In case you’ve got a payday loan that charges astronomical fees, you might find yourself overwhelmed by the payments. This is a very difficult kind of debt to pay off since it has a tendency of trapping people into a cycle of loans. Payday loans are taken out by 12 million people every day. Unfortunately, over 80% of these loans get rolled over into a new loan as the borrower fails to pay it back on time. If you’ve been facing problems with your payday loan, or you are curious about it in general, you’ve come to the right place. In this post, we will look at the different ways for payday loan debt relief. One of those ways is payday loan consolidation. It helps you take new loans at a lower interest rate and set up monthly payments that can be paid over time.
Payday Loan Consolidation: All You Need to Know
What are payday loans?
Payday loan is a term used to describe short term loans that are taken out for a small amount (hovering around $500). Unlike most loans, these loans don’t have a payment period that lasts over years. You are supposed to pay your loan back on your payday. These payday loans are often marketed as helpful bridges to help people between paychecks. However, payday loans come with fees that result in extremely high annual percentage rates (APRs). Let’s take an example of a small loan with a $15 per $100 borrowed fee. On the surface, it doesn’t sound all that bad but over the course of time, it results in an APR of almost 400 percent (as per the Consumer Financial Protection Bureau).
Can payday loans help with credit ratings?
No, payday loans generally do the opposite. They do far more damage to your credit than boosting it. These loans are not reported to the credit bureaus so even if you pay everything back on time, your credit ratings won’t have any boost because of it. On the other hand, if you fail to pay it back on time and your lender sends your account to collections, it will actually appear on your credit report, damaging your credit scores in the process.
Based on info released by the Pew Charitable Trust, only 14 percent of payday loan borrowers possess the ability to repay their loans. The excessively high costs make the loan somewhat unmanageable for borrowers. Hence, taking out a new loan with one lower, fixed interest rate might be a better way to get your finances back on track.
How does payday loan consolidation work?
With a debt consolidation loan, you can take a low interest rate loan and use the funds for paying off all your high interest debts. After that, you can pay the debt consolidation loan back over time. The monthly installments for these loans are far more manageable than the amount you will need to shell out for payday loans. That’s because the interest rate on a debt consolidation loan should be much lower, and you pay off the loan over a longer period, usually 12 to 84 months, rather than within two weeks.
How to get a payday loan consolidation?
Start by searching for a lender that offers debt consolidation loans. A few online lenders might run a pre qualification check. You shouldn’t worry about that hurting your credit score, it doesn’t. The lender will also review your credit reports and estimate the interest rate, loan term and monthly payment you may qualify for. Prior to applying for the loan, ensure that you are in a position to afford that every month. Unlike a payday loan, debt consolidation loan payments are reported to the credit bureaus. So, if you pay on time, you will also receive a boost to your credit ratings.
What are the advantages of a payday loan consolidation?
Debt consolidation loans typically offer:
- Lower fees: A few personal loans will charge 1 to 5 percent of the loan amount as an origination fee. However, if you look hard, you might be able to find a loan that doesn’t have any such charge.
- Flexible repayment terms: Personal loans offer long and flexible repayment terms that usually range from 12 to 84 months. Payday loans are generally paid off on every payday, so in a matter of two to four weeks.
- Predictable monthly payments: With a personal loan, you just need to make single monthly payments till your loan is paid off. With a fixed interest rate, this amount stays the same throughout the loan’s payment period.
- Required credit check: While this might seem ominous at first, it’s done to ensure that you can afford the monthly payments before you sign for the loan. The payday loan consolidation vendor will usually verify your income source, check your credit reports or ask about cash reserves. They might be willing to work with you even if you have a low credit score. Payday lenders don’t do any such checks and you might be burdened with loans you can’t pay back.
- No rollovers: When you pay your last installment, you are done with the loan. Your account is closed and the loan is marked as paid off. In case you want some more money, you will need to apply for a new loan and borrow money through that.
What are the disadvantages of a payday loan consolidation?
Payday loan relief probably sounds great, but you should consider these points before applying for a new personal loan:
- You are still susceptible to defaulting on open payments. Even though you might have planned to pay for everything on time, some unexpected development in your life might hurt your finances. Any missed or late payments could damage your credit score, and the loan consolidation lender may send your account to collections. In order to navigate financial emergencies, save at least 3-6 months of living expenses in an emergency fund.
- You may not qualify for a low interest rate. Depending on your creditworthiness, a personal loan’s interest rates may vary from four to 36 percent. While a lot of online lenders might work with people who have low credit scores, they might also charge very high interest rates. They’re still lower, however, than the costs of a payday loan, which can have APRs around 400 percent or higher. If you have a membership of a credit union, you can also get some small, short-term loans with affordable interest rates.
What are some alternatives to payday loan consolidation?
If payday loan consolidation doesn’t seem to be the thing that might work for you, you can try these other options as well:
- Ask for an extension on the repayment period: As per the laws of certain states, payday loan lenders are required to extend your repayment period past your next paycheck. This can prove to be helpful as the payments will be smaller and you’ll have more time to get the money together. Get in touch with your payday lender, enquire about this option and find out about the fee.
- Start a debt management plan: Under a debt management plan, you work with a credit counselor to negotiate with your creditors for better loan terms. Upon agreeing to a monthly payment, you will have to start sending funds to the credit organization each month. After that, the credit organization will pay your lenders. It’s important to work with a reputable credit counseling agency, so don’t jump into a plan without researching thoroughly.
- File Chapter 7 bankruptcy: Chapter 7 bankruptcy is a legal process that allows people to get rid of some or all of their debt. It’s not as easy and simple as just declaring bankruptcy. The process is quite strict and some of your assets might be sold for paying off some debt. Declaring bankruptcy has major consequences so only use this as your last resort. It will do major damage to your credit score and you will find it tricky to qualify for credit after bankruptcy. It’s best to consult a lawyer before going through with this option.
So that was a brief look into the world of payday loan consolidation. Hopefully, you have a better grasp of the concept now and will be able to use it for yourself if the need arises.
Whenever we talk about trading stocks (both buying and selling), there are usually two types of investors: ones who seek to get some gain with the positive price movement of their asset (capital gains) and ones who are more focused on generating passive income through their investment (dividends). In simplest terms, a dividend is a portion of a company’s annual earnings that is distributed among shareholders. Investors who want a passive income from their shareholdings always consider a stock’s dividend yield as its most crucial. A company’s declared dividend is representative of how much the firm will pay its investors on an annual basis. In this post, we will take a look at the best dividend stocks in the ASX for you to invest in. Let’s get started.
The Best Dividend Stocks in the ASX to Invest In 2021
Aurizon Holdings Limited (AZJ.AX)
Kicking off our list of the best dividend stocks in the ASX is Aurizon Holdings Limited. The firm, through its subsidiaries, operates as a rail freight operator in Australia. It operates through Network, Coal, Bulk, and Other segments. The company transports various commodities, including mining, agricultural, industrial, and retail products; and retail goods and groceries across small and big towns, and cities, as well as coal and iron ore. It also operates and manages the Central Queensland Coal Network that consists of 2,670 kilometers of track network; and provides various specialist services, such as rail design, engineering, construction, management, and maintenance, as well as supply chain solutions. In addition, the company transports bulk rail freight services for miners, primary producers, and the manufacturing industry. Further, it is involved in the general freight business. The company was formerly known as QR National Limited and changed its name to Aurizon Holdings Limited in December 2012. Aurizon Holdings Limited was incorporated in 2010 and is headquartered in Fortitude Valley, Australia.
