Isn't wealth management targeted at older people? I won't be retiring for another 40 years.
Time is your friend when investing. The sooner you get started the better, since the longer you are invested, the more likely you are to reach your goals. The markets will have times when they perform well, and times that they perform poorly. This can work for you by using a strategy called dollar cost averaging, which we employ at SoFi Wealth. It involves investing the same amount on a monthly basis. You buy more shares when investments are down and fewer when they are up. This strategy does not guarantee you’ll make money, but it takes advantage of the ups and downs of the market, so you usually end up with a lower average purchase price than if you invest all at once. While this is happening, your dividends and interest will be reinvested. The sooner you start, the longer your money is working for you.
With dollar cost averaging, is that done automatically through algorithms? For example, if I'm depositing $1000 every month to invest, how are the funds allocated monthly? Do they go into the same securities purchased previously or to new ones with better outlook?
Haysam - When funds are deposited to a Wealth account, they are allocated to the funds already purchased. We aim to keep your account as close to the target portfolio as possible. Whenever new cash comes into your account, either a deposit or a distribution from one of the ETFs, we apply those funds to the assets in the portfolio so that it remains matched with the the target allocation. More broadly, if we decide that a target portfolio should hold a different mix of funds, we'll reallocate you, and everyone else, to that new mix.
Tim - If you wait until you are old to plan for retirement, you won't retire!