Hola bellas! Imagine having a robot that cleans your house or, better yet, a robot that makes you money. If this sounds interesting, you might consider robo-advisors. Let the robots make you money! Robo-advisors, aka automated investing, use advanced software and algorithms to put together your investment portfolio and manage it over time (some companies have human advisors available to answer questions).
They’re a good option if you want to get started quickly and do not have much experience investing as they make the investment decisions for you. Also, you do not need much money to get started, as they have zero or low minimums. They offer lower costs than human financial advisors. Robo-advisors, on average, charge an annual fee of .05% of the money you have invested. Usually, human financial advisors charge a 1% or more yearly fee.
Another benefit of robo-advisors is that you don’t usually pay transaction fees that you would pay to a normal brokerage account, but since most robo-advisors include exchange-traded funds (ETFs) and index funds, you will pay separate fees charged by those funds, in addition to the management fees.
If you have something you want to save for, but don’t know how to do it, you can have the robo-advisors adjust the investments, according to your goals. For example, if you want to save long-term, for retirement, or for high-interest cash savings, the robo-advisor will automate your investments accordingly and it will be done at a lower cost than through a human financial advisor.
What are you waiting for bellas? The sooner you get started investing, the larger chance you have to grow your dinero!