With the rise of apps that allow pooling money with friends to invest, more people are exploring this option. Investing with friends provides benefits like capital pooling and shared research, but also requires good communication and clear rules. When reviewing invest apps, key factors are security, transparency, tools, and costs. This article provides tips on how to invest successfully with friends using apps, including setting expectations, choosing the right platforms, and maintaining open communication.
Clarify investment goals and rules with friends before starting
Before pooling funds to invest, have an open discussion with friends about your shared goals, risk tolerance, time horizon, and exit strategy. Agree on investment guidelines like requiring majority approval for purchases or sales. Define who can add or withdraw funds and when. Set regular meetings to review performance. Apps like Chime, Albert and Joy provide useful tools to manage goals and track shared investments.
Select invest apps that offer security, transparency and analysis tools
Look for invest apps that use bank-level security to protect accounts. Check they provide transparency into past returns, holdings, fees and taxes. Useful analysis tools include projections, risk profiling, and custom alerts. Top-rated apps for friends investing together include Betterment, Ellevest, Wealthfront, M1 Finance, and Fundrise. Read customer reviews to get a sense of the user experience.
Maintain open communication and engagement with investing friends
Set up a group chat to discuss investment ideas and decisions frequently. Keep friends updated on any deposits or withdrawals made. Review performance as a team. Celebrate successes together. If conflicts arise, focus on shared goals. Rotate administrative tasks like record-keeping. Stay engaged to maximize the benefits of pooling capital and insights.
With sensible rules, robust apps, and good communication, friends can invest together successfully. The collective capital, diverse views and shared research can potentially lead to better returns than investing alone.