Investment Management. What is it?

Investment Management refers to the buying and selling of investments within a portfolio. It can also include banking, budgeting, and taxes, but the term usually means portfolio management and the trading of securities to achieve specific goals.

How can you use investment management to grow your money?

There are a few methods. Each one suits different types of investors.

Determine the method(s) that seems the most approachable to you first. (That’s our recommendation.) Then choose from the companies or platforms that provide that particular investment management service. We explain the different methods and providers of each service below.

investment management: Four ways to do it

  • Investment apps The modern and more cost-effective approach to personal investing, which can be a little or a lot more self-directed, depending on which service you choose.
  • Traditional investing sites Similar to investment apps, on traditional sites you make self-directed or guided investments at a higher price (in most cases). These are the “old school” companies that pioneered online trading and have cornered the market for the past few decades. They provide more complex investment options, like short-selling.
  • A personal advisor at a broker dealer Generally, a “registered representative” who you talk to over the phone or email. Your rep explains what stocks and bonds are, and recommends how much to allocate your portfolio to each. However, you make the ultimate decision.
  • Private wealth management companies provide a more white glove-service geared toward wealthy clients to meet short, medium, or long term goals. With PWM you can invest in private companies, purchase bonds, CDOs, and just about anything. Your portfolio is self-directed, non-discretionary (the opposite), or a combination of both. Of course, this is the most expensive option.

All of these are time-tested, secure, and trusted ways to invest money and achieve your long or short-term financial goals.

What should your goals be? If this is your first time learning about investment management, basic, you’ve-probably-heard-it advice for everyone is:

  • Have an emergency fund with 3 or ideally more months of income in cash in case you need it. You don’t want to be forced to sell when the market is down – you’ll realize losses – every time in history that the market has gone down, it’s eventually recouped its losses and moved higher
  • Invest for the longer-term to save for big purchases and retirement
  • Pay it down if you have any debt
  • Continue to grow both your emergency fund and investment portfolio with a little – or a lot – on a regular basis

Once you have an emergency fund, investment management using one or a combination of the options above is better than only holding cash. Usually, you should only invest an amount that you can keep invested for a long time. Small investments using investment apps like iBillionaire make investing very accessible and affordable. Even if you don’t have a ton of money, consider trading that coffee for a $5 investment. Do it once a week, choosing different investments so that you don’t put all of your eggs in one basket. Over time, it will add up! Compound returns are a mathematical wonder it would be wise to take advantage of.

Now let’s dive deeper into each method, and learn about the companies that offer each service.




Investing apps use technology to offer almost all of the above options (except Private Wealth Management) at lower prices. Here is a list of some of the most widely used investment apps: iBillionaire, Acorns, Betterment, Robinhood, & Stash.

Pros of Investment Apps:

  • Lower costs than standard brokerage firms: Costs range from ¢99 per trade to free trades with a monthly maintenance fee of usually $1. Often times once you invest a certain amount ($3-5k) the monthly fee is changed to an annual percentage fee. This fee typically ranges from 0.25%- 1%
  • Control over your portfolio: Many investment apps aim to replace the traditional trading sites, like ETrade, by making it cheaper and easier. Because more people are doing their own investing research and executing trades, investment apps are increasing in popularity.
  • Or not: Other investment apps provide one or a handful of portfolio types to choose from, take the reins, and manage your portfolio for you.
  • Accessible to everyone & simple to invest: Many investment apps offer low investment minimums like $5. They do this by purchasing fractions of shares. Since you don’t have to buy the entire share anymore, you can invest in more companies, stocks, ETFs, or strategies, with much less money. This levels the playing field and makes investing accessible to many more people. With fractional shares it may also be easier to diversify your portfolio, which is considered prudent.

 Cons of Investment Apps

  •  Guidance: While some like the freedom of choosing for themselves, others prefer a trained professional to make the decisions for them. Some of the apps listed above offer guided portfolios, or make all of the decisions for you. Others let you take control. “Guidance” is not necessarily a con, but make sure you know which service you’re choosing before you hand over your money. Make sure you choose the service that’s best for you, and the growth of your investments.
  • High fees for larger accounts: As mentioned above companies like Stash charge a fee of one dollar per month for balances under $5,000—this would be $12 a year fee. But for a balance of $50,000, with a fee of 0.25% annually, that adds up to $125. Depending on how many trades you plan on making per year, this option is either cheaper or more expensive than a site like E-Trade, which charge per-trade. Just grab your calculator:
  •  (How much money you want in your account) X (Yearly fee, like 0.0025 or 0.25%) = How much you’d pay with a service fee
  • (How much the other site charges per trade) X (How many trades – buys or sells – you make or plan to make in a year)

Which is higher? Is the service offered worth that much more in comparison?

A note: Keep in mind that depending on your investments, there may be additional costs. Individual stocks won’t, but ETFs or strategies with a management fee have their own fees. They’re not much. And in many cases, they are the best and cheapest option! In fact, every service listed above offers them for exactly that reason. Just be aware of how much you’re paying. Don’t get taken by surprise. But also, don’t assume you’re being ripped off. There’s no way to avoid these fees other than simply not buying ETFs or anything else with a management fee or other fees.

