit history, well, that’s in your capable hands.

This also applies to leasing a vehicle. The minimum most car dealers will accept is a score in the lower 600s, so that’s something to aim for. If you have not yet established credit, dealers will likely want a higher than usual down payment and will charge a higher interest rate. By the same token however, on-time payments will drive your score higher, so this can be a good thing.

Another tip: keep a close eye on your credit report.

Once you’ve established a credit score using these brilliant tips, it’s a good idea to habitually review your report through sites like Credit Karma, Discover Credit Score Card and others. Recent studies have shown that almost 70 percent of all credit reports have some type of errors on them. Fixing them can lead to a quick acceleration of your credit score and could potentially lower your car insurance premiums.

Curious about your credit score? Check it here.

Final Word On Credit Score

One final tip we just can’t NOT share with you: Once you’ve built your credit history and are ready to drive in the fast lane…be very careful with retail store credit cards. These are frequently the card of choice for novices who lack fundamentals of managing credit.

These cards are offered (read: pushed as a hard sell) at every checkout in every store because they benefit the company so hugely. They have high interest rates, and worse, encourage binge shopping that quickly erases that 20% off perk for applying.

They’re enticing and easy to get because they generally have lower credit limits than major credit cards. What does that mean? It means you’re more likely to get the rubber stamp of approval even with scant credit history.

But don’t be lured in! If you must take out a retail store card, make small purchases and pay off before penalties and interest start stacking up. Sure, it would be nice to outfit the entire fam in GAP apparel at the holidays, but hold back and just get Dad a nice scarf. You owe him, after all, for the co-sign.

But we’re not trying to promote credit cards as being a no-no. Used wisely, they can be a good part of your overall balanced monthly budget. Some even hand out hefty perks, such as cash back, air flight miles or even nifty gifts like pop-up lanterns and flannel blankets.

Take advantage of all they have to offer – but make sure to ALWAYS pay off the entire amount on your card each month to avoid interest charges and nullify your chances of late payments.

Remember; credit cards are not the root of all evil. Responsible credit card use will improve your credit score resulting in benefits like cheaper car insurance and lower rates on auto loans. For those who enjoy traveling, some credit cards offer great rewards like airline miles on purchases.

Credit cards are designed for you to misuse them. Credit card companies want you to rack up a CRAZY high balance that you are paying high interest on. By knowing how to play by your rules, not theirs, you can reap the benefits without paying them a penny in interest!

Got any credit score tips or horror stories? Comment below…

Webull vs Acorns: Which Is The Better Investing Platform?

Investing Simple is affiliated with Webull and Acorns. This relationship does not influence our opinions of these platforms.

With so many new investing and trading platforms coming to market, it can be difficult to choose which one is the best for you. Recently, a variety of trading platforms have emerged. In this article, we are going to review two of the top trading platforms available today; Acorns and Webull.

Webull vs Acorns
Webull vs Acorns

What Is Webull?

Webull is a commission free stock and ETF trading platform. Webull is designed for the active trader who is looking for a more dynamic user interface. Webull has a variety of features that benefit traders such as technical indicators, research agency ratings, financial calendars and free margin trading as well as short selling. With easy access to margin, research tools, and live data, Webull has built an ideal platform for active traders. Check out our detailed review of Webull here.

Webull is a platform that is designed for the intermediate trader who already has some experience with the stock market. If you are a complete beginner, you might experience information overload. If you are a somewhat experienced trader, Webull will give you all of the data you will likely need.

Webull review investing simple
Webull Trading App

Webull Free Stock Promotion!

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

Webull Features

Technical Indicators: Webull has a variety of technical indicators available on the platform. You can choose from up to 22 technical indicators such as moving averages, relative strength indexes and more. Here is the full list in our complete Webull review.

Virtual Trading Simulator: Webull has a useful feature called the virtual trading simulator. This feature lets you create a virtual portfolio with fake money to test out strategies before risking real money. This is an ideal feature for someone just starting out, who may need to gain more investing knowledge and know how before investing real money.

Smart Alerts: Webull lets you set a variety of alerts for different holdings. You can be alerted when a price level is hit, or a rate of change has hit a defined level. There are also alerts for volume levels or changes, this can be useful for traders get a sense of where the stock may be headed in the short term.

