Investing can be overwhelming, stressful, and downright confusing. There are so many platforms to choose from ( RobinHood, TD Ameritrade, Fidelity, etc.). Where do you even begin?
Well, recently I have been bombarded by instagram ads with this investment app called Acorns.
It’s an app that has modernized the old school strategy of saving your loose change in an investment portfolio. It’s FREE for college students and under 24 however, it is $1 a month for a taxable account for everyone above 24.
How does it work?
If I go to Starbucks and buy a cup of coffee for $2.75 on my debit card, the Acorns app will “round up” my purchase to $3.00, thus taking $0.25 out of my account and storing it into an investment portfolio. Using Acorns, you can even elect to boost your “spare change” amount by as many as 10 times. So instead of investing $0.25, you can invest as much as $2.50 for that single transaction.
This approach is a great way to mindlessly save more – especially for those who are terrible at saving their money!
You can also invest lump sums manually (let’s say, $100) or recurring deposits on a daily, weekly, or monthly basis.
How you can earn “Fund Money” (Free money)
How this works: Every time you use your Acorns-linked debit or credit card at the select retailers below, that retailer will invest a portion of money into your Acorns investing account!
Pretty sweet deal!
Here’s a list of the current Fund Money participants and the amount they’ll contribute (As of 2018):
Start Investing Now
The earlier you can start investing, the more compound interest has to work in your favor.
Acorns invests your money into a portfolio that consists of low-cost iShares and Vanguard ETFs funds that cover five to seven asset classes (real estate, large-cap stocks, small-cap stocks, emerging markets, and corporate and government bonds).
Okay, so you are probably wondering… “What’s the catch? This sounds too good to be true…”
Management Fees: long-term, a $1 a month fee may sound cheap, but this can be a high percentage for investors with small accounts. For example, having $100 in your account will cost you $12 a year, which means you could lose 12% of your portfolio.
For context, Acorns competitors charge 0.25%; but these other “robo-advisers” have higher account requirements. (see comparison below)
Is Acorns a good match for you?
If you want to make the most out of your spare change and get “free invested money” from popular retailers, there’s really no better starting point. You will be surprised how quickly your pennies can accumulate. The risk? By having a small balance, Acorns fees can cut into or wipe away your returns. Do your research and start investing in your future!
Make Today Count.