  • Lack of advanced tools: Most if not all of these investment apps are “start-ups” without the huge budgets of traditional services. They’re focused on offering users a cheaper option. Once they scale, expect more advanced options, but for now, investment apps often lack certain features that experienced investors may have come to expect: selling securities short, options trading, bond trading, etc.


Traditional investing/trading websites and financial advisors: Traditional websites (like E-Trade) and financial advisors at traditional broker dealers (like Schwab), allow customers a variety of options, from individual stock and bond trading, to options trading and short positions. They also offer guidance building your portfolio, tailored to the specific needs of the account holder and accounts overseen by a professional money manager. These old school sites typically charge a fee per trade (ranging from $3-$10) if you do it online (more if you call or email) and a percentage for guided portfolios (usually 0.3%-1%). A few of the industry leaders for this market are TD Ameritrade, E-Trade, Charles Schwab, Ally, Edward Jones, & Vanguard.

Pros of traditional investing sites:

  • Investor guidance: Tools and access to help from live financial professionals
  • Breadth of services: From stocks to bonds, ETFs to IRAs, checking accounts, and sometimes mortgage loans, these sites have a broad range of services, although they may be clunky to navigate, and require you to talk to separate divisions for each.
  • Analysis tools: Typically, in comparison to investing apps, these services provide more detailed analytical tools and exhaustive research.

Cons of traditional investing sites:

  • Cost: These sites tend to be much more costly than newer investment apps, a principal reason why the apps are gaining in popularity. Additionally with these companies, “advisor assisted trades” often cost significantly more than one done individually up to $50 amongst some companies. Whether charging per executed trade or a higher fee for manage accounts, the old school comes with higher costs.
  • Minimums: Though it is not true for every company, more often than with investing apps these companies require a higher minimum to fund your account.
  • Lack of transparency: These larger companies often have large executive salaries and marketing budgets. These of course are paid for by you the customer, and often times little or no detail is given as to how much the costs are. If you’re using a financial advisor – how have the portfolios of their other clients fared under their guidance? Depending on the answer, this service might not be worth the cost.
  • Private wealth management: Bank of America, Goldman Sachs, J.P. Morgan, Morgan Stanley, & UBS are among the most distinguished target the portfolios of high net worth individuals who usually have a minimum of $1 million in liquid assets to invest. Most private wealth management firms are fee-based. They charge their clients a percentage of the assets under management, which is generally preferred by customers over a commission due less conflicts of interest compared to traditional commission-based advisers.



Pros of private wealth management:

  • Access to detailed research: Wealth advisors at firms of this size usually perform extensive market research, and they have Bloomberg Terminals right in front of them, providing them, and if you want it – you – with the most sophisticated and up-to-date market information. Additionally, as “expert investors” they generally have access to private research & reports that standard investors do not. These firms also employ analysts who are dedicated to analyzing companies and markets, and they may be able to answer questions and give you advice too.
  • One on one service: Managers at this capacity typically forge strong personal relations with their clients. This is positive in that the investor can turn to their manager with questions or ideas.

Cons of private wealth management:

  • Cost: Each company charges a different amount, but expect to pay thousands per year for this service.
  • Company products: Representatives for large private wealth management often times promote investment products and new services that come from their own company. This can leave gaps in valuable investment opportunities.

If you’re choosing between investment management apps, here are some things to consider.


Pros of iBillionaire (us!):

  • Fractional Shares: Instead of having to buy an entire share of a company, we allow you to pick smaller amounts to spread across different strategies. This is a plus as some companies cost upwards of $1,000 per share.
  • Low Minimums: You can begin investing with as little as $5
  • Returns: Many of our strategies posted relatively attractive returns in 2017, and in the last year ending June 30, 2018. However, past returns may not indicate future performance.
  • Billionaire insights: While it takes billions of dollars to actually invest like a billionaire, we offer a collection of strategies based on the top holdings of a variety of billionaires.
  • Cheaper versions of ETFs: Often times we take large ETFs and filter them down to a concentrated version of the largest holdings. Along with our billionaire strategies, we offer myriad other curated options like: Tech, Space, eCommerce, Energy, Ethical Investing, & much more. This allows us to offer themed strategies without the normal management fees.
  • Ease of use: Seamless interface that can be used for trading and research on both the app and website.
  • Auto-invest: Platforms available to automatically invest on weekly/monthly basis into any portfolio of your choice.
  • Cryptocurrency ETFs: Invest in the leading blockchain driven cryptocurrencies, Bitcoin & Ethereum with our available indexes.

Cons of iBillionaire:

  • Limited selection of company stocks: While we offer numerous strategies and some individual stocks, we are still working on our ability to sell any stock to our customers. Write us an email if there’s a company in particular you’d like to see us make available.
  • Wait time:  Currently one of the main complaints we hear from customers is the turnaround time from both creating an account and adding funds to it. Stay tuned, next week we should see major improvements in this area.


