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Let's Save Some Money - Part 3 of 4

You've mastered saving cash in a jar and the ins and outs of checking and savings accounts, now it's time to learn about investment accounts. Investment accounts give you the opportunity to buy stock in companies or to loan companies money by purchasing bonds. If you want to buy a whole segment of the economy (small companies, technology companies, international bonds) you can purchase an Exchange Traded Fund. ETFs make it easy to diversify portfolios. However, if you believe a given company is undervalued or is going to go up, you may instead want to purchase shares in that company without getting a whole basket of similar companies.

If you consider yourself to be a tech savvy millennial and you want to buy and sell securities without any help or professional guidance, I recommend using Robinhood. Here you can open an account, link your primary bank account (remember the difference between primary and secondary bank accounts from part 2), and start buying and selling stocks. Robinhood doesn't charge trading commissions.

If you don't consider yourself to be a tech savvy millenial, but still want to buy and sell securities without any help or professional guidance, I recommend using a traditional discount brokerage (E*Trade, TD Ameritrade, Schwab, etc). These sites allow you to open an account, link your bank account and start trading, but they offer more guidance and features than Robinhood. These added features are built into the trading commissions you pay. All of these sites charge less than $7 per trade.

If you prefer to invest by having someone else do the work for you, I recommend using a robo-advisor (Betterment, Wealth Front, Stash, etc) or a hybrid robo-advisor like GA Pincus Funds, my dad's firm. These companies will also enable you to open accounts and link your bank accounts to continue funding the accounts over time. The difference is, once the account is open, the robo-advisor does the investing for you. These firms build risk profiles for each client and use algorithms and ETFs to manage your wealth.

Just because you are investing in the stock market doesn't mean you are automatically saving for retirement. I suggest saving in investment accounts for fun things like dog houses!

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