Robo-Advisors 101

Investing your hard-earned cash in the stock market can be a great way to see your money grow over time. But traditional wealth management services, like investment advisors, can be expensive. They also often require a minimum investment that’s, well, out of reach for most of us. Enter robo-advisors.

Robo-advisors are online platforms that give you automated financial and investing services with very little human interaction. The decisions made by the robo-advisors—and what they advise you to do—are driven by complex algorithms.

Most robo-advisors have you take a survey about your financial situation and your investment goals, then use that information to offer you advice and automatic investment options. Good robo-advisors have easy account setup, various portfolios for you to choose from, and low costs.

Is robo-investing right for you? Maybe so. If you’re looking to start investing, but don’t have much to invest yet, a robo-advisor might be the right choice. Investing $100 or even $50 a month can really add up over time. Robo-advisors also make it easier to understand where your money is going if you’re not very stock market-savvy. A good robo-advisor will offer you portfolios based on your priorities. For instance, some robo-advisors offer portfolios that focus on climate action, others on fair labor, and still more on internet startups.

You might be new to investing, but a robo-advisor can help you learn. As a bonus: you can let your money grow while you learn.