In 2020, the company issued a final dividend of 13.7 cents per share – taking the full-year dividend to 27.4 cents per share.
By comparison, in FY19, Aurizon paid total dividends of 23.8 cents per share.
Dexus is one of Australia’s leading real estate groups, proudly managing a high-quality Australian property portfolio valued at $32.1 billion. Dexus believes that the strength and quality of its relationships will always be central to its success and is deeply committed to working with its customers to provide spaces that engage and inspire. Dexus invests only in Australia, and directly owns $16.5 billion of office and industrial properties. Dexus manages a further $15.6 billion of office, retail, industrial and healthcare properties for third party clients. The group’s $11.4 billion development pipeline provides the opportunity to grow both portfolios and enhance future returns. With 1.6 million square metres of office workspace across 51 properties, Dexus are Australia’s preferred office partner. Dexus is a Top 50 entity by market capitalisation listed on the Australian Securities Exchange (trading code: DXS) and is supported by more than 29,000 investors from 24 countries. With 36 years of expertise in property investment, development and asset management, Dexus has a proven track record in capital and risk management, providing service excellence to tenants and delivering superior risk adjusted returns for investors. It is definitely a great dividend stock in the ASX.
Dexus said that it expected to make a distribution of 28.8 cents per share, covering the first half of FY21.
Fortescue Metals Group (FMG.AX)
Next on our list of the best dividend stocks in the ASX is Fortescue Metals Group Limited. It engages in the exploration, development, production, processing, and sale of iron ore in Australia, China, and internationally. It also explores for copper and gold deposits. The company owns and operates the Chichester Hub that includes the Cloudbreak and Christmas Creek mines located in the Chichester ranges; and the Solomon Hub comprising the Firetail and Kings Valley mines located in the Hamersley ranges of Pilbara, Western Australia. It is also developing the Eliwana mine situated in the Pilbara region of Western Australia. In addition, the company holds a portfolio of properties situated in Ecuador and Argentina. Further, it provides port towage services. Fortescue Metals Group Limited was founded in 2003 and is headquartered in East Perth, Australia.
In 2020, FMG paid out dividends totalling AUD$1.76 per share.
Stockland (ASX:SGP) was founded in 1952 and has grown to become one of Australia’s largest diversified property groups owning, developing and managing a large portfolio of shopping centres, residential communities, workplace and logistic assets and retirement living villages. Stockland is consistently rated as one of the most sustainable real estate companies in the world by the Dow Jones Sustainability World Index (DJSI). One of the best dividend stocks in the ASX, Stockland is also an Employer of Choice for Gender Equality, as recognised by the Workplace Gender Equality Agency.
In 2020 Stockland’s full-year 2020 distribution came out to 24.1 cents per unit.
AGL Energy (AGL.AX)
Next on our list of the best dividend stocks in the ASX is AGL Energy Limited. It provides energy and other services to residential, small and large business, and wholesale customers in Australia. It operates in four segments: Wholesale Markets, Customer Markets, Group Operations, and Investments. The company engages in generating electricity through thermal, hydro, wind, and solar power generation plants; gas storage activities; and the retail sale of electricity, gas, solar, and energy products and services. The company operates an electricity generation portfolio of 11,208 megawatts; the Newcastle gas storage facility in New South Wales; the Silver Springs underground gas storage facility in Queensland; natural gas production assets at Camden in New South Wales; and the North Queensland gas assets. It serves 3.8 million customer accounts. AGL Energy Limited was founded in 1837 and is based in Sydney, Australia.
AGL paid a final dividend of 51 cents per share in September 2020, taking the company’s full-year dividends to 98 cents per share. By comparison, in 2019 AGL paid out total dividends of 119 cents per share.
Telstra Corporation Limited (TLS.AX)
Telstra Corporation Limited provides telecommunications and information services to businesses, governments, and individuals in Australia and internationally. The popular Australian brand is one of the best dividend stocks to buy. It operates in four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT, and Telstra InfraCo. The company offers telecommunication products, services, and solutions across mobiles, fixed and mobile broadband, telephony and Pay TV/IPTV, and digital content; and online self-service capabilities, as well as operates inbound and outbound call centers, owned and licensed Telstra shops, and the Telstra dealership network. It also provides sales and contract management; and product management services for data and Internet protocol networks, mobility services, and network applications and services products, such as managed network, unified communications, cloud, industry solutions, and integrated services and monitoring. In addition, the company engages in the development of industry vertical solutions; planning, design, engineering architecture, and construction of Telstra networks, technology, and information technology solutions; and delivering network technologies. The company was formerly known as Australian and Overseas Telecommunications Corporation Limited and changed its name to Telstra Corporation Limited in April 1993. Telstra Corporation Limited was founded in 1901 and is based in Melbourne, Australia.
In 2020 Telstra paid 16 cent per share in total dividends, made up of special and ordinary dividends, leaving the blue-chip telco with a solid 5.28% payout ratio.
Woodside Petroleum (WPL.AX)
Next on our list of the best dividend stocks in the ASX is Woodside Petroleum Ltd. It engages in the exploration, evaluation, development, production, marketing, and sale of hydrocarbons in Oceania, Asia, Canada, Africa, and internationally. The company produces liquefied natural gas, pipeline natural gas, condensate, liquefied petroleum gas, and crude oil. It holds interests in the Greater Browse, Greater Sunrise, Greater Pluto, Greater Exmouth, North West Shelf, Wheatstone, Canada, Senegal, Greater Scarborough, and Myanmar projects. Woodside Petroleum Ltd was founded in 1954 and is headquartered in Perth, Australia.
Despite that, Woodside declared an interim dividend of 26 US cents per share, down from 2019’s interim dividend, but still leaving the oil major’s dividend yield hovering above 5%.
APA Group (APA.AX)
APA Group develops, owns, and operates natural gas transportation and energy infrastructure in Australia. The company operates through three segments: Energy Infrastructure, Asset Management, and Energy Investments. It operates natural gas pipelines, gas storage facilities, gas processing facilities, gas compression facilities, electricity transmission, electricity interconnectors, and renewable and gas fired power generation assets; and operates solar farms and wind farms. As far as dividend stocks in the ASX are concerned, this is one of the best ones. The company has interests in approximately 15,000 kilometers of gas transmission pipelines; approximately 29,500 kilometers of gas mains and pipelines; and 1.4 million gas consumer connections. It also provides commercial, operating, and asset maintenance services to its energy investments and third parties; and invests in unlisted entities. APA Group was founded in 2000 and is headquartered in Sydney, Australia.
The company has an annual yield of slightly over 5%.
Origin Energy (ORG.AX)
Origin Energy Limited, an integrated energy company, engages in the exploration and production of natural gas, electricity generation, wholesale and retail sale of electricity and gas, and sale of liquefied natural gas in Australia and internationally. The company operates in Energy Markets and Integrated Gas segments. Its exploration and production portfolio includes the Bowen and Surat basins in Queensland; the Browse basin in Western Australia; and the Beetaloo basin in the Northern Territory. If dividend stocks are what you are looking for in the ASX, Origin Energy is a great choice. The company also generates electricity from coal, wind, pumped water storage, solar, and cogeneration plants; sells electricity, natural gas, and LPG; provides GreenPower and green gas products; and supplies LPG to homes and businesses. In addition, it offers electric and gas hot water systems, as well as hot water systems repair and replacement services; split system air conditioners; ducted and space heating solutions; ducted evaporative cooling systems; and ducted reverse cycle air conditioning systems. Origin Energy Limited was founded in 1946 and is based in Barangaroo, Australia.
