In today's crazy world, we spend a lot of time looking for ways to get everything done quickly and with as little effort as possible. We'll cover that in this detailed Acorns report.
I would normally be very against it now.
That's because, as a species, I think we're getting too lazy for our own good.
But when it comes to investing money, I think it's probably a good idea to find ways to make the process pointless and automatic.
The good news is that an app called Acorns has spent an awful lot of time doing it.
If you've been looking for a hassle-free way to dip a toe into the wonderful, if dizzying, complex world of investing, this easy-to-use app is for you.
What it does is simplicity to the nth degree.
However, if you commit to using it daily, it can change your life.
What it does to round up all of your purchases to the nearest dollar.
And then it takes the difference between the purchase price and the summary and invests this money for you.
What is micro investment?
Acorns is a micro saving app like Digit.
The micro-investment approach is to round up all your purchases to the nearest dollar and invest the difference.
All of these pennies add up over time.
The best thing is that everything happens automatically with purchases that you would make anyway.
This is exponential growth, and it is equally important whether it is bacteria or bank accounts for which interest is charged.
Acorns would happen if you took a coin jar and welded it to a robo advisor (if robo advisors were actually robots).
Then these hypothetical automatons would invest this change for you.
Maybe someone can do a kickstarter who does just that!
A real game changer
If you follow the traditional path, it will take a lot of time and attention to set up a robust investment program.
Acorns circumvents all of this by offering you a digital tool that is infinitely easier to use than the way you have invested for hundreds of years.
And with this tool, Acorns is revolutionizing the way people invest.
It is a real game changer!
A gift from God for those who have trouble saving
If you've fought bravely in the past to save even small amounts of money but haven't been successful, acorns can be just what you need.
Keep in mind, however, that you are not the only one in the country who has this problem, as nearly 7 in 10 Americans save less than $ 1,000.
Because it's so incredibly easy to use, it has the potential to transform old, self-destructive habits from paycheck to paycheck into something that is much healthier for you financially.
Building an nest egg that secures your financial future could even become a cross-border obsession.
Build a nest egg
If you think the number of people depositing money into a savings account is small, the situation with retirement accounts is even worse.
That's because so many people blow up all the money that they should put aside for other things when they retire.
Retirement can take as long or even longer than your professional career. So you want to make sure you are properly preparing for it.
Unfortunately most people are not.
It's terrible, but it doesn't have to be that way!
Everyone needs to start as early as possible to save for retirement.
And Acorns makes it extremely easy to do that.
It's a great way for college students who don't have access to a 401 (k) to pocket money for retirement.
This way, they start saving early on.
Powerful combination of savings tools and robo advice
Remember that not only are you leaving this money in a bank account, you are also making your money work hard for you by investing it.
In this way, your investment portfolio grows by leaps and bounds at just a few cents a day until you are completely stunned by the amount you have accumulated.
Acorns accomplishes all of this by being both a robo-advisor service and allowing you to use powerful savings tools and turn savings into automatic activity.
Money is used, which is called "change" when we talk about old-fashioned money.
Essentially, the old practice is to use a piggy bank to save and update it for the digital age.
CNBC was so enthusiastic about the app that it called it the "new millennial investment strategy".
However, the app is not just for millennials, but for all of us who don't have bundles of money, just lying around to invest in the stock market.
Maybe you're asking yourself the question: "Is acorn worth it?"
In this article I will try to answer this question.
Read on and decide for yourself!
Perfect for even unsuspecting neophytes
If saving money has always been an incredibly tedious task for you, let Acorn remove confusing levels of complexity from the experience.
It is 100% passive investing. All you need is to set it up and go away.
And even while you sleep, the app's algorithms will work hard for you and secure the financial future you've always dreamed of.
Its effortless functionality is perfect for unsuspecting neophytes of all ages.
If you are a brand new investor just learning the ropes, you will find a lot to like here.
Not a complex jargon
And the app doesn't contain overly complicated jargon – everything is in plain English.
This is ideal for investors who lack knowledge, as every important concept of investment is defined with penetrating clarity.
The fact is that investing is so dizzyingly complex that many people avoid it altogether.
However, this app is great for removing complex layers from the process, making creating a killer portfolio a breeze.
The app does everything in its power to make your investment trip as easy and painless as possible.
Replaces financial willpower
It is a real stroke of luck for people who have every intention of going public.
But then you do the self-destructive practice of blowing up the money that you've reserved for investing in frivolous nonessentials.
If you've always wanted to invest in stocks but didn't have the financial will, try Acorns.
So if you have a hard time getting the investing ball rolling, this can be a way to boost your efforts.
No minimum balance
No minimum credit is required, so it's fantastic for small potato investors who don't have a lot of money to mess around with.
This further nullifies any excuse you have not to start your investment journey.
