Thursday, September 8, 2016

Acorns-Invest Your Spare Change

Acorns-Invest Your Spare Change

Back in March, I came across a new investing app for Android and iOS called Acorns. At first I was skeptical about investing apps but after using it for more than six months, I can say that I am very pleased with Acorns and I've saved over $300 that probably would have gone unnoticed and spent on junk. Acorns operates on the premise that it invests your spare change. Most people have a spare change bucket or something similar in their home. When they come home, they throw their spare change from their transactions throughout the day in this spare change bucket and after a while, it adds up and you can spend it how you please. Acorns is similar, instead of investing the physical spare change, it invests the spare change from your credit card transactions. In order to this, when you sign up for Acorns, you set up a round up account within the Acorns. This round up account is where you link a debit or credit card to Acorns. Any time you make a transaction with that round up account, say your Chase Visa card and the total comes out to $3.30. Acorns sees that you made that transaction with the card and rounds up the purchase to $4.00. Now since Acorns doesn’t actually have access to your credit cards accounts besides the transactions, they can’t charge your card the extra $0.70. So it rounds it up and the round up account total would be $0.70 and when the total in the round up section of Acorns gets up to $5.00 it will withdraw it from your checking account that you will link during set up. Many might be worried about privacy but they use bank level encryption to keep your information safe and are SIPC insured. Acorns also has a feature in beta called “Found Money,” which is basically a rewards program for shopping at certain partners that Acorns partners with. As of September, these brands were, JackThreads, Dollar Shave Club,, HotelTonight and Blue Apron. Rewards vary depending on where you shop and you must shop using a card that is linked to an Acorns round up account. Now investing can carry loss over time but this is a good way for people to get started who don’t know where to start and don’t know how to pick investments. Well Acorns invests it in ETF’s. You choose your risk tolerance and Acorns will allocate your investment appropriately in the five ETF’s mentioned below. The ETF’s Acorns invests in are LQD which are corporate bonds, VOO (Large Cap companies ), VB(Small Cap companies), VWO which is emerging markets and SHY which is composed of government bonds. Now Acorns has a $1 fee per month but is waived for accounts that have an .edu extension on their email when signing up or that fee is 0.25% when the account reaches $5,000. Now Acorns is great for the investor who is just starting out and who may or may not know how to pick their own investments.  Make sure you support the Almighty Dollar by using our referral code when signup up for Acorns:


·         Simplicity

·         Low starting capital

·         Diversified


·         Fee is a little high

·         Can’t pick your own investments

·         Only taxable accounts, so if you sell any of your holdings, you will incur capital gains taxes