Years ago, "investing" was only associated with traditional stocks or bonds; that's no longer true. Today, you can invest in real estate, stocks, ETFs, cryptocurrency, venture capital, and even art! Not only that, it is easier now, more than ever, for anyone to start investing for as little as a few bucks. Nonetheless, it's imperative to research to determine the best investment opportunity for you.

Below are key points on some investment platforms available in 2024, so continue reading to get your investment journey started!

Acorns

Overview

Acorns is an easy platform for anyone beginning their investment journey, as it offers users a way to invest passively. It acts as a robo-advisor that invests your spare change — and any other contributions you make — into a selection of about 25 low-cost, diversified ETFs (Exchange Traded Funds).

An ETF is an investment fund and exchange-traded product that combines features of mutual funds and individual stocks. ETFs are designed to track the performance of a specific index, commodity, bond, or basket of assets (like Blackrock's iShares Core S&P 500 ETF, which aims to replicate the performance of the S&P 500 index). With a debit or credit card linked to an Acorn account, investors can participate in the Acorns Round-Ups® program to round up their purchases to the nearest dollar and watch their money go safely into an accretive ETF or fund their accounts through recurring or on-demand deposits.

Minimum Investment

To invest with Acorns, you will need a minimum of $5 to start investing.

Fees

Acorns invests your savings into ETFs selected based on your financial goals and risk-comfortability, and they allow users to contribute as little as five dollars to their account with monthly flat fee rates between $3, $6, and $12, depending on your tier selection. 

Investor Type

Anyone can invest with Acorns.

Advantages

Acorns is relatively inexpensive and very approachable. Round-Ups make it easy to put investing on autopilot. Because your contributions can be so small with this tool, it makes investing accessible for almost anyone- for example, Acorns seems to be the perfect way for a high school or college student to put money away towards their retirement or student loans.

Roots

Overview

Roots, through its online REIT (real estate investment trust), offers a portfolio of residential and small multi family rental properties in the greater Atlanta area. Roots has a unique model in which residents of Roots' properties get invested in the fund for being good renters. By simply paying rent on time, taking care of their property, and being a good neighbor, a Roots resident can gain tangible equity in the fund, something that's incredibly important to find in a country where 69% of Americans have less than $1,000 in savings. This program has led to low vacancy, low turnover costs, and great returns for its investors.

As a REIT, Roots is required to distribute at least 90% of its profits and allows investors to liquidate, quarterly. Since the fund's inception, Roots has distributed over $2 million.

Minimum Investment

Roots allows you to invest with a minimum of $100.

Fees

Roots has a low fee structure, with only a $5 transaction fee for your first investment and a $3 transaction fee on any recurring investment. Roots offers the ability to liquidate quarterly as well, $100k or up to 5% of the fund. If you need to liquidate your funds before one year, there is a 6% early withdrawal fee, but there are no withdrawal fees after the one year point.

Type of Investor

Roots is open to all types of investors.

Advantages

Roots' average annual return is 17.17%, and the fund has returned 51.5% from July 1, 2021-July 10, 2024. In the second quarter of 2024 alone, Roots distributed $427,083.11 to its investors. Yes, those are great returns that beat out other top-performing REITS, and sure, Roots is in a great spot because its portfolio consists of properties in the fourth-hottest real estate market in the country, but the fund's social impact may be its most compelling attribute.

Through its Live In It Like You Own It® program, Roots residents get invested in the fund simply by paying their rent on time and taking care of the property. Roots is on a mission to allow anyone to invest in real estate, even the residents who live in the properties.

Masterworks

Overview

Masterworks allows investors (accredited and non-accredited) to invest in fractional shares of fine, contemporary art pieces. Then, if said pieces are sold for profit, investors will see their investment returns. Masterworks has completed 22 successful sales to date after purchasing 430 pieces.

Masterworks charges a 1.5% annual management fee and 20% of any profits once a painting sells. Along with the substantial capital required to begin your investment and the subsequent fees investors pay after joining, investments can also take longer periods to pay off (due to the nature of art purchasing). That being said, they consistently return between 10%-20% after fees.

Minimum Investment

To start investing with Masterworks, you’ll need $15,000 for the minimum first investment.

Fees

Masterworks charges a 1.5% annual management fee, plus the company takes 20% of any profits from an artwork’s sale. Other applicable fees may apply, which are detailed in the offering documentation that investors receive.

Type of Investor

Masterworks has the highest barriers to entry on this list. To invest with Masterworks, you need to be able to afford the costly minimum first investment and pass a quick interview process- not nearly as inclusive as investing with Acorns or Roots, but perfect for the experienced investor or art connoisseur.

Advantages

While Masterworks may not be the first choice for most middle-class, novice investors, it's a great concept. Between 1995 and 2022, Contemporary Art specifically has appreciated at a compound annual growth rate of 12.6%, outperforming the S&P 500. Masterworks has become the first platform to offer art investment products to the retail investing public. The company has sold almost two dozen paintings, all at a profit after fees. The artwork includes Cecily Brown (77.3% return, after fees), a George Condo (39.3%), and a Sam Gilliam (33.1%). For those who are high-earners and want to diversify their portfolio, Masterworks is a unique solution with consistently high returns.

Robinhood

Overview

Robinhood is a financial services platform that offers commission-free trading of stocks, options, exchange-traded funds (ETFs), and cryptocurrencies. Robinhood has an incredibly user-friendly platform made for everyday investors – specifically on mobile phones.

Robinhood appeals to the masses because their minimum investment $1, and they don't have high annual management fees, making it perfect for anyone who likes to trade frequently. Robinhood pays investors an interest rate of 0.01% on un-invested capital in their account – 5% if you elect to pay $5 per month for Robinhood Gold, their premium account tier, which is actually a higher yield compared to most similar brokers.

Minimum Investment

Robinhood has a $1 minimum investment.

Fees

The Financial Industry Regulatory Authority (FINRA) is required to pay this fee to the Securities and Exchange Commission (SEC) by law. To generate the funds necessary to do so, FINRA passes the fee on to its members, including Robinhood, which passes this fee along to its customers (except for sales of 50 shares or less). The transaction fee is $0.000166 per share (equity sells) and $0.00279 per contract (options sells).

Type of Investor

Anyone can be an investor with Robinhood.

Advantages

The company is consistently one of the top downloaded finance apps on the App store, and it's debatably the most accessible app to use for trading stocks because of its straightforward interface. Since there is no account minimum and it offers premium users a high interest rate on un-invested cash, it's a perfect app for learning how to buy and sell stocks.

Ready To Start Your Real Estate Investment Journey? Invest With Roots

Just imagine owning real estate where your renters wanted it to succeed as much as you do.

Start investing with as little as $100, and own a piece of the only real estate fund that creates wealth for both its investors and its residents. It took us years to build Roots, but you can invest in as little as 5 minutes.

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Sources

• Roots - Social Impact
• Roots - Performance
• Acorns - Investment Account
• Acorns - Pricing
• Acorns - Forms
• Masterworks
• Masterworks FAQ
• Masterworks Review 2024
• Ways to invest with Masterworks
• What’s Robinhood Gold?
• Robinhood
• Robinhood - Trading fees
• Robinhood - Invest

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