Huge advances are being made in technology every year, and I can't get enough! For example, I love when I'm having a conversation and can say that at that very moment my Roomba is vacuuming for me.
It just sounds so -- futuristic.
Financial technology can be just as exciting and futuristic — and might even help you clean up in a different way.
Let technology handle your investing
Just as my Roomba does its work in the background while I chat with a friend, an automated investment service can grow your money while you go about your daily routine, including while you sleep.
These companies use technology to make decisions on your behalf based on your personal goals — and you don't need a big pile of money to get started.
Investing in the stock market used to have a massive barrier to entry. You needed tens of thousands of dollars in savings before an investment firm would team you up with a broker, because the firms were most interested in making big commissions.
Today's automated investment managers are more focused on making you money. And they don't require any minimum deposit before they'll go to work for you.
$0 minimum and low fees
One of the biggest names in the automated investing game is Wealthsimple, which will allow you to start with $0 in your account. "No account is too small," says Michael Katchen, Wealthsimple's founder and CEO.
The company charges management fees of just 0.5% on accounts up to $100,000, and only 0.4% on accounts over $100,000. And note that for MoneyWise readers, Wealthsimple will manage up to $10,000 for one year for free.
Fees at traditional mutual funds in the U.S. can amount to more than double what Wealthsimple charges.
"The difference may seem small now, but over time the savings compound," says Dave Nugent, Wealthsimple's chief investment officer. "A percentage or two difference in fees easily adds up to hundreds of thousands of dollars by the time you’re ready to retire."
'Get on with your life'
CEO Katchen says Wealthsimple came about after one of his earlier projects sold and some of his teammates came into money for the first time.
"I've been interested in investing since I was 12 and offered to help them build a simple portfolio, which I did one evening with a spreadsheet," he told Forbes. "Their feedback was, 'This looks like a great plan, but can you just do it for me?'"
They became Wealthsimple's first customers.
"So many of us find investing complicated and overwhelming. That leaves us feeling out of control," Katchen says. "We simplify it so that you can get on with your life."
The technology helps you earn the best possible returns on your money through automatic rebalancing, dividend reinvesting and other methods.
You can set your money and forget it, and never get any phone calls or questions from a financial adviser.
But Wealthsimple and other automated investment services have well-educated and friendly customer service teams available — just in case you do ever want to speak with someone.
"We are making great investment advice accessible to everyone through technology," says Katchen. "We're also simplifying investing by making it human."
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