Pros of Robinhood:

  • $0 Commission: Compared to large brokerage firms that charge $4-7 per trade or investing apps that charge a maintenance fee, the service is free.
  • Ease of use: Purchase securities with the just a few clicks.
  • No minimums: All you need to begin investing is enough capital to buy one share of whichever company you wish.
  • Free options trading: New as of 2018, customers can purchase options amongst their other stock and ETF options.
  • Cryptocurrency Trading: They offer cryptocurrency trading of Bitcoin and Ethereum in 17 U.S. states.

Cons of Robinhood:

  • No web availability: Your account can only be accessed through the app, not website.
  • Limited securities: While Robinhood offers stocks and ETFs available on the NYSE and Nasdaq they have no offerings of mutual funds, bonds or retirement tools like IRA’s
  • No investment assistance: Robinhood offers little help to new investors despite being made for the new generation. Outside of a few daily articles, there is no assistance in diversifying one’s portfolio like options offered by iBillionaire and Stash.
  • Lack in research and analysis: Some offerings for financial news, but not as much information offered by larger traditional broker dealers.


Pros of Stash:

  • Investment guidance: For beginners who want a lot of hand-holding, Stash’s blog, questions to determine risk tolerance and goals, and suggestions of ETFs that fit each customer’s needs are helpful.
  • Thematic strategies: Stash selects theme investment strategies for you to choose from. However, check if the strategies are re-dressed ETFs first. ETFs charge their own fees on top of Stash’s fees.
  • Low account minimum: Account funding at just $5
  • Retirement Options: IRAs for a fee of $2 a month, but that fee is waived for customers under the age of 25
  • Custodial accounts: Accounts controlled by an adult for a minor under the age of 18. Useful if you are a parent, guardian or someone who wants to keep a portfolio to later be gifted to a child once they come of age.
  • Fractional Shares: As with iBillionaire, Stash offers investments in stocks for as little as $5, regardless of the full share price

Cons of Stash:

  • Costly for small accounts: Because Stash encourages Micro Investments, their monthly maintenance fee of $1 can represent a large percentage of one’s portfolio value.
  • ETF expenses: The ETFs available through Stash have an average expense ratio — the annual fee charged to investors — of 0.34%. That’s on top of $1 per month.
  • Limited quantity of stocks: While stash, like iBillionaire offers a plethora of curated investment portfolios, they lack a wide selection of individual stocks. While currently only offering 65, it leaves more to be desired if you’re looking to purchase shares in a specific company.


Pros of Acorns:

  •  Automatic savings: Acorns automatically invests money from a linked bank account by “rounding up” purchases to the nearest dollar and spreads it across your portfolio.
  • Found Money®: Found money is cool. It’s a cash-back feature. It takes a percentage of your purchases from a given company and invests it into your account.
  • College student Promotion: Acorns is free to university students with a .edu email for the first four years of use.
  • Acorns Later: A diversified IRA investment service at the price of $2/month.
  • Educational content: Acorns is a good fit for new investors in search of a platform that can both assist in investing and educate about a variety of financial terms and options.

Cons of Acorns:

  • Management fee: While paying $1/month seems very little, Acorns targets investors with smaller portfolios. Therefore a customer that has $100 in their account is paying 12% annually in fees.
  • Limited portfolio options: Unlike iBillionaire or Stash that offer individual stocks and a variety of portfolios, Acorns only offers 5 investment options ranging from conservative to aggressive.


Betterment Quick Facts:

  • Two types of accounts: “Digital” which charges 0.25% annually and has no minimum balance. “Premiumcharges 0.40% for a more enhanced service offering in-depth advice for products outside of betterment and access to their team of CFPs.
  • Tiers of free management: $15,000-$99,999: 1 month free; $100,000-$249,000: 6 months free; $250,000 + 1 year free

Pros of Betterment:

  • No investment decisions: A pro only for people who don’t want to decide what they invest in. Your account will be divided into one of 5 categories: Retirement, retirement income, safety net, general investing, major purchase. Within these categories, portfolios differ in asset allocation, based on customer’s risk tolerance. If you want someone to make all the decisions and just invest all of your funds for you, that’s Betterment.
  • Retirement services: Like Acorns & Stash, Betterment offers options to allocate money into IRAs (with no additional fees)
  • SmartDeposit: It’s an advanced form of auto deposit into your Betterment account. With SmartDeposit you set a number, say $3,000, that you want always in your connected checking account. Anytime your account has money in excess of that floor, Betterment automatically invests it.
  • Sync external accounts: Betterment offers a feature to sync your other investment accounts

 Cons of Betterment:

  • No choices: Given the service that Betterment provides, one of five set portfolios, the app is not geared toward investors who want to buy Apple stock, or have a say over how their money is invested. The only thing you can choose is your stock/bond asset allocation.
  • Disparity in service: For access to wider ranging investment options beyond their products you must have a minimum balance of $100,000.


Choose what’s right for you and start some form or combination of investment management today. Having all of your savings in cash, or your house, is generally not considered a wise choice because cash doesn’t grow, and can actually depreciate in value because of inflation (remember how your grandfather told you a coke used to cost $0.05?). Long-term investing can grow your bottom line and help you prepare for retirement.