The company paid a ‘stable’ dividend in 2020 (25 cents per share), implying an impressive dividend yield of 5.10%.
Rio Tinto Group (RIO)
Rounding up our list of the best dividend stocks in the ASX is the Rio Tinto Group. It engages in finding, mining, and processing mineral resources worldwide. The company offers aluminum, silver, molybdenum, copper, diamonds, gold, borates, titanium dioxide, salt, iron ore, and uranium. It is also involved in the alumina production; primary aluminum smelting; bauxite mining; alumina refining; and ilmenite, rutile, and zircon mining, as well as provision of gypsum. Rio Tinto Group was founded in 1873 and is headquartered in London, the United Kingdom. Rio has a dividend yield of 4.81%.
Because of the COVID-19 pandemic, 2020 was a very volatile year for most Australian stocks. A lot of strong dividend yielders such as the Big Four Banks either slashed their dividends or suspended them altogether. This step was in response to updated regulatory guidance and other negative events. However, some of the best dividend yielding stocks of the ASX such as FMG continued performing well and increased their dividend yields because of good macroeconomic conditions. 2021 is expected to be a year of recovery, but surprises might still spring up. However, the stocks that we discussed earlier in the post will be great for investors who are looking to get their hands on some of the high yielding dividend stocks of the ASX.
Making wise investment choices is the key to wealth creation and ensuring that your future also continues to be prosperous. Just burning your paycheck up every month isn’t the right way to go. However, living under extreme austerity in order to just save money is also not the correct thing to do. In this post, we will look at the best ways for you to invest your money. Let’s get started.
Best Ways to Invest Money in 2021
Risk vs Return
Before we start going through the different ways for people to invest money, let’s get a clearer understanding of the concept of risk vs return. In investment terms, risk is the probability of losing money whenever you make any investment. Return is the amount of money you earn by investing money in an investment tool. Based on risk and returns, investments can be broadly split into three kinds:
- High Risk High Returns
- Low Risk Low Return
- Medium Risk Medium Return.
If you take high risk your returns will be high. If you take low risk your returns will be low. and if you take medium risk your risk will be medium.
Due to this concept, some people develop a fear of losing money and shy away from investment. However, you shouldn’t do that. With the right research and guidance, you can invest your money with ease and earn good money, Now let’s take a look at some of the best ways to invest money:
It is a safe option. Many people prefer this option. But it is a low risk and low returns investment.
Every bank has some scheme regarding FD as they are also doing business. When you invest in a fixed deposit, you become an investor for that bank for your FD’s tenure. The bank will keep the money for that fixed tenure and reinvest it. At the end of your tenure, you will get some returns. This is how an FD works. The returns from FD are higher than your savings account. And longer the tenure longer the return.
This is another nice way to invest money. The value of gold goes up with time. Gold prices can change drastically, both positively and negatively. Here are the advantages of investing in gold:
- It is a medium risk medium return investment.
- It is a safe and simple investment as there is not much paperwork involved.
Here are the disadvantages:
- Hard to check for authenticity. It’s not easy for everyone to know if you’ve got actual gold or counterfeit material.
- Storage is difficult. Once you purchase actual gold, you must also arrange for its safekeeping, which can be a bit tricky.
This is a high risk high return investment. It is also a long term investment. If you buy a piece of real estate for $100,000, don’t expect it to be worth $1 million within a year. There are various factors involved such as legal factors. The seller can sell you an illegal property. If that happens to be the case, you’d have wasted your $100,000. Making it quite risky.
It is a low risk investment with low to medium returns. It’s quite safe as a way of investing money. When you purchase Government bonds you become an investor for the government and that money can be used to fund infrastructure projects in the country. By purchasing Government bonds, you essentially give your money to the government so that it can use it to finance the country’s infrastructure and reward you with fixed returns in the end.
Investing in the stock market is of the high risk high returns kind. When you buy a stock of a certain company, you essentially give that company some money to use. With that money, these companies will fund their operation and reward investors with some part of the company’s profits. After you invest in the share and the price of the share increases, it means that the company is performing well and your investment is also performing well consequently. There is a downside to investing in stock markets as well. You can lose your money as easily as you make it. There is a somewhat steep learning curve if you want to invest in the stock market and start earning good returns right away. You need to stay abreast with current affairs, and have a good understanding of a stock market’s machinations. There are so many factors which you need to learn well. That also adds to the high risk high reward nature of stock market investments.
Mutual funds are often described as professionally managed investment schemes that collect money from various investors then invest it in diversified holdings. Mutual funds invest within a wide selection of securities like stocks, bonds, debt instruments and far more. Each scheme features a defined NAV (Net Asset Value) which springs after dividing the entire investment of the mutual fund by the amount of investors. Mutual funds can fall into various categories, ranging from low risk low return to high risk high return. Investors earn returns from mutual funds in three ways. They are dividends, capital gains, sale of fund shares.
So those were some of the best ways for you to invest money in 2021. You should abstain from investing all your money in just one place and spread it across different tools. That is the only smart and savvy way to invest your money without the risk of losing it all in a snap. Invest smartly, safely and responsibly.
Doubling your money must be every person’s dream. After all, who doesn’t wish for that. A lot of people might wish for that when a genie asks them for their wish. Don’t worry though, while it might be tough to do, it’s not just something which happens solely in fantasies. There are ways to do it in real life as well. The world is filled with gimmicky schemes and fake programs that promise to double your money in an instant. Don’t worry, in this post, we won’t be talking about any such thing. We’ll only talk about the legitimate methods with which you can double your money. And don’t worry, none of these involve unnecessary risks, stumbling upon your personal oilfield or winning a mega lottery. Let’s get started.
Here are some steps that can help you double your money
Reduce your expenses
Whenever you don’t spend all of your income, the leftover amount counts as your savings. You should always create an emergency fund that contains at least three months of living expenses, Once you have built that up, you should try and invest your savings.
Your savings can be invested in tax-advantaged retirement accounts like a 401(k) or IRA. You also have the option to invest your money in taxable brokerage accounts.
Invest in Stocks
The Standard and Poor 500 (S&P 500) has averaged a 10 percent annualized return between 1990 and 2017. What that means is that even though stocks might fluctuate in any given year, if you continued investing over 27 years, your investments would’ve grown by 10 percent every year.
And let’s not act like the time period between 1990 and 2017 has been smooth sailing
What is the Rule of 72 when it comes to doubling your money?
The Rule of 72 is a shortcut that helps you figure out how long your investments take to double. In order to do that, you must divide 72 by your expected annual return rate. Let’s take the example of the S&P 500’s return. So if your annual rate of return is 10%, you can expect your investment to double in seven years.
By spending less than you earn, investing in an index fund that tracks the S&P 500, and reinvesting your gains, you could’ve doubled your money in time of seven years. And if you keep reinvesting your gains, you could’ve doubled that over the next seven years as well. Keep in mind that this is considering that the stock market continues to perform as it did between 1990 and 2017.
Invest in Bonds
Your portfolio should be a mix of stocks and bonds. It should be diversified according to your age, goals, and risk tolerance. If you don’t fit the profile of somebody who should be heavily invested in equities, such as S&P 500 index funds, try and invest more money in bonds in order to double it.
Let’s say your bonds average a return of 5% per year, according to the rule of 72, you will be able to double your money in 14 years. While this is significantly longer than the time it might take through investing in stocks, you must remember that bonds are much more secure than stocks and you don’t really have any risk of losing your money when you invest in bonds. You should always keep your risk appetite in mind while choosing your investment tool. Just because stocks double your money faster than bonds, doesn’t mean you should close your eyes and put all your money in bonds. Investing in stocks is a lot riskier than investing in bonds and you can lose all your savings in the stock market at the snap of a finger. So invest carefully and responsibly.
