10 Things to Know about Investing Apps in Your 20s and 30s

By Eric Tyson

Most investing apps are offered by existing larger companies as another option for their customers to connect to and interact with what they offer. And, of course, companies would love for you to use their apps so they can continue to promote themselves to you and ensure that you remain a loyal customer. The investment companies you do business with — banks, mutual fund companies, brokerage firms, and so on — are no exception.

That said, you can also find some apps offered by smaller, start-up companies that solely exist online and perhaps even only as an app. You don’t need me to tell you that you should be skeptical and extremely careful with such enterprises.

Over time, the best new firms emerge and help improve the overall financial landscape and your options. But you don’t want to be some small company’s guinea pig. Given the choice between a start-up and a longer-standing, proven, successful investment company with good customer service, you can guess which one should get your investment dollars.

With that as background, here is some advice for how to make the most out of using investing related apps and sidestep common app pitfalls and problems, as well as a short list of the best investment apps.

Beware of the General Dangers of Putting Apps on Your Cellphone

Computer viruses, malware, and ransomware attacks have garnered more attention, but similar problems occur with smartphone apps. The worst of the lot can end up tracking and spying on you. Some are a scam and/or some sort of virus or malware.

Even if an app doesn’t have these nefarious issues, you should also check out the background and agenda of any company offering an investment-related app and understand how such companies may be making money from the app. Most apps are nothing more than glorified advertising from the company behind the app. Sure, the product may dangle something seemingly helpful (such as free stock quotes), but ultimately you need to uncover what the provider’s agenda, track record, and reputation are.

Do your research on an app before downloading and beginning to use one. Check with more than one independent source and read independent reviews, especially those which are critical and less than flattering.

Use Apps Only from Proven Companies with Good Reputations and Longevity

Most of the companies I recommend in this chapter are fairly large companies with lengthy track records of success. For sure, technology is disrupting and changing many industries and companies. But that doesn’t mean you should only do business with firms that exist solely online, in the cloud, and so on.

First, such companies are far more likely to be here today but gone tomorrow. Second, if you need actual customer service — such as talking with a real live person by phone — some of these newfangled firms simply don’t provide such contact options. They may only offer email, which isn’t ideal for resolving nuanced or mildly complicated problems. Finally, start-ups by definition lack a long-term proven track record.

Research the history of companies that you’re considering doing business with. Download apps directly from the company’s website so you’re sure you’re getting their actual app rather than a knock-off or a fraudulent one.

Consider the Alternatives to an App

Before downloading and using an app, you should question the need for it and consider the alternatives. Remember that the company behind the app wants to tie you to its company so you do more business with it. Is that your goal?

You likely have your phone with you all the time. Do you really want this app running and in your face all the time? Maybe, maybe not — think about it and examine the alternatives. Getting constantly changing investment prices on your phone every hour or every day isn’t going to make you a better investor.

Use the Best Personal Finance Apps to Have More to Invest

Unless you’ve been fortunate to earn a lot of money in a short period of time, received a large inheritance, or won the lottery, you likely want more money to invest. Some folks need extra help and hand-holding to lick the problem of overspending, and some simply want to feel on top of where their money goes and do something constructive about it. Many websites and related apps purport to address this problem, but in reality they have massive conflicts of interest through the affiliate relationships (that is, kickbacks) they have with companies that they direct business to. Advertising is also a common problem.

Some apps to date have overcome these problems, but things can change, so don’t take my current recommendation in this space as a forever endorsement. That said, here are a few good options right now:

  • The Goodbudget app offers its simplicity and practicality. The basic version provides you with up to one year of spending-tracking history in 10 main categories (envelopes). A paid or premium version ($45 per year) gives you up to five years of expense tracking with unlimited categories as well as email support. Start with the free version and then deciding later whether an upgrade is worth your while.
  • Some apps are simply designed to save you money. GasBuddy, for example, shows you the price for gasoline at various service stations in a local area. It’s free for consumers to use.
  • Especially when you’re going on lengthy car trips, car tolls can add up quickly. The Tollsmart Toll Calculator app is a low-cost app that enables you to compare toll costs for alternative routes. The Waze app can help with navigating traffic. Somebody should really combine a navigation app with the information from a toll app so drivers can select routes that save time and money!
  • CamelCamelCamel is a price tracker that scans items on Amazon, shows you their price history, and sends you alerts when a product you’re interested in drops in price. PriceGrabber scans items everywhere online, although its website is much easier to use than its app is.

Be Skeptical of Investing Apps Offering “Free” Trading

Thanks to deregulation decades ago, and now technology, brokerage trading fees have dropped dramatically. Many leading investment companies that I highlight elsewhere in this book offer broad menus of the best investments (for example, mutual funds, exchange-traded funds, stocks, bonds, and so on). I explain in this book how to buy many of the funds without any trading fees at all, and when fees are levied, they’re typically quite low.

But that hasn’t stopped some folks from trying to offer even better deals. Hence, the rise of some brokerage firms claiming “free” trading. Of course, there’s a catch — a brokerage firm can’t possibly exist, let alone survive, if it doesn’t charge any fees at all for any of its services.

One such company offering “free” brokerage trades had many catches when the author researched what it offers:

  • It exists only as an app, so you can’t access the company through a traditional desktop display or through a web-based version.
  • If you need customer service or help resolving a problem on your account, you have limited access to phone assistance, and then only during normal business hours. After hours, including on weekends, you’re stuck using email.
  • You can only use the app for taxable accounts; it doesn’t offer retirement accounts like an IRA.
  • It also doesn’t offer mutual funds.
  • You can’t tap into any tools or research.
  • If you want or need a paper statement of your account, it will cost you $5 each time you request it.
  • Should you decide to close your account and have it transferred to another broker, you get to pay $75 for the privilege of leaving.

Review Current and Historic Financial and Economic Data

The St. Louis Fed’s signature economic database — FRED, which stands for Federal Reserve Economic Database — is accessible through an app. Here’s a rare case where you can have a wealth of data at your fingertips and not be bombarded with ads or plugs to buy things.

Are you curious how the latest unemployment rate compares with prior years and decades? Would you like to see how corporate profits stack up now compared with past economic cycles? How about understanding what the “financial stress index” is and how it has changed in recent months and years? You can see all this data and much much more on the St. Louis FRED website.

Invest with Leading Fund Providers

Of course, many banks, investment companies, brokers, and so on have apps. So if you have a favorite investment firm or bank, check out what it offers. For its broad array of cost effective funds with solid long-term performance, I use Vanguard’s app.

In addition to Vanguard, other major fund companies with quality offerings and apps include T. Rowe Price and Fidelity.

Tap into the Best Investment Brokerage Firms

Check out the apps offered by leading investment brokerage firms recommended in this book, such as ETrade, TD Ameritrade, Scottrade, and Charles Schwab. Also remember that the leading fund companies mentioned in the preceding section also have discount brokerage operations.

Examine the Best Real Estate Apps

If you’re looking for a home or basic types of investment real estate, the Real Estate App from realtor.com has the most comprehensive and up-to-date collection of listings. It includes a mapping feature that enables you to specify specific areas in which you want to see the homes for sale. Also, you can detail specific features of a home that interest you. If you’re still a renter, realtor.com also has an easy to use Rentals App.

Seek out Good Small-Business Apps

You can find lots of apps for small business. Among the better ones are the QuickBooks App and the Wave Accounting App for small businesses (not to be confused with the Waze app for trip navigation). Dropbox is also a quality app; it is a cloud-based service for storing and sharing documents, files, photos, videos, and so on.