Gmail users may have been confused when they opened their email accounts and saw pop-ups about Gemini. Instead of Google sending out big “coming soon” announcements about their next-gen flagship artificial intelligence (AI) model, Gmail users just saw a subtle star in the right-hand corner of their screens. With Gemini, ChatGPT and China’s DeepSeek, along with plenty of other programs, it’s clear that AI is sticking around for the long haul. So is it worth newbie investors investing in AI, and how is this possible to do anyway?
African-American Investors Are Getting Younger
A new report from Financial Industry Regulatory Authority’s (FINRA) confirmed that African-Americans tend to be much younger than white investors, with 49% of African-American investors between the ages of 18-34 while 51% of white investors were ages 55 and older. Growing up in a tech-dominant age, African-American investors are using social media to get their investment education and to learn about trading risky investments (ex. cryptocurrency) and meme stocks (publicly traded stocks that became popular after increased interest on social media, such as GameStop). Nearly half (47%) of African-American investors (and 38% of Hispanic investors) are relatively new to the market, with less than two years of investment experience. Meanwhile, the majority of Asian-American/Pacific Islander and white investors have been participating in the market for 10 years or more.
Because investing was not as common in African-American and Hispanic communities for these newbies — primarily due to lack of funds, historical policies limiting these opportunities, immigration status — a great deal of information has been self-learned. In 2015, 20% of African-Americans invested in non-retirement accounts. In 2016, that number rose to 26%. In 2021, 29% of African-Americans had non-retirement investment portfolios. And while a younger group is enthusiastic about investing, they’re not letting lack of wealth stop them. More than half (59%) of African-American non-retirement portfolios have less than $50,000 while 25% have $50,000 to $250,000.
And they’re not doing it for sport either. Almost all (95%) are investing to make money in the long-term while 91% of African-American investors are doing so to make money in the short-term. More than half (66%) are also investing to be socially responsible and support companies that match their values.
Best Non-Retirement Portfolio Apps For Beginners
When a new hire starts a job, a flood of paperwork comes at them to sign, including handouts about the benefits of 401(k) plans, individual retirement accounts (IRAs), stock options, bond options and other money management considerations. While this may be exciting to some employees, it can be overwhelming to those who aren’t familiar with how everything works. And for entrepreneurs who don’t have a Human Resources department to go to, trying to start a portfolio simultaneously can be even more nerve-wracking. This is one of many reasons that user-friendly money management and investing apps help. While they’re easy to navigate for expert investors, some of these apps are intuitive for novice users too. A few popular names include Fidelity, which also has free how-to videos and free hour-long webinars each week, Acorns and Vanguard.
4 Ways To Invest In AI
While AI feels reachable on workplace software, it’s not always clear how investing in AI platforms work. President Donald Trump’s adviser Elon Musk, the owner of X, even got into a recent X debate related to Stargate (a joint venture from OpenAI, Softbank and Oracle). And while Musk declared SoftBank CEO Masayoshi Son, OpenAI’s Sam Altman and Oracle’s Larry Ellison don’t “have any money,” beginner investors may have been left wondering how anybody invested to begin with.
Invest in companies that already use AI. For new investors who aren’t quite sold on the idea of investing in the actual AI technology, buy fractional shares (meaning choose a stock or exchange-traded fund, ETF, and select the dollar amount to contribute) in companies that already do use AI. (Fractional shares can be as small as $1 up to the listed share price.) Although the stock market doesn’t allow fractional share purchases, multiple brokerage firms do, including Fidelity, Firstrade, Schwab, Etrade, Webull and Wells Fargo. The more comfortable that a new investor becomes with investing fractional shares, that may eventually turn into investing more funds into that stock to eventually own a full share. Keep in mind that a full share price may change, which is one reason why investors may choose to take advantage before the share can skyrocket. However, just as a share price goes up, supply and demand can cause it to go down again too.
Invest early with AngelList startups that use AI. New investors who’d rather invest in AI-centric companies in the early stages can see which ones are listed on AngelList. (AngelList is a website where more than 85,000 startup companies are looking to raise funds.) Those funds can be with angel investors, wealthy people who want to invest in small businesses in exchange for ownership equity. Wellfound, formerly known as AngelList Talent, is also an opportunity for job seekers to find work with startups and for owners to find employees and contractors. AngelList also vets new deals to confirm whether the companies are legitimate.
Participate in crowdfunding ventures for companies that use AI. Investing in any startup can be risky, but every company once upon a time was a startup. Additional companies that use AI may be found on Crowdcube, which is a startup for European companies, and SeedInvest. The latter company is now migrating all accounts into StartEngine, where potential investors can peruse startups looking for investors. Minimum investments can be as low as $350 or in the high thousands, but there is no guarantee that any of these companies will be profitable. However, with Regulation Crowdfunding (created in 2012 as part of the JOBS Act), non-accredited investors with an annual income or net worth less than $124,000 are limited to invest a maximum of 5% of the greater of those two amounts.
Join real estate investment companies that use AI. Investing in real estate is more than just buying a condo unit or flipping a house. Realtors and Transaction Coordinators have also learned the perks of using AI software to make the vetting and purchasing process much easier. For investors who are interested in the real estate market, AI is easy to access for virtual tours, market trends, property values, lead generation and sending follow-up emails to prospective tenants. Reach out to organizations such as the National Association of REALTORS or look into getting a real estate license. AI apps have become very common for some real estate firms.
Upsides And Downsides Of Investing In AI
Any time something is new and evolving, it’s risky. As anybody involved in the stock market will say, it can be a risky business. That doesn’t mean that an investment can’t be profitable, but it does mean that investing is not for the faint of heart. For investors who would rather try something safer, 40% of Gen Z and 47% of Millennials have a savings account just for emergencies. That’s even more than the 32% of Gen X and 38% of Baby Boomers. IRAs and 401(k)s allow safer investing. Same goes for certificate of deposits. If investing in AI creates more nervous energy than excitement, consider doing a little of both. This way, if the investment doesn’t work out, all of that money isn’t gone for good. It’s never a bad idea to have a backup plan.
