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How You Can Use SoFi Automated Investing to Plan their Retirement Portfolios

SoFi Automated Investing

Investing is tough and there is always a risk of losing your hard-earned money. Risking your retirement through one bad stock pick could destroy your dreams of travelling the world, paying off the house, and doing the things you love.

Your investment portfolio will always have an element of risk attached, but you can limit this risk by diversifying your portfolio and choosing the right places to put your money.

SoFi Invest represents the cutting edge of the new phenomenon of automated investing. This robo-advisor is aimed at both beginners and frugal investors.

Let’s take a look at how you can take advantage of it. We also recommend reading this detailed SoFi review for more information on the platform.

How Does SoFi Invest Work for Your Retirement?

SoFi Invest is a relatively new robo-advisor, having entered the market in 2017. You get to choose from a broad range of portfolios. These mainly consist of ETFs and index funds, which contain high dividend stocks and strong, stable companies, therefore they are amongst the lowest-risk investments around.

What this means for you is that if a major company collapses, your investment is not going to become worthless from one day to the next.

What Can I Invest in with SoFi Automated Investing?

When compared to alternative automated investing platforms, like Betterment, you are limited in the different types of portfolio available.

As of this writing, SoFi offers 10 different portfolios with 13 different asset classes. There are five portfolios aimed at retirement accounts and five aimed at brokerage accounts.

Portfolios are mixed with major ETFs, such as iShares, Vanguard, and its own ETFs. This is why investment fees are among the lowest in the industry.

To make things easier for you, SoFi provides a comprehensive risk assessment of each portfolio. Even if you know nothing about investing in the markets, SoFi gives you a clear risk level for each portfolio.

Since you are investing for your retirement, it is recommended that you stick to more conservative investment portfolios.

How Much Does it Cost to Use SoFi Automated Investing?

Robo-advisors like SoFi and Stash have gained loyal followings because of their low fees. Rather than giving up 2-3% of your portfolio in fees to an investment manager, robo-advisor platforms offer minuscule fees.

SoFi does not charge you any fees for opening an investment account. They also do not charge you any monthly fees or inactivity fees. Their management fees always remain at 0.00%.

There are only three scenarios where you will pay any fees at all:

  • $75 account fee if you want to transfer your account to another platform.
  • $75 account fee to completely close the account.
  • Fees on trading some ETFs. These are charged by the ETFs, not SoFi.

In many ways, SoFi is the ultimate 21st-century approach to long-term investing. For newer traders, it is a better option than platforms like Mindful Trader, where starting capital must be higher.

How Much Do I Need to Invest With SoFi Invest?

There are no account minimums to start your retirement account. Simply deposit at least $1 to get started. This is a great deal because it allows you to try the platform for very little money before committing a bigger chunk of your savings.

If you are confused about any aspect of the program, account holders have free access to investment advice from a selection of certified financial advisors.

Just book your appointment at a convenient time and you will be able to speak to them about your holdings and where you should invest next.

Are these the Right Investments for Me?

Since you are using an automated investing service, you may be concerned about whether your money is going in the right places. Even if it is, markets change, and the best investment today is not necessarily the best investment tomorrow.

SoFi takes this into account through its quarterly automatic rebalancing program. This means that four times per year SoFi inspects its portfolios and rebalances its holdings for the benefit of investors.

If the market is trending in a certain direction, you are not going to miss out on those gains.

Who is SoFi Automated Investing Suitable For?

Trading the markets can be fun. However, your retirement account is designed to keep gaining in the decades ahead. It is not the time or the place to speculate or experiment.

SoFi is designed for the investor with little experience and little desire to learn about the markets. If you are the sort of person who wants to throw their spare money into a retirement account and manage it with no effort, this is the platform for you.

Is it the perfect platform?

No, there are other robo-advisors with more features (and higher fees), but SoFi is the perfect entry-level option for the new investor.

If you feel like you want to alter your approach to investing later, just pay the $75 fee and move to another platform.

It really is that easy!

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