The aim of Smart Money Smart Living is to empower millennials to learn how to manage their money, get out of debt and invest their money to achieve financial freedom. A key element of that is to use the best possible financial solutions to help you manage your money. Hence, I have created a list of smart money management options that offer better solutions than traditional financial institutions. This list is composed of products and services that I either regularly use, have used or have trialed and can therefore highly recommend.
Buy, Sell & Store Bitcoins with Coinbase
If you want to buy, sell or store your bitcoins and become part of the bitcoin economy, then Coinbase is your go-to platform. CoinBase is one of the leading online bitcoin wallets and payment services. It has an easy-to-use user interface on both its web-based platform and its smartphone app. CoinBase is great for bitcoin beginners as it allows you to buy and sell bitcoins at very reasonable rates via its marketplace and allows you to store your bitcoins safely online. I have personally been using their service for several years now and highly recommend it.
Cheap International Money Transfers with TransferWise
TransferWise is an international money transfer service based in the U.K. that allows you to “save up to 89% on your international payments” compared to what banks charge. I personally use their service regularly and high recommend it! Their easy-to-use mobile app and web-based platform make international money transfers extremely easy to execute and you are no longer forced to pay the offensively high fees, which your high street bank would charge you for this sort of transaction.
Cheaper International Money Transfers with TransferGo
TransferGo is a London-based remittance startup that offers fast, low-cost international money transfers to and from 45 countries globally. You can send money using their web-based or app-based platform in an easy and efficient way. Using TransferGo, you can save up to 90% on international money transfers compared to when using your high street bank. It’s an excellent service for anyone who regularly sends money around the globe. Fees start as low as £1 per transfer.
Digital & Mobile Banking (US) with Simple
Simple is a leading digital bank based in the United States. Simple offers mobile and online banking services which include FDIC-insured checking accounts, a visa debit card, automatic budgeting & saving tools and wire transfers without charging any fees. With their user-friendly smartphone app and web-based platform they make financial management and budgeting extremely easy and are one of the few banks in the United States that offer no-fee banking.
Digital & Mobile Banking (UK) with Monese
Monese is a London-based branchless digital bank that offers instant account opening via their smartphone app, regardless of whether the customer can provide a utility bill or not. This provides an excellent service for expats, immigrants and digital nomads as all you need to open a bank account is your ID, an EEA address and to be above 18 years of age. Monese offers effortless mobile access to a low-cost UK current account, cheap international money transfers and a Visa debit card you can use anywhere in the world where Visa is accepted.
Online Wealth Management (US) with Betterment
Betterment is one of the leading ‘robo-advisors’ in the United States. Robo-advisors provide a digital investment management service that offers automated, algorithmic portfolio construction and investment advice, without the need for human financial advisors. The way Betterment work is you log onto its platform. You answer questions that determine your risk-return profile. You confirm that you are happy with your risk classification. Then you deposit the initial amount you want to invest and off you go. Betterment then invests your money into a diversified portfolio of low-cost ETFs (exchange traded funds). The whole setup process only takes a few minutes, which is great for those looking to make their first investment. The great thing about robo-advisors is that you can set up automatic payments from your bank account into your diversified portfolio. This means you can add, for example, $100 each month into your portfolio. Thanks to the power of compound interest this will grow your wealth substantially over a 5 to 10 year period using Betterment.
I highly recommend robo-advisors, such as Betterment, for millennials as they are easy to use and you will incur substantially less fees than when using traditional financial advisors or investment companies.
Online Wealth Management (UK) with MoneyFarm
MoneyFarm UK is a leading robo-advisor in the United Kingdom and the online wealth management service that I personally use. MoneyFarm offers an easy-to-use mobile app and online platform that allows you to determine your risk profile and then algorithmically generates an investment portfolio that suits your risk tolerance. You can also set up automatic monthly (or weekly) payments into your portfolio so that you can benefit from the power of compound interest over a 5 to 10-year investment horizon. What I like the most about MoneyFarm is that they charge ZERO FEES for investments under £10,000. This makes them an ideal robo-advisor for UK-based millennials that only have a small amount to invest, but want to get started. MoneyFarm also has excellent customer service.
Peer-To-Peer Lending (US) with LendingClub
Peer-to-peer (P2P) lending refers to a method through which individuals and small businesses can borrow money from individuals without the use of a traditional financial intermediary. This enables financing for those who are finding it hard to secure a loan from a bank. On the other hand, individuals who lend money through peer-to-peer platforms can generate strong fixed interest returns, with low transaction fees and a low correlation to stocks and bonds, which makes P2P lending an excellent alternative investment asset class. LendingClub is one of the leading peer-to-peer lending platforms in the United States. Whether you are looking for a loan or a fixed interest investment, LendingClub provides you with a transparent way of borrowing or lending money at reasonable interest rates.
Peer-To-Peer Lending (UK) with CrossLend
Cross Lend is one of the leading European peer-to-peer lenders and offers attractive interest rates for investors and borrowers. The way investing in P2P loans using CrossLend works is that you sign up to their platform by filling in your personal details and completing the risk assessment questionnaire. Then you go through security verification and once completed, you can deposit the amount you want to invest in your account and decide on your investment horizon and what percentage interest rate you are looking for. CrossLend offers peer-to-peer loans within a set of different risk classes ranging from A to HR. The higher the loans rating, the safer it is and therefore the lower interest rate. If you want a higher return, you need to choose higher risk loans. By investing in a set of CrossLend’s HR (high risk) loans “you can generate up to 14%+ annual returns”.
Pre-Paid Debit Card from Revolut
One of the most annoying things that can happen is losing your debit or credit cards. If the ATM suddenly decides to swallow your card or you accidentally drop your credit card on a boozy night out, you can easily find yourself without access to cash. Hence, getting a prepaid card (or several!) is therefore a great way to hedge yourself against running out of access to cash. Revolut is a London-based FinTech start-up that issues prepaid MasterCards with low fees and an easy-to-use smartphone app that helps you budget and lets you make free money transfers. An excellent service for long-term travellers and anyone who wants to be part of a cashless society. And as it is a pre-paid card and not a credit card, there is no chance of you raking up any debt as you can only spend the money that you load onto the card.
Social Trading with eToro
Social Trading is an innovative way of trading financial securities (such as stocks, bonds, commodities, indices, etc) and refers to using financial social networks that allow you to copy trades of ‘professional traders’ to generate a profit. This concept is very new and has sprung out of the growth in fintech and the increase in use of social media networks. eToro is the market leader in social trading and offers an excellent, user-friendly platform where you can search through successful traders, track their performance, engage with them and copy their trades automatically to generate a trading profit.
Theme-Based ETF Investing (US) with Motif
Motif investing is an entirely new approach to investing your money. Motif investing refers to investing in theme-based baskets of stocks and ETFs that mirror the performance of specific areas you would like to invest in. The way motif investing works is you sign up to its online platform and choose which motifs you would like to invest in. Each motif features between 20 to 30 stocks or ETFs that follow particular themes. These can range from ‘Wearable Tech’, ‘Online Gaming World’ and ‘Caffeine Fix’ to ‘Too Big To Fail’, ‘3D Printing’, ‘Recent IPOs’ and many more. Once you have chosen the motifs you want to invest in, you can add and remove stocks in each motif to ensure that you are happy with your overall investment exposure.