What does it mean to invest your money with Rize?
Investing is the act of paying a certain amount of money to a certain company, person, or idea with the hopes that this certain company, person, or idea will become lucrative and turn a profit far greater than the initial payment.
Think of it this way: you’re giving someone $5 to buy a pound of lemons for their lemonade sale. By investing $5, you hope that that they’ll make enough money selling lemonade that your initial spend will be rewarded multiple times over. Think: you get $20 in a few years, just for investing $5 now. You get a piece of the whole profit. This same logic is applied to investing.
Here at Rize, we do things a bit differently from traditional investing. Instead of picking stocks based on your favorite soda, car, or sneakers, we've designed a smart solution to invest in the things your really care about - your goals. While traditional investing starts with your risk tolerance, research shows we, as people, aren't all that great at judging our risk tolerance. Instead, we divide your money across stocks, bonds, and cash based on the timeline of your goal (short-term or long-term).
Here's an example:
Let's say you're planning for a big event a few years away, like a wedding. You have an idea of when you're going to need that money, and you don't want to risk a big loss.
Goals like this are a great opportunity to take advantage of the market, without taking an enormous risk. In your goal you can see most of your savings are held in cash (earning 2.15% APY) and the rest is divided amount stocks and bonds. When it comes time to order your cake or pay the band, you'll be able to sell your ETFs and withdraw your cash. The idea is that while you had some money in the market your investments earned a profit -- and now you have a little more to spend on your special day.
What if you're saving for something more longterm, like retirement?
Rize can help with that too! For longterm goals (we're talking 10 or 12+ years away) you have more time to wait out any major market changes, so most of your money will be held in stocks and bonds.
Here what it might looks like:
Notice in this case, you have over 30 years to reach this goal. That's why your money is mostly stocks, then bonds, but no cash. As you get closer to your goal, we help you rebalance. That means the closer you are to retirement, the more money we'll move over to cash from stocks (and bonds) to help you avoid unnecessary risk.
So what stocks and bonds do we offer?
Through Rize, you buy ETFs (Exchange-Traded Funds), a fraction of a whole stock. To keep things simple, we offer Vanguard Total World Stock (VT) and Vanguard Total Bond Market (BND). These might not sound as fun as self-driving cars, but when it comes to your goals (your wedding money or your retirement fund) we're not here to play games.
Instead of constantly needing to check on individual stock and bond performance, our ETFs allow you to invest more passively to spend time thinking about more fun things - like planning that exotic get-away.
We do all of this based on the time horizons YOU set! This way, no investment goal is too far out of reach or a dangerous risk.
Well, what about my emergency fund?
When you're truly in a pinch, you need your money accessible. That's why recommend keep a cash goal for emergencies, upcoming bills, or anything else you might need money for quickly. Remember, investing takes time. All transfers in and out of investment goals take 5-7 business days to process. Cash goal withdrawals only take a couple of days to hit your bank account.