If your employer matches your 401(k) contributions, you have the easiest, most risk-free method of doubling your money at your disposal. For every dollar you put in up to your employer match, you will receive an automatic increase.
Let’s take this example, if your employer matches 50 cents for every dollar that you put in up to 5 percent of your pay. You are getting a guaranteed 50 percent “return” on your contribution. This is one of the few guaranteed returns in the investment world.
Even if your employer doesn’t match your 401(k), you shouldn’t worry. Retirement contributions can provide you some good amount of tax exemption. The government will still subsidize a portion by giving you either a tax-deferral up front or a tax-exemption down the road. The exact form will depend on your choice of account (Roth or Traditional).
Create Cash Flow
Instead of just accumulating your savings and waiting on compound interest to build up, try to create some cash flow for yourself. Don’t lock up all of your savings into an IRA and relinquish all control, in the hopes that things will pan out in the future. Yes, planning for the future is good, but you should also try to enjoy the present. Create some kind of cash flow to cover your basic living expenses instead of just going on a maniacal cost cutting spree and living like an ascetic. Create a realistic living expenses budget and don’t just go on extreme cost cutting measures that result in you eating just one meal per day (we are exaggerating here but you get the point). The real key to doubling your money is your level of responsibility. You must be responsible with your money, investments, and allocations. Invest in things you understand. Don’t just invest in something that worked for somebody else. Understand everything in great detail before you choose to invest any money anywhere. Doubling your money is possible, but you need to be responsible and patient in order for that to happen.
The market around gun stocks has been quite ignored for a long period of time. However, as the world becomes more and more chaotic people have gravitated toward firearms, mainly driven by a need for self defense. This has led to an unprecedented surge in gun sales all across America. According to a database released by the Federal Bureau of Investigation (FBI), over three million firearm background checks were submitted in May 2020 alone. This generally corresponds to the total number of guns sold in the month. On top of that, there are guns sold by private gun sellers that don’t require any kind of background checks. During the first five months of 2020, over 15.2 million guns were sold in America. In order to get an idea of how large this number is, remember that only 14 million guns were sold in all of 2009. It’s pretty obvious that gun stocks are going to be a great place to invest money in. Even if you don’t want to own guns yourself, investing in some of the top publicly traded gun companies of America might be the right investment decision for you. In this post, we will look at stocks for you to invest in. Let’s get started.
Here are the Best Publicly Traded Gun Companies:
Smith & Wesson Brands (NASDAQ: SWBI)
Kicking off our list of the best publicly traded gun companies is Smith & Wesson Brands, Inc. It designs, manufactures, and sells firearms worldwide. The company offers firearms products, such as revolvers and pistols; modern sporting rifles, bolt action rifles, and muzzleloaders; handcuffs; suppressors; and other firearm-related products under the Smith & Wesson, M&P, Performance Center, Thompson/Center Arms, and Gemtech brands. It also provides manufacturing services, which include forging, heat treating, rapid prototyping, tooling, finishing, plating, machining, and custom plastic injection molding to other businesses under the Smith & Wesson and Smith & Wesson Precision Components brands; and sells parts purchased through third parties. The company sells its products to gun enthusiasts, collectors, sportsmen, competitive shooters, hunters, individuals desiring home and personal protection, law enforcement, security agencies, officers, and military agencies. Smith & Wesson Brands, Inc. markets its products through independent dealers, retailers, in-store retails, and direct to consumers; print, broadcast, and digital advertising campaigns; social and electronic media; and in-store retail merchandising strategies. The company was formerly known as American Outdoor Brands Corporation and changed its name to Smith & Wesson Brands, Inc. in June 2020. Smith & Wesson Brands, Inc. was founded in 1852 and is based in Springfield, Massachusetts.
Sturm Ruger (NYSE: RGR)
Sturm, Ruger & Company, Inc., together with its subsidiaries, designs, manufactures, and sells firearms under the Ruger name and trademark in the United States. It operates in two segments, Firearms and Castings. If you are looking for a great publicly traded gun company to invest in, this is right up there among the best. The company provides single-shot, autoloading, bolt-action, and sporting rifles; rimfire and centerfire autoloading pistols; single-action and double-action revolvers; and firearms accessories and replacement parts. The company also manufactures and sells steel investment castings and metal injection molding (MIM) parts. It sells its firearm products through independent wholesale distributors principally to the commercial sporting market; and castings and MIM parts directly or through manufacturers’ representatives. The company also exports its firearm products through a network of commercial distributors and directly to foreign customers consisting primarily of law enforcement agencies and foreign governments. Sturm, Ruger & Company, Inc. was founded in 1949 and is based in Southport, Connecticut.
Vista Outdoor (NYSE: VSTO)
Next on the list of the best publicly traded gun companies to invest in, is Vista Outdoor Inc. It designs, manufactures, and markets various consumer products in the outdoor sports and recreation markets in the United States and internationally. It has a portfolio of brands that provides consumers with a range of products for individual outdoor recreational pursuits. The company operates through two segments, Shooting Sports and Outdoor Products. The Shooting Sports segment offers ammunition products, including centerfire ammunition, rimfire ammunition, shotshell ammunition, and reloading components; hunting accessories comprising high-performance hunting arrows, game calls, hunting blinds, game cameras, decoys, and optics products; and shooting accessories, such as reloading equipment, clay targets, and premium gun care products, as well as holsters, duty gear, bags, and packs. The Outdoor Products segment offers sports protection products that include helmets, goggles, and accessories for cycling, snow sports, action sports, and powersports; outdoor cooking products, such as grills and stoves; golf products, which comprise laser rangefinders and other golf technology products; and hydration products, including hydration packs and water bottles. The company sells its products to outdoor enthusiasts, hunters, recreational shooters, athletes, law enforcement, and military professionals through various mass, specialty, and independent retailers and distributors, as well as directly to consumers through the brand’s website and third party e-tail websites. Vista Outdoor Inc. was incorporated in 2014 and is headquartered in Anoka, Minnesota.
Olin Corporation (NYSE: OLN)
Olin Corporation manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Winchester segment offers sporting ammunition products, including shotshells, small caliber centerfire, and rimfire ammunition products for hunters and recreational shooters, and law enforcement agencies; small caliber military ammunition products for use in infantry and mounted weapons; and industrial products comprising gauge loads and powder-actuated tool loads for maintenance applications in power and concrete industries, and construction industry. This fantastic publicly traded gun company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, other distributors, and the U.S. Government and its prime contractors. The company was founded in 1892 and is based in Clayton, Missouri.
Sportsman’s Warehouse (NASDAQ: SPWH)
Sportsman’s Warehouse Holdings, Inc., together with its subsidiaries, operates as an outdoor sporting goods retailer in the United States. In addition to general camping and outdoor goods, it also offers hunting and shooting products, such as ammunition, archery items, ATV accessories, blinds and tree stands, decoys, firearms, firearms safety and storage products, reloading equipment, and shooting gear products; and optics, electronics, and accessories, including gift items, GPS devices, knives, lighting, optics, and two-way radios. Further, the company’s stores provide archery technician services, fishing-reel line winding, gun bore sighting and scope mounting, and cleaning services, as well as issues hunting and fishing licenses. As of February 01, 2020, the company operated through 103 stores in 27 states. Sportsman’s Warehouse Holdings, Inc. was founded in 1986 and is headquartered in West Jordan, Utah. This is definitely one of the best publicly traded gun companies for you to invest in.
