How To Invest Your Spare Change With Acorns
No.. Not those type of acorns. Im talking about the investment app.
What is acorns? Acorns is a micro investing app that invests your spare change into a prearranged stock portfolio. It is the perfect opportunity to learn about investing and to start building for the future.
How Does It Work?
Acorns is what is called a robo investment platform where every dollar you invest is automatically diversified into over 7,000 stocks and bonds to help improve your return while reducing risk. The app encourages you to invest what you can, for example, setting a budget of $5 a week. That money then goes into building your investment portfolio. The portfolios they offer range from “conservative” which is safer but with slower rewards to “aggressive” which is a bit riskier but has greater rewards long term.
Aside from what you deposit yourself Acorns automatically invests spare change from every transaction you make. It does this by monitoring your bank account or credit cards and rounding up daily transactions. For example, if you buy a soda for $1.99, Acorns will round up to $2.00 and will automatically invest $.01. Similarly if you make a transaction for $3.50 Acorns will round up to $4.00 and invest $0.50.
What Is Found Money?
Acorns has another nifty feature where they have partnered with many online retailers who will deposit a percentage of every sale you make on their website into your Acorns investment account. All you need you to do is head over to the found money section of the app.
In the example above, Nike has invested 5% of your purchase into your Acorns account. Other brands who have joined the program include Walmart and Sephora. Acorns also offers a chrome extension that you can download to earn while you shop online.
PS: If you are interested in only getting paid to shop I recommend my other article on that Here.
What Are The Risks
Acorns charges a fixed $1 per month but this could be waived if you are a student with a .edu email address. Even with the monthly fee I recommend attempting to invest a minimum of $25 per month and before you know it the fee won’t even matter. You will be making more than what you are paying. The stock market generally trends upwards in the long term and Acorns minimizes your risks by having heavy weighted ETFs in their portfolio. So no matter what portfolio you choose you are never overly exposed to a single stock or industry.
What do you think about this review? Let me know in the comments.