Financial Calendar: The financial calendar feature keeps you informed on all the latest and upcoming financial news. Important events such as upcoming IPOs, dividend payouts, and earnings releases are all provided to you in a calendar format on the Webull platform.

Margin Trading: Webull allows margin trading on its platform to certain users. You must have a minimum account balance of $2,000 to be approved for margin trading. Below are the margin interest rates charged by Webull…

webull margin investing simple
Webull Margin Rates

After Hours Trading: Webull offers after hours and premarket trading. You can trade securities from 4 am to 8 pm on the Webull platform offering more flexibility in placing trades.

Commission Free Short Selling: There are no trading commissions to short a stock in Webull. Short selling occurs in a margin account, but all trades are completely free.

Who Is Webull For?

Webull is designed for active traders that focus on investment research. Webull provides an array of research tools for both the technical and fundamental investment researchers.

That being said, in most cases this platform is best for those with some prior investment experience. If you are completely new to investing in the stock market, you might be overwhelmed by the number of research tools available to you.

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

What Is Acorns?

Acorns is an online robo advisor that helps you save and invest a portion of your debit and credit card transactions. Acorns will round your purchases to the next dollar and send the difference to your brokerage account to be invested.

The Acorns platform is simple and aims to help more people begin investing their extra cash. Once the cash is in your account it will be automatically invested into your Acorns portfolio. Acorns is designed to help the forgetful investor who does not remember to contribute or the type of person who would like to invest but has a hard time saving.

Click Here To Get Started With Acorns!

Acorns Features

Acorns Spend: This is an Acorns provided debit card. A checking account that has Acorns built in and will save and invest for you. Fees are $3 per month for Acorns spend.

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Acorns Spend

Acorns Later: Acorns offers Individual Retirement Accounts. Both Traditional IRAs and Roth IRAs.

Acorns Earn: Partnerships with brands and other retailers. Acorns partners include Nike, Apple, Airbnb, Blue Apron, Macy’s, DirecTV, Lyft, Walmart and more. When shopping with an Acorns partner, you can earn an extra 5% to 10% of the transaction in cash back. This cash is then sent to your Acorns brokerage account and invested.

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Acorns Earn

Acorns Grow: On Acorns grow you can access a variety of educational content that will help you learn more about investing and personal finance. Acorns grow aims to educate beginner investors and guide them through the learning process.

What Are The Fees?

The basic Acorns platform known as Acorns Core is $1 per month. This $1 fee is waived for college students. If you want to invest in a retirement account through Acorns, this plan will cost you $2 per month. If you are interested in the Acorns Spend checking account, this will cost you $3 per month.

Click Here To Get Started With Acorns!

What Are The Investments?

Once you create your account, Acorns will ask you a series of questions for your investment objective. You can choose from five different options:

  1. Long Term Investment
  2. Short Term Investment
  3. Major Purchase
  4. Children
  5. General

Once you choose your objective, Acorns will suggest a portfolio that aligns with your investment objective. Portfolios on Acorns were designed by Economist Dr. Harry Markowitz and are based on Modern Portfolio Theory. Each portfolio uses a stock and bond allocation that represents its level of risk. Conservative portfolios hold more bonds which tend to be less volatile when compared to stocks. Aggressive portfolios will hold more stocks which may generate higher returns over time, but are more volatile when compared to bonds. Acorns also offers a variety of Vanguard and iShares ETFs on their platform.

Acorns Portfolio Options

PortfolioStocksBondsReal Estate
Conservative18%80%2%
Moderately Conservative36%60%4%
Moderate54%40%6%
Moderately Aggressive72%20%8%
Aggressive90%0%10%

Who Is Acorns For?

Acorns is a suitable platform for beginner investors who would like to begin saving and investing over time. The biggest advantage Acorns has over other platforms is the automation of micro savings into your brokerage account over time. You may not realize it, but these small amounts add up over time. For other investors who schedule automatic deposits into their investment accounts every week or month, this feature may not be as useful. With Acorns, you are limited to just five prebuilt portfolios. You cannot customize your portfolio or pick individual stocks or ETFs.

Click Here To Get Started With Acorns!