Axon Enterprise (NASDAQ: AXON)
Axon Enterprise, Inc. develops, manufactures, and sells conducted energy weapons (CEWs) worldwide. The company operates through two segments, TASER and Software and Sensors. It offers TASER X26P, TASER X2, TASER 7, and TASER Pulse and Bolt CEWs; and related cartridges. For people looking to put some money on some good publicly traded gun firm, Axon is a great choice. The company also provides on-officer body cameras and Axon Fleet in-car video systems; and Axon Evidence connected software network; Axon Records cloud-based records management system; Axon Signal enabled devices; and computer-aided dispatch software, as well as Axon docks, cartridges, and batteries. Axon Enterprise, Inc. sells its products through its direct sales force, distribution partners, online store, and third-party resellers. The company was formerly known as TASER International, Inc. and changed its name to Axon Enterprise, Inc. in April 2017. Axon Enterprise, Inc. was founded in 1993 and is headquartered in Scottsdale, Arizona.
Big 5 Sporting Goods (NASDAQ: BGFV)
Rounding up our list of the best publicly traded gun companies for you to invest in, is the extremely popular Big 5 Sporting Goods Corporation. It operates as a sporting goods retailer in the western United States. The company’s products include athletic shoes, apparel, and accessories, as well as a selection of outdoor and athletic equipment for team sports, fitness, camping, hunting, fishing, tennis, golf, winter and summer recreation, and roller sports. It also provides private label items, such as shoes, apparel, camping equipment, fishing supplies, and snow sport equipment. The company sells private label merchandise under its own trademarks comprising Golden Bear, Harsh, Pacifica, and Rugged Exposure. As of May 27, 2020, it operated 431 stores. The company also operates an e-commerce platform under the Big 5 Sporting Goods name. Big 5 Sporting Goods Corporation was founded in 1955 and is headquartered in El Segundo, California.
So those were seven of the best publicly traded gun companies for you to invest your hard earned money in. Remember to only use a gun for self defense or hunting purposes. If you can live your life without firing your gun at another human being, you would have done a great job defending yourself.
Company analysis is the process that evaluates securities by collecting all the information related to the company’s profile, products and services along with the profitability. Company analysis is also popularly referred to as “fundamental analysis”. A company analysis utilizes basic information about the company, such as the mission statement and apparition along with the company’s values and goals. While company analysis is underway, investors also consider the company’s history. They especially focus on events that have played a critical role in shaping the company. A company analysis also observes the company’s goods and services on offer. In case the firm carries out manufacturing activities, company analysis also conducts a study on the company’s products while analyzing the quality of the products as well as their demand in the market. In case the company is a service provider, the investor carefully analyses the services offered by the firm. Let’s find out more about company analysis.
Company Analysis: What is it and why is it important?
What is Company Analysis?
A company analysis is an extremely useful technique that objectively evaluates the performance of a given company. The accurate picture provided by company analysis helps:
- Sales and marketing teams with improving their pitch and finding the right people in the organization for it.
- Investors make informed investment decisions
- Business leaders find out opportunities for improvement and find out where they stand in relation to their competition.
At its core, company analysis does the job of providing insight into a firm’s activities, competitions, goals and performance. Based on the expected outcome, it might contain extra information that helps answer the questions of the intended audience.
What are the different parameters of Company Analysis?
The main objective of company analysis is to find out what the company does. These days, a company’s website usually carries that information. However, clever marketing language can make this information slightly clear as the firm’s marketers try their best to distinguish their firm from their peers. So to get this part right, you need to identify the customer needs the company fulfills and the category the firm works in by taking a closer look at their products/services and marketing materials.
This part does the job of supplying the context of the firm’s operation. While the depth of this analysis can vary depending on the expected goals, it generally involves a detailed study of the industry’s maturity, competition, trends, growth drivers and challenges. In case deeper insights are desired, the following types of analysis can be conducted. These reveal where the company fits in the bigger picture.
Competitive forces analysis
This type of analysis evaluates threats from new market entrants, substitutes, and the bargaining power held by buyers and suppliers
This factors in the political, economic, social, and technological aspects impacting an industry
This analyses the strengths, weaknesses, opportunities, and threats in an industry
Every company has a specific set of business goals it aims to achieve. Gaining an understanding of its route and the gaps along the path is critical. It doesn’t matter if they are partnerships, mergers and acquisitions, new market entry or product/service-line expansion, it’s imperative to consider them in order to help improve decision making.
Timely information about such advancements can be extracted from press releases, company announcements, articles featured in the media, and thought-leadership content.
Technology enables businesses to work more effectively and drives differentiation. It’s a critical yardstick of how well the firm can tackle future challenges and opportunities that the industry presents. So we can clearly see that evaluation of a firm’s technology is a key factor of company analysis.
Analyzing a company’s technological capabilities involves collating information about the company’s existing technical abilities, the ones in development and how they stack up relative to its peer group. This insight can be obtained by looking into the company’s investments, M&A, patents, hiring, and earnings.
Organizational charts uncover how responsibilities are distributed across an organization. When They are used for the purpose of investment, they reveal whether the firm’s structure is geared towards making it a success. Sales and marketing teams utilize organizational charts in order to identify and cultivate their relationships with different decision-makers.
Organizational charts also offer a very holistic view of all the management profiles, detailing the overall professional experience inside the firm and outside it. They also include educational qualifications, and achievements. This helps investors evaluate every single decision maker of the firm and offers them insight into the firm’s credibility and position in the industry.
In order to acquire relevant data for the creation of effective organizational charts, company analysts should peruse company websites, LinkedIn pages, press releases, company announcements, and paid and public business directories.
No company’s analysis can ever be complete without analysing and studying the competitors. As far as investors are concerned, looking at the major competitors in each line of the company’s business helps them determine how big the market base for the product is. It allows investors to make a balanced decision depending on the company’s performance on key metrics.
As far as sales and marketing teams are concerned, it’s always critical to find out what works well for the competitors. It helps them discover and work towards filling the gaps for their prospects, enabling effective customer acquisition and retention strategies. A holistic company analysis goes a long way in helping end users acquire great insights into the business.
Company analysis: Frequently Asked Questions (FAQs)
What’s the difference between company analysis and business analysis?
Company analysis gives the performance of a particular company. It covers all the facets of business in which the company is engaged and its performance across all the segments it’s engaged in. Business analysis on the other hand, examines a particular business in which the company is engaged and compares its performance with other companies engaged in a similar kind of business.
What is Company Analysis?
Company analysis is the process that helps investors evaluate securities, a company’s profile, profitability and its products and services to find out if the company is worth their investment.
What are the factors of company analysis?
The factors that have an impact on company analysis can be divided into two segments, quantitative factors and qualitative factors. Qualitative factors are business models, competitive advantage, Management and corporate governance. Quantitative factors deal with company growth and industry growth along with its peers.
Company analysis: Conclusion
Company Analysis is the process of evaluating a company’s profitability, profile, product and services. In order to get an accurate idea of the firm that the investor wants to invest in, company analysis is very important. While conducting company analysis, ratios should always be covered in a comparative manner, especially when compared to previous performances or other players in the industry. Understanding the level of the company’s management is also very critical. Investors must know if these people were involved in any kind of fraudulent activities in the past. Cash Flow Statements provide a thorough picture of the Cash balance which arises from the company’s operating, investing and financing activities. While conducting company analysis, it’s important to be mindful of both qualitative and quantitative factors. That’s the only way to gain a deep and insightful understanding of the firm.
