Investing in an ADHD-friendly way to me means finding an intuitive, low-stress investing company that doesn’t require a lot of time to get started.
Betterment is a company I found that checks all the boxes, so I’ll be walking you through how to use them to begin investing.
Betterment is intuitive for novice investors and seasoned participants looking for a simplified, automated service to manage their money.
The first step when starting to invest is to make sure you’re ready. It would be best if you did not have any high-interest debt and established, at the bare minimum, three months of expenses in an emergency fund.
The next step is to decide your investing goals, such as retirement, a house, college, a wedding, or a significant upcoming expense. It can also be purely to build long-term wealth. Attaching a goal to your money creates a forward vision and prepares you for commitment and success.
When setting up an account with Betterment, they will ask you to set goals and allow you to assign multiple goals into investing buckets.
Next, you’ll need to decide how much money you are going to initially invest, the frequency of how you would like to schedule your contributions, and what your target goal should be.
For example, do you need the money for a down payment on a house or retirement? If so, when?
Betterment helps you answer these questions during the account setup process to visualize how much money you will need to contribute to the account regularly, and achieve your goal over the time frame you choose.
Like other services, Betterment has a management fee. Their fee is .25% of your investment account each year. If you have $10,000 managed with them, you will be paying them $25. It’s a small amount, but something to keep in mind.
Betterment will recommend an asset allocation based on the goal type and the time until you need the money. If you were to invest for 30 years, they will recommend an asset allocation heavily weighted towards stocks.
For example, a 90% stock and 10% bond portfolio.
You can also tweak the asset allocation up or down and choose different portfolio options. Most investment companies offer portfolio options including socially responsible portfolios (environmental and climate impacts, social issues, or broader global impacts) or innovative technology portfolios offering investors exposure to high growth potential companies.
Let’s say you have $5,000 to invest. You can either invest the total amount at once or use a dollar-cost averaging method to spread the amount over time.
If you are a beginner and a little nervous, consider starting lower and slower.
For example: You plan to invest $1,000 per month over the next five months - or $250 per month over 20 months.
You can also potentially reduce the average price for the investments with dollar-cost averaging. Let’s say the same $1,000 buys you 100 shares this month. Maybe it will buy you 110 shares of the same investment next month. If the price goes down, it could lower your cost, thus reducing the potential adverse effect of buying your initial investment at the wrong time, like right before a market sell-off.
Once you have a few months of investing under your belt, check-in periodically to see how your investments are doing. You do not want to be checking your investments every day as you can get overly fixated on short-term price fluctuations.
Stick to your plan, contribute money to your investments to build a financial fortress, and transform your financial life.
I focused on Betterment for this episode; however, other financial services are available, such as Wealthfront, M1 Finance, Schwab Intelligent Portfolios, SOFI, and Acorns. Each service offers slightly different minimums, fees, and portfolio options, so do some research to help you decide.
I hope you’ve enjoyed this three-week series on investing, and it has helped you begin thinking about investing responsibly. If you have any questions, please don’t hesitate to reach out via DM, Instagram, ADHDMoneyTalk, or ADHDMoneyTalk.com/contact.
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