Webull VS Acorns

 WebullAcorns
FeesNone, Commission Free$1 to $3 a month
Fractional SharesNoYes
InvestmentsStocks, ETFs5 Prebuilt Portfolios
CustomizationYesNo
Prebuilt PortfoliosNoYes
Account TypesIndividual TaxableIndividual Taxable, Retirement
Account Minimum$0$5
Research PlatformYesNo
Free Trading SimulatorYesNo

The Verdict

Acorns and Webull are both offering completely different services to the potential investor. Webull offers an intermediate to advanced trading platform geared towards the research oriented active trader. Acorns is offering an automated investment solution to those who are forgetful or have a hard time saving money. If you fall into that category, Acorns might be a better fit for you. If you are interested in researching investments and building your own portfolio, Webull is likely a better fit for you.

Is The Webull Free Stock Promotion Legit? (FREE Stock Worth Up To $1000)

Investing Simple is affiliated with Webull. This relationship does not influence our opinion of this platform.

As I am sure your parents have told you, if something seems too good to be true it probably is. But is this the case with the free stock promotion offered by Webull? They are offering new users a free stock just for opening an account with them. You don’t even have to fund the account!

If you aren’t familiar with Webull, here is our full review!

Webull review investing simple
Webull App

Here is what you need to know about the Webull free stock promotion…

During the activity, customers will only get a free stock for opening their first brokerage account with Webull financial LLC. The value of the free stock may be anywhere between $3 and $300. The price of the stock can fluctuate based on market movements. – Webull Activity Rules

So, you will be getting a free stock worth between $3 and $300 a share. As I am sure you can imagine, most people are going to get a stock valued closer to $3 than $300. If you look at the terms and conditions, Webull outlines the odds of receiving a stock of a given value.

The Reward Program Inventory is composed of stocks with a minimum market capitalization of $10 billion and is listed on either the NYSE-listed or NASDAQ-listed markets. The current program inventory is composed of widely held, recognized brand names and consumer & service-related industries. – Webull Terms & Conditions

If you sign up via our link, you will get a free stock worth up to $300! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

At the end of the day, you are getting a completely free stock for opening an account. Odds are that you will end up with a $4 stock, but you could end up getting a more valuable stock.

You might be wondering what Webull gains from this. Webull is looking to acquire more users and gain market share in the brokerage industry. They are trying to compete with some big players like Robinhood. It is common for brokerages to offer an incentive to people who sign up for new accounts in order to gain market share and build a user base.

Webull makes money through a few different avenues. One of these avenues is offering paid subscriptions to market quotations. For example, if you wanted access to TST Level-1 you would pay them $4.99 a month or $53.99 a year. Webull knows that a certain number of users will be interested in this service, so it is cost effective for them to offer a free stock in order to acquire new customers.

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Webull FINRA & SIPC Member

So, if you are interested in giving it a shot and seeing what stock you get, feel free to use our link below. As mentioned above, this is an affiliate link.

Click Here To Open An Account With Webull!

 

Webull vs Stash: Which Is The Better Investing Platform?

Investing Simple is affiliated with Webull. This relationship does not influence our opinion of this platform.

With so many new investing and trading platforms coming to market, it can be difficult to choose which one is the best for you. Recently, a variety of trading platforms have emerged. In this article, we are going to review two of the top trading platforms available today; Stash and Webull.

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Webull vs Stash

What Is Webull?

Webull is a commission free stock and ETF trading platform. Webull is designed for the active trader who is looking for a more dynamic user interface. Webull has a variety of features that benefit traders such as technical indicators, research agency ratings, financial calendars and free margin trading as well as short selling. With easy access to margin, research tools, and live data, Webull has built an ideal platform for active traders. Check out our detailed review of Webull here.

Webull is a platform that is designed for the intermediate trader who already has some experience with the stock market. If you are a complete beginner, you might experience information overload. If you are a somewhat experienced trader, Webull will give you all of the data you will likely need.

Webull review investing simple
Webull Trading App

Webull Free Stock Promotion!

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

Webull Features

Technical Indicators: Webull has a variety of technical indicators available on the platform. You can choose from up to 22 technical indicators such as moving averages, relative strength indexes and more. Here is the full list in our complete Webull review.