Peer-to-peer lending (P2P) is a type of debt financing that has risen in popularity over the years. P2P platforms utilize technology and big data that allows people to borrow and lend money from another, without using a traditional financial institution such as a bank. When it comes to P2P lending platforms today, Lending Club is one of the premier names. With the financial market being in a constant state of flux, you might wonder, is Lending Club a good investment for 2021. Keep in mind, we are not talking about buying Lending Club stock, we are talking about lending on the platform itself, especially in the existing low rate environment. There is a search for yield in 2020 as the 10-year bond yield is less than 7%. If you were wondering about Lending Club and its pros and cons, you have come to the right place. We are going to cover all of that and more. Let’s get started.
Lending Club: All You Need to Know
What is Lending Club?
Lending Club is a publicly traded company (NYSE: LC) that is heavily regulated by the Securities & Exchange Commission. The platform provides different types of investment and retirement accounts to qualified investors for as little as $1,000. Historically, Lending Club has averaged returns of 3-85 per year with over 99% of the portfolios (at least 100 notes) witnessing positive returns.
When was Lending Club established?
Lending Club was established in San Francisco in 2007. The firm has facilitated a staggering $35 billion in loans so far. Like any other company, Lending Club has also witnessed ups and downs in its fortunes but has managed to make it through the global financial crisis as well. Over the years, it has built a large gap between its nearest rival Prosper, which is still struggling after a failed attempt to go public in 2005.
How does Lending Club’s P2P process work?
The company screens potential borrowers and services the loans, assigning a grade to every approved borrower using credit and income data. The final decision to lend money lies in the hands of the investors.
In other words, the loan grade determines what range of interest rates borrowers qualify for and helps investors decide whether or not to fund each loan. Only investors have access to the borrowers’ grades.
What is the minimum FICO score for Lending Club?
Borrowers who want to be approved for a Lending Club loan must have a minimum FICO score of 660. Lending Club rejects more than 66% of its loan applications so if you are a potential investor, you can feel safer knowing that your money won’t end up as a non performing asset in the future.
Upon approval, the borrower is graded. This process helps determine the interest rates. Keep in mind, approval doesn’t mean that the borrower is default free. Borrowers with lower grades have a higher risk of default and can default, which is why a higher rate of return is required.
Loans for individual borrowers range from $1,000 up to a maximum of $40,000. Rates are competitive when compared to traditional banks and start as low as 5.31% APR. Each borrower’s interest rate is set for the entire duration of the loan, this can vary between three to five years. The loans are unsecured lines of credit (similar to credit card loans). Similar to credit cards, defaults are reported to the credit rating agencies like Equifax, TransUnion and Experian.
The platform offers individual loans, small business loans, auto refinances, medical expense loans and more. Investors have the option to lend to the borrowers with notes starting with a $25 per note minimum.
Lending Club: Pros and Cons
To arrive at any kind of conclusion about Lending Club, it’s very important to analyse its pros and cons thoroughly. Here they are:
Lending Club: Pros
- Diversification: The age old adage of investing is to not have all of your money pooled into one kind of investment tool. Lending Club is a good way to diversify your investments.
- Wide selection: With Lending Club, you can easily filter and choose investments on the basis of categories such as loan type, credit score, purpose of loan, etc.
- Automated Investing: If you don’t have the time or know-how, let Lending Club do the investing for you based on your own parameters.
Lending Club: Cons
- Lack of liquidity: If you want to take your money out, you have to wait until each loan comes due.
- Taxed At Ordinary Income: This can be a major problem for investors who have a high income.
- 1% Annual Fee: Lending Club charges 1% annually per note you own within the marketplace.
- Unsecured Debt: Unlike an auto or home loan, this debt is unsecured. Lending Club doesn’t have the option to collect its loan against the borrower’s assets in case of a default.
What are the risks associated with Lending Club?
The most glaring risk associated with Lending Club is the fact that the loans are not FDIC guaranteed. It puts it on the same boat as stock investments and real estate investments. The only investments that are guaranteed are CDs or money market accounts up to $250,000 per account holder.
Here are the main risks to investing in P2P lending.
- Inflation Risk: Just like any other kind of investment, inflation is a big problem with Lending Club as well as it can eat into your returns.
- Fee Risk: Current management fee is 1%, but it could go up or down.
- Marketplace Risk: In case Lending Club suffers from bankruptcy, taking your loans back will take time. However, Lending Club is a publicly traded company with a positive operating profit, so a chance of bankruptcy is quite low.
- Callable Risk: Loans can be paid off early, which isn’t really great if you have a performing loan. It does help with liquidity though.
- Liquidity Risk: Unless the loan is paid back in full, your money is locked up. However, you can sell your loan on the secondary market, albeit at a discount.
- Economic Risk: Another financial crisis can lead to a sharp increase in defaults.
How to invest in Lending Club?
Potential investors should focus on higher quality borrowers in the A and B grade. While the interest payments might be low, the likelihood of the loan being repaid is a lot higher.
Focus on high quality borrowers who are looking to refinance their credit card debt. Credit card debt often runs in the 15% – 30% range, which is why to such borrowers, paying 6% – 10% is a good deal. If possible, look for borrowers with a FICO score of at least 680, a debt-to-income ratio of at least 30%, no delinquency history, and positive reviews.
It’s important to diversify your loans into at LEAST 10 investments if you start out with a small investment. As per Lending Club, if you had a 100 investment portfolio, you would have still made money during the financial crisis vs. -50% in the S&P 500.
What are the tax implications of Lending Club investments?
Just like any form of investment, all of your returns are taxed at your federal and state marginal income tax level. Even if you hold the notes for more than a year, will not avail the benefits of the long term capital gains tax rate. You can try your hand at Lending Club’s self-directed IRA to defer on taxes until exit.
What are Lending Club’s investing requirements?
Lending Club is available to investors across all American states except Alaska, New Mexico, North Carolina, Ohio and Pennsylvania. In most states, you will need to have a gross annual income/net worth of at least $70,000 to be able to use Lending Club. In California, this number rises to $85,000. Truth be told, nobody really checks these things. However, in case you are a California resident and your net worth is more $200,000 ($250,000 everywhere else), the annual income requirement is waived off. In case you are from Kentucky, you must qualify as an “accredited investor” under the Securities Act of 1933. In order to get started, you need a minimum of $1,000.
How to open a Lending Club account?
These are the types of accounts you can open with Lending Club:
- Traditional IRA
- Roth IRA
- Simple IRA
- Rollover IRA
You should start with an investment of at least $5,000 so that you can get as close to 100 investment loans as possible. The most efficient way to open a Lending Club account is via an IRA because of tax deferment. All income generated through Lending CLub is taxed as ordinary income.
Lending Club: Conclusion
Investing in peer-to-peer lending is a good way to add some diversification to your investment portfolio. P2P lending is a good kind of passive income investment.
Since P2P is an alternative kind of investment, try to ensure that your exposure to Lending CLub is no more than 20% of your overall portfolio. Remember, it’s quite tough to get a good yield these days. Even if Lending Club only provides you just a 6% yield on a diversified portfolio, it is still way higher than the 1% that most bonds offer.
Building a good retirement corpus is generally a major investment goal for most investors. No matter which age you want to retire, it is very important to build a strong retirement corpus. Retirement planning is something everyone should do and there is a lot of help available for you in that aspect. There are some very useful tools that can help you calculate that, for free. In this post, we’ll look at the best retirement planning softwares for you. Online financial calculators have been quite popular among investors since the late 90s. While some services might charge you a nominal fee, there are some that are available for free as well. Now, we’ll look at the best free retirement planning tools for you to use. Let’s get started.
