Investing might seem like a great way to earn money in the form of returns. However, there are many problems you might face. For one, you may not have vast amounts of additional deposits to invest. It is especially true for people in the comparatively younger age ranges.
Further, most people do not know enough about investments. Picking the right investment option for you that maximizes returns and minimizes risk is a whole other struggle. There are several phone apps available today to help you with this. One such innovative investment application is Raiz. So let us know some more about it.
Investing Through Raiz
Raiz, formerly known as Acorns, is a platform like Uber and Airbnb. It is a micro-investing smartphone application specifically targeted at people in the age range of 18 years to 35 years. It connects aspiring micro-investors with some spare cash to ETFs or Exchange Traded Funds. The main problem that young people face in terms of investments is that, firstly, they do not have a vast reserve of spare money. Secondly, they do not understand how investments work, as mentioned above.
Raiz makes the process easier and more accessible to its users. It pools micro-investments from many sources to purchase a basket of ETFs. That is an automated tool and eliminates the hassle of human decision making. It attempts to educate the people about investments too.
It is effortless to invest money using the app. After you download it on your phone, you need to link the investment account to your bank account and debit/ credit card.
They have also come up with unique and innovative ways of securing the micro-investments-
Round up – When buying something from your card or bank account, they round off the figure to the next digit. The amount of surplus of the purchase price gets deposited into your investment account.
Lump-sum – When you have money saved for investment purposes, you can put it into your Raiz account from your bank account very quickly.
Recurring – You can deposit a sum of money every week or month into your Raiz account. The app has also partnered up with some retailers. Whenever a Raiz user purchases something from these selected retail partners, they put a percentage of the total amount or an agreed-upon fixed sum into their Raiz account.
Often people resort to investment advisors for decision making and investment assistance. But micro-investors do not find help or interest from such advisors since they look for people with a considerable amount to invest. Raiz eliminates this issue and the related costs.
However, the safety issues of investing via a mobile app may be a concern for many. Firstly, since the basket size of the ETFs and their mix is broad and varied, the risk associated with the failure of stocks is shared.
In the unlikely but possible case that the company goes bankrupt, your money should still be safe since the deposits, and their transfer is looked after by a third party.
Raiz also has an Australian Financial Services license and has a robust security program in place to prevent hackers from breaking in.