Virtual Trading Simulator: Webull has a useful feature called the virtual trading simulator. This feature lets you create a virtual portfolio with fake money to test out strategies before risking real money. This is an ideal feature for someone just starting out, who may need to gain more investing knowledge and know how before investing real money.

Smart Alerts: Webull lets you set a variety of alerts for different holdings. You can be alerted when a price level is hit, or a rate of change has hit a defined level. There are also alerts for volume levels or changes, this can be useful for traders get a sense of where the stock may be headed in the short term.

Financial Calendar: The financial calendar feature keeps you informed on all the latest and upcoming financial news. Important events such as upcoming IPOs, dividend payouts, and earnings releases are all provided to you in a calendar format on the Webull platform.

Margin Trading: Webull allows margin trading on its platform to certain users. You must have a minimum account balance of $2,000 to be approved for margin trading. Below are the margin interest rates charged by Webull…

webull margin investing simple
Webull Margin Rates

After Hours Trading: Webull offers after hours and premarket trading. You can trade securities from 4 am to 8 pm on the Webull platform offering more flexibility in placing trades.

Commission Free Short Selling: There are no trading commissions to short a stock in Webull. Short selling occurs in a margin account, but all trades are completely free.

Who Is Webull For?

Webull is designed for active traders that focus on investment research. Webull provides an array of research tools for both the technical and fundamental investment researchers.

That being said, in most cases this platform is best for those with some prior investment experience. If you are completely new to investing in the stock market, you might be overwhelmed by the number of research tools available to you.

If you sign up via our link, you will get a free stock! You don’t need to fund the account to get the stock, you just have to open it.

Click Here To Open An Account With Webull!

What Is Stash?

Stash is an online trading and investing platform that aims to be simple, easy to use and low cost. You can begin investing in Stash with as little as $5.

Invest with caution, because there is a minimum fee of $1 per month to use Stash. You may want to wait until you have more cash to begin investing.

Stash allows you to invest in a variety of stocks and ETFs on their platform. Stash is not a robo advisor and does not manage your investment account. However, they will provide a platform where you can learn more about investing and view and invest in a variety of prebuilt portfolios.

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Stash Investing App

Once you have your account open, you will be guided through a questionnaire. Stash will ask a variety of questions to analyze your risk tolerance, investment horizon and personal preferences. Once Stash has an idea of what type of investor you are, they will offer you a variety of portfolios customized to your investment objective. You will build your own portfolio and Stash will make suggestions for which funds should make up the foundation of the portfolio.

Most portfolios on Stash are composed of a group of ETFs as well as a limited number of individual stocks. Stash uses clever names and easy to understand themes for their portfolios such as “American Innovators” “Blue Chips” and “Clean & Green”. Similar to M1 Finance, Stash offers the ability to buy fractional shares of stocks or ETFs. Investors with smaller account balances may benefit from increased diversification when utilizing fractional shares, as you will not be limited to stocks and ETFs with small dollar share values.

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Stash Investments

Who Is Stash For?

Stash is a suitable platform for beginner investors, but we believe the fees outweigh the benefits. M1 Finance offers similar prebuilt portfolios to what Stash is offering for free. While the platform is easy to use and get started with, you will likely outgrow it in a short period of time. Stash is designed for mobile users who are looking to invest that have little to no prior investing experience.

Webull VS Stash

 WebullStash
Monthly FeeFree$1/mo* ($2/mo Retirement Accounts)
CommissionFree (Short And Long)Free
Fractional SharesNoYes
Prebuilt PortfoliosNoYes
Account TypesIndividual TaxableIndividual Taxable, Retirement, Custodial
Account Minimum$0$5
InvestmentsStocks, ETFsStocks, ETFs
Research PlatformYesLimited
Free Trading SimulatorYesNo

*To use stash there is a minimum fee of $1 per month for accounts below $5,000, and 0.25% annual fee on accounts greater than $5,000. There is also a $2/month fee for retirement accounts (this fee is waived if you are 25 or younger).

The Verdict

The research tools and number of investments available on Stash are quite limited. You will have more options for research tools and investments with Webull or M1 Finance. On top of that, these platforms are free whereas Stash is charging $1 a month and $2 a month for retirement accounts. In our opinion, there are better options out there than the Stash investment platform.