Best Retirement Planning Softwares in 2021
1. Facet Wealth Retirement Planner
If you’re looking for a great retirement planning software, we recommend looking at a financial planning service like Facet Wealth. Its retirement planner connects its users with a dedicated financial planner who helps you keep your assets in check and plan your retirement better. The planner from facet Wealth can also help with the management of your investment portfolio.
2. Betterment’s Retirement Savings Calculator
One of the other great retirement planning softwares is Betterment’s Retirement Savings Calculator. The name betterment is generally associated with its robo advisor services. Aside from helping you with hands-off investing, Betterment’s Retirement Savings Calculator also takes a more holistic look at its investors’ financial pictures to help with reaching specific goals. In order to use this fabulous free tool, you need to enter your age, your pre taxation income, existing retirement corpus and the amount of money you contribute to it every year. The calculator then goes on to estimate the amount you’ll be able to spend during retirement.
3. Charles Schwab’s Retirement Savings Calculator
Charles Schwab is a revered ame in the world of stock broking and has been around for almost half a century. However, it has evolved with time and it also offers one of the best retirement planning softwares in the market today. The free calculator on the Charles Schwab website helps you figure out where you stand and what you need to do in order to achieve your goals. You will need to enter certain details like your current savings, retirement goals, risk tolerance etc. and the calculator will do the rest for you. You’ll receive a summary of your retirement savings health, along with a series of suggested adjustments you can make to your portfolio.
Charles Schwab also comes with fantastic customer service and the website has 24 hour chat support to help you navigate your way through the calculator.
4. Stash’s Retirement Calculator
Next on the list of the best retirement planning softwares is Stash’s retirement calculator. Stash is another name that is big in the investment advisor world. For those looking for a quick picture of how much you need to save for retirement, Stash’s Retirement Calculator is a great choice. You will need to enter your age, your intended retirement age, your pre-tax income, and how much you’ve saved and are saving. Then, one of the best retirement planning softwares out there will give you a snapshot of how much you’ll need and how much you’re on track to have.
But Stash’s Retirement Calculator can also provide a more thorough outlook for those who are interested in it. The big reason behind that is the fact that you also have an option to choose to include many such assumptions into the mix. Assumptions such as how much of your current income is needed in retirement, your investment rate of return, life expectancy, and inflation. If you make informed estimates in this scenario, you will have a distinctively better idea of where you stand as it pertains to your retirement savings. Stash only requires a small investment of $5 in order to get started, so it’s fantastic for beginners.
5. Fidelity’s myPlan Snapshot
The next entrant on the best retirement planning softwares is Fidelity’s myPlan Snapshot. It’s a stellar app with fantastic and comprehensive features. Fidelity also happens to be one of the top ranked online brokers in the world today. Fidelity’s website also comes with a free retirement calculator which can go a long way in setting you up down the right road for retirement.
Fidelity’s myPlan Snapshot provides you a quick, down-and-dirty glimpse at your financial future. Just enter your age, annual savings, annual income, and the value of your total investment portfolio. Once you do that, Fidelity creates a visual representation of your projected assets. While you don’t have to sign up up with Fidelity in case you want to use its retirement calculator, if you already are a FIdelity customer, you can use your existing data on the platform to come up with a plan that is more comprehensive.
6. Vanguard’s Retirement Nest Egg Calculator
Rounding off our list of the best retirement planning softwares is Vanguard’s Retirement Nest Egg Calculator. Vanguard is a revered name in the world of stock broking and it also has some fantastic funds for investors (especially ETFs and mutual funds). While the website of Vanguard can do with a little work, it does have a decent retirement calculator. The vanguard Retirement Nest Egg Calculator needs the following inputs:
- How many years should your savings last?
- What is your savings balance today?
- How much do you spend each year?
- How are your savings allocated?
While Vanguard’s Retirement Nest Egg Calculator doesn’t provide a very thorough and detailed financial picture, you will still get a pretty good graph that informs you about the expected lifespan of your savings. It can serve as a quick snapshot of whether your savings are on the right track or not.
So those were the best retirement planning softwares for you in 2021. In case you were thinking about getting some help planning your retirement, these softwares should definitely come in handy. So go ahead and try them out today. Remember, it’s never too early to start planning for retirement.
With everything in the world turning digital, all of the world’s top brokerages offer online and mobile account management for their consumers. However, these brokerages launched the mobile versions after launching the traditional versions. A small group of modern day brokers turned this on its head and chose to adopt a mobile first approach and gave millennial investors a lot of investment power on their smartphone itself. Robinhood and Acorns are two such brokerages. Both of them boast about their low cost (“no cost” in the case of Robinhood) and great user experiences. Robinhood vs Acorns is a battle of two of the biggest names available today. Let’s find out which one wins.
Robinhood vs Acorns: Important Things to Know
What is Robinhood?
Robinhood is a commission-free trading app that is broadly divided into two sections: Robinhood Financial and Robinhood Crypto. Robinhood Financial helps users conduct stock trading (along with ETFs and options). Robinhood Crypto, as the name suggests gives investors the option to trade in cryptocurrency. Robinhood doesn’t have any base charge for users.
What is Acorns?
Acorns started out in this field by offering automated investing for $1 per month and kept on expanding via acquisitions to provide retirement accounts and bank accounts as well. Acorns Core is still available for just $1 per month. Acorns Core + Acorns Later (retirement account) costs $2, and the whole suite of Acorns Core, Acorns Later, and Acorns Spend (checking account with a debit card) is $3 per month. If keeping all your finances in one app is very important for you, Acorns is definitely one of the best options available for you. While it may not be “free” like Robinhood, it is still a low-cost and attainable option for new investors. Acorns has many ways investors can contribute to your account. You have the option to have automated recurring investments, round-up change from debit or credit purchase. You can also get bonus cash if you choose to shop with partner brands.
Robinhood vs Acorns: The Similarities
Both Robinhood and Acorns offer many features. First, let’s take a look at how they’re similar.
- Minimum Investment — None of the services requires a minimum investment to begin.
- Investment Account Types — Both come with taxable accounts.
- Investment Types — Both allow you to invest in ETFs.
- Mobile Apps — Both come with very good Android and iOS apps.
Robinhood vs Acorns: The Differences
Let’s take a look at the areas where Robinhood and Acorns differ.
- Robinhood has no commission-fees and no account fees for its basic account.
- Acorns charges $1–9 per month based on your tier of service.
Robinhood allows investors to invest in individual stocks while Acorns doesn’t.
Robinhood vs Acorns: Unique Features
- Robinhood’s basic account is free to use for everyone and no commissions are charged on any trades. You can enjoy buying a wide range of stocks, ETFs, and other investments without paying any fees. However, if you are a beginner investor, there isn’t a lot of guidance material or educational resources. Unless you are a savvy investor/do your research elsewhere, Robinhood might not be a good place to start.
- While it does support cryptocurrency and options trading, it’s not recommended for the average investor.
- Robinhood’s USP is the fact that it’s a full service stock broker that is almost free to use. You can do commission free trades in stocks, funds, options etc.
- Acorns offers unique and fun options to fund your account and takes care of the investments for you. While Acorns doesn’t allow its users to select individual stocks, it does make it easier for beginner investors since it frees them from the trouble of choosing the stocks for themselves.
- The three types of accounts available with Acorns are not free but very competitively priced.
- Acorns comes with some fantastically fun and unique options that can be used to fund your account. Take this for example, you have the option to round up your purchases and invest the spare change. You also have the choice to earn investment rewards when you shop with Acorns’ partner outlets.
