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  • Writer's pictureThe Unshaken Female

How I Started Investing in Exchange Traded Funds

Updated: Dec 21, 2023

Exchange traded funds (ETFs) are a beautiful thing.

Let me tell you, I was the worst at managing my money. I don't have any background in finance, and I've always struggled to save money due to my ongoing spending problem!

That being said, I've never had more of an interest in the exchange market as I do today!

I'll spare you my life story for now and share where all of my valuable self-taught money lessons began.

Aside from my traditional family virtues of working hard and saving, I've gathered information only from reputable online sources {AKA NOT YOUTUBE!} to advance my knowledge in today's fintech & investment portfolio management.

One of the most essential financial tips I learned over the years is to be as diversified as possible no matter what! Based on historic events and the economy as a whole over the years, the market has ultimately been able to advance and overcome all major obstacles. That being said, investing consistently over the years regardless of the state of the economy will pay off in the long run!

In 2015, I had a brokerage account with an advisor who did not have any active interest in me at all and spoke gibberish while showing predictive charts "only if I do this or that" to have millions in a few decades. This still didn't incentivize me to save for the future because I never fully understood what was going on with my money while it "accumulated" and/or I didn't care.

I was making poor money decisions & impulse purchases after graduation without setting a budget. I kept withdrawing funds from the account to pay off credit card debt so that clearly wasn't working out well for me. I was going to dig myself deeper and deeper into trouble without the help of my family and smart investing. It felt like I would never be able to get myself out of the cycle of working just to pay off credit cards without being able to build a portfolio outside of my 401k.

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Diversification is already taken care of for you with ETFs, no matter what sector of the market you're investing in!

One night, in 2017, I was lying in bed scrolling through my phone looking for creative extra ways to pay off my mountain of debt when I stumbled across an ad on social media for Acorns, an app that micro-invests your spare change & additional contributions automatically. That is, having every purchase be rounded up to the next buck and growing compound interest!

I thought the idea was genius and figured I had nothing to lose at that point so I downloaded the app! It felt like I had heard of the concept before, or I was thinking, "where has this been all my life?"!

Thanks to technology, you don't need more than $5 to start investing these days. Many investment platforms require you to buy whole shares of companies or ETFs at a time, but today many fintech apps can invest your small contributions into fractional shares so you can start building your portfolio with just change. Since it such a small amount that you're starting with, its very easy to turn your back and let the passive investing strategy work for you. You don't even notice the change coming out of your checking account which is the best part!

Acorns allows you to start from scratch with only $5, OR invest a lump sum of your cash into their robo-investing vehicle while continuing to contribute more. They offer automatic investing set to a daily, weekly, or monthly contribution of your choice. Their plans are simple and straight forward, and literally requires little to no experience investing. The difference is, they WANT you to learn more by offering informative articles and resources right from their site or app. Once you have it, you'll start noticing your spare change (linked to your credit/debit card purchases) and automatic contributions snowballing up and working its magic of compounding overtime. Depending on your timeframe, you can choose different portfolios including the option of a Roth IRA and/or a savings account designed for your kids to start early as well as your own.

But what I still did not know to that day was what was actually happening to that spare change, while it was growing. Being the technical nerd that I am, I needed to understand more, and thankfully I had the resources available to me now on this new super user friendly app!

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After I linked my accounts and got the ball rolling, I started poking around the app and read articles about basic financial knowledge, diversification, and the power of compounding.

Gradually, it started making sense to me as to what those hard working pennies were doing behind the scenes! The rounded up investments (linked to my daily credit card purchases) would automatically be diversified into simple segments by a robotic advisor based on my profile settings, covering the whole broad spectrum of the market/bonds.

These major segments (i.e. large cap stocks) are broken down for the layman and displayed as a group stocks on the app, allowing you to view how your money is "micro-investing". This concept is genius, and the only $1-$3 fee is fixed and built into your portfolio, meaning you don't have to pay thousands of dollars for an advisor to receive commissions every year. Then I learned the terminology of the catalyst for all of this. An exchange traded fund (ETF). The coolest part about this was learning that I could own a portion of hundreds to thousands of companies within 1 single stock fund, all with one unique ticker symbol! That single fund costs a lot less than the individual company stocks added up all together, allowing you to invest small amounts at a time and having the technology do the heavy lifting for you. This can easily be confused with a mutual fund and they are not the same!

I'm sure you've seen this everywhere by now. But just 5 years ago? Not so much...

ETFs are already a multi-trillion dollar market and has just started growing in popularity! If you're detail-oriented and want clarity on what you're investing in, ETFs might just be the investment vehicle for you!

I'm not going to sit here and lie to you by saying "it's easy" because it's not! It requires dedication {obviously} with almost a "need to save in order to save" mentality, but not actually waiting to find out the hard way. The best part is, now has never been a better time to start investing for the near & far future, no matter how old you are!

Stay tuned for more information on investing!

XO Hope



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