Robinhood vs Acorns: Annual fees
- As discussed before, Robinhood offers commission free trading and a basic account without any charges. If you want additional features such as margin trading, you can opt for the Gold account at $5 per month.
- Acorns has three plans, priced at $1, $3, and $5 per month.
Robinhood vs Acorns: Customer service
Both Acorns and Robinhood offer support only via email. There’s no number to call. This might be problematic at times.
Robinhood vs Acorns: Security
Both Robinhood and Acorns utilise industry-standard security and encryption. Just make sure your password is strong, not something like “password” and your account will stay safe and secure. Both the companies are regulated and comply with federal laws.
Robinhood vs Acorns: Who Are They Best For?
- If you are an active trader, Robinhood should work very well for you. If you are an experienced trader in need of low cost, self-directed stock, ETF, options, and cryptocurrency trading, try Robinhood out.
- Acorns if best for people who are not very keen on long term investing. It works best for people who want to “set it and forget it”. It’s perfect for people looking for hands off long term investing..
Robinhood vs Acorns: Conclusion
So which is the best? The true answer to that is that it actually depends on you.
- If you can trade by yourself without a lot of assistance, Robinhood is great.
- If you can’t and want to pay someone for help, Acorns is excellent. However, the cost that you will have to shell out, will come out of the gains you make with your investment. Even though $1 per month doesn’t seem a lot, it can add up over time.
Calling investment apps like Robinhood and Acorns technological marvels isn’t that much of a stratech if you think about it. Just a few decades ago, it was almost unimaginable to think that investors will be able to carry out as many trades as they want with the help of a tiny electronic device in their pockets. However, the mobile phone revolution has changed the world so much that it’s impossible to imagine a world where we would do it any other way now. The battle of Robinhood vs Acorns boils down to the investor in the end. There is no loser in this battle. Both apps have some fantastic features which can be incredibly useful for all kinds of investors. Just be mindful of your own investment and financial goals and choose the investment platform accordingly. You will most probably make the correct choice.
For most millennial investors, starting their investment journey through an online investment platform/mobile app seems to be the natural way to go. And just like mobile apps/online platforms in every other category, there are a lot of options in the investment field as well. Two of the most popular platforms of that kind are Stash and Robinhood. Stash vs Robinhood seems to be a raging debate in the modern investment world. If you are an investor who is thinking about choosing between Stash and Robinhood, you’ve come to the right place. In this post, we will take a quick look at the differences and similarities between Stash and Robinhood and help you make the decision to choose between the two. Let’s get started.
Stash vs Robinhood: Important Things To Know
What is Stash
Stash is a three-tiered personal finance app that combines banking and investing and helps investors reach their financial goals. Stash charges a monthly base rate from its users and lets them create a budget, build a portfolio, create a retirement corpus and become more adept at handling their money.
What is Robinhood?
Robinhood is a commission-free trading app that is broadly divided into two sections: Robinhood Financial and Robinhood Crypto. Robinhood Financial helps users conduct stock trading (along with ETFs and options). Robinhood Crypto, as the name suggests gives investors the option to trade in cryptocurrency. Robinhood doesn’t have any base charge for users.
Stash vs. Robinhood: Services & Features
Both Robinhood and Stash offer taxable accounts and allow users to invest in cryptocurrencies and ETFs. Both these platforms come with iOS and Android devices. There are some features that are unique to each platform though. Let’s find out.
Stash sets itself apart with its SRI (socially responsible investing) portfolios. Users can focus their investments on different themes based on their values. Stash also comes with more than 100 investment options that are paired with a banking capability that holds the money of the investors when it’s not invested.
The company primarily works through fractional shares, which allows for its low initial costs. This involves the app’s buying a full share and splitting it up into smaller shares. In case the ownership of a $100 share is split, you will be able to claim ownership of it for any price.
Robinhood users can enjoy commission free investment in stocks, ETFs and other investment tools. Robinhood also comes with cryptocurrency and options trading. The website features a robust set of articles and other content that can help to make you more knowledgeable about its services, specific investment types, investing strategies and more. Robinhood does not have financial advisors available to assist investors in its free version but does give Gold customers access to Morningstar research.
Stash vs. Robinhood: Online & Mobile Experience
Stash’s app comes with a lot of educational materials and investment information. It also has a nice banking option. Users can also buy fractional shares of stocks on the app. It also has a very strong budgeting platform on top of the buying and selling platform.
Robinhood’s mobile trading platform comes with a lot of customization features. Users can customize their alerts, look at charts of their investments and even listen to live earnings calls. Users can also trade in cryptocurrencies with the app.
Stash vs. Robinhood: Fees
Stash comes with three tiers. The Stash Beginner program costs $1 a month. Stash Beginner comes with features such as banking with the Stock-Back card, investing, budgeting and personalized advice. The Stash Growth plan costs $3 per month and includes everything that Stash Beginner does, plus a Roth or traditional IRA capability. Stash+ is the third tier plan and investors need to pay $9 per month to avail its services. Stash+ has all of Stash Growth’s features while also providing custodial investment accounts for kids and an exclusive monthly report on market insights.
Robinhood has no trading fees or commissions. There are no inactivity fees, fees for moving money in or out of your account and in general, a very tiny amount of non-trading fees. Now, if you are wondering how Robinhood makes money, this is how it does it, it pockets the small difference between the buying and selling price of an asset. This generates very little money per transaction, typically only pennies or less per share traded, but over millions of transactions those pennies add up.
Robinhood’s approach hasn’t been free of controversy. The Securities and Exchange Commission (SEC) has scrutinised it on a few occasions. In December 2020 it said that one of “Robinhood’s selling points to customers [between 2015 and late 2018] was that trading was ‘commission free,’ but due in large part to its unusually high payment for order flow rates, Robinhood customers’ orders were executed at prices that were inferior to other brokers’ prices.” Robinhood agreed, without admitting or denying the SEC findings, to pay a $65 million civil penalty while agreeing to a cease-and-desist order.
Stash vs Robinhood: Who should use it?
Stash is quite good for first-time investors, providing a lot of help and guidance. For beginner investors struggling to find a place to start, Stash provides information on how to select suitable investments, manage your portfolio and offers insight on good trading tactics.
Stash is also great for people looking for a more hands on investing experience. Unlike most robo advisors which tend to have a hands off experience, Stash allows users to make direct trading and investing decisions.
Stash is also great for people interested in Socially Responsible Investing (SRI) as it gives investing options that make it appealing to people who want to invest based on their values like environmental concerns.
While Robinhood doesn’t necessarily require you to have ample investment experience prior to joining, it’s helpful if you have the ability to be an independent investor. While it does feature some educational material on the website, it does not have advisory representatives to help you make your investment choices. So, Robinhood is definitely more suitable for people looking to trade stocks without any fees and commission. The friction free platform is also great for active traders, helping them buy and sell at will.
Robinhood’s mobile and internet centric platform requires a good amount of technological proficiency. There are no physical branches of Robinhood but the app and website are available throughout all 50 states and Washington, D.C., Puerto Rico and the U.S. Virgin Islands.
Stash vs Robinhood: Conclusion
As you might have noticed that both Stash and Robinhood are good platforms for people looking to invest. Robinhood’s fee-free structure is ideal for active traders and investors who are looking for commission free trading. Stash on the other hand is better for people who want to learn more about investing while they are at it. The Stash vs Robinhood battle ends up being a dead heat since both of them are user-friendly and come with low barriers to entry for everyone who is looking to start investing in stocks and other investment tools.