A note for serious investors
If you are a serious investor with a lot of money that you absolutely want to invest, you may still want to use Acorns.
Just don't make it your primary market strategy as more robust portfolio management is available from more traditional brokers.
Acorns offers six different asset classes that are appropriately diversified.
However, hundreds more can be found if you work with a more traditional investment firm like Fidelity or Wells Fargo.
Acorns offers less diversification between asset types and no possibility to adjust outside of the five profiles.
You also don't get access to financial support from an actual person with acorns.
In contrast, some larger robo consultants offer Certified Financial Planners (CFPs) to answer any of your questions.
No harvest of tax losses
If you mainly invest in a taxable account, which is the basic level of Acorns, you will not benefit from the benefits of harvesting tax losses.
Today almost every automated securities service offers a version of it.
Tax loss harvesting is used by many to offset losses in the securities market.
If we suffer a loss, we can write it off in our tax return.
Not only can we write it off, we can also try to sell it and use the proceeds to buy something new to include in our portfolio.
Since Acorns does not allow us to make decisions about individual securities, we cannot make any tax losses with the app.
If this is important to you, you need to try to use a more traditional investment service.
Acorns can complement your larger investment efforts
Even if you use Roundup investments to complement major investment efforts, $ 50 a month adds up to $ 22,671.93 at 6% market return at the end of 20 years.
That is the power of compound growth that you can achieve with an investment but not with a savings account.
And even a robotic consultant service like Acorns lets you experience the exhilarating power of compound growth.
Five dollars is all you need to get started
Acorns is an app that allows you to experience all the joys of investing without having to go around with insane piles of money.
With just $ 5.00, you can build a diversified portfolio of ETFs to help you build a solid financial future.
The app or its web-based application – make your choice
Download the app if you'd rather use your smartphone to manage your ever-growing Acorns portfolio.
If you are more using a web-based application, bookmark the website.
You can choose one or both – it's up to you.
Not for the risk averse
Investing is not for the faint of heart.
And when you use Acorns, you're investing in the securities market.
Although your return will likely be substantial if you keep your investment account running for twenty years or more, there are no guarantees.
How much you earn with Acorns Invest depends entirely on the fluctuations in the market that can be wild and unpredictable.
While the S&P 500 has achieved a constant annual return of around 8%, varying the amounts means that your accounts can lose a large part of their value for a given year.
And sometimes these losses can exceed 10% or more.
So if you don't have to invest a lot and are risk averse, put your money in a high-yield savings account instead.
This way, interest is guaranteed and unlike acorns, most of them have no monthly fees.
Plan to keep your money parked
If you think you will need this money in the next five years, you should use a high yield savings account instead.
You want your money to be parked directly in your account so that you can use its power to grow exponentially.
Some online banks offer free checking accounts with automatic savings, and those savings are not invested.
So you can withdraw money without taking out the money your investment starts with.
How it works
Creating an Acorns account is currently only available to US citizens. You must be at least 18 years old.
To get started, you need to log in to either the app or the website.
Then link your checking account, debit card or credit card.
To get even more miles from all of your purchases, consider using a credit card to get cashback.
Then you have to decide how money should be deposited into your Acorns account.
You can set it up so that a certain amount is only deducted from a bank account at regular intervals, as I do.
This type of recurring investment is a kind of approach to setting and forgetting your investment activity.
However, instead of preparing a delicious stew in your slow cooker, you are creating a brighter financial future.
What could be better than that?
As already mentioned, you can also let the app collect all of your “virtual change” by rounding up your purchases to the nearest dollar.
This is certainly better than a stranger who messes up your sofa by removing the pillows and checking for loose pennies, dimes, and nickel.
You can also combine the two methods.
For example, I recently spent $ 58.16 on PriceRite, a supermarket near me.
Acorns increased this amount to $ 59.00 and increased my roundup account by $ 0.45.
When the amount in this account reaches $ 5.00, this money is automatically transferred to my investment account.
These automatic summaries make investing surprisingly easy and most investors will be amazed at how quickly their pennies accumulate.
Once there, your money will be invested in a professionally managed fund portfolio that represents thousands of individual securities.
You can also increase your investment by multiplying your rounds by a factor of two, three or even ten.
The potential for increasing your investment activity is enormous.
You can choose what type of purchases to include in your summaries, or you can choose Automatic. These are applied to every purchase you make.
Or choose summaries manually by going through your purchases in the app.
Then decide which of your summaries should be transferred to your investment account.
If you think roundups are small potatoes and you want to make big lump sums, you can do so – even deposits of $ 10,000, $ 20,000, or $ 30,000 are possible if you have that much money lying around.
Acorns gets its fees by withdrawing them from your source of finance instead of taking them from the money you've invested.
If you invest little money with Acorns, fees can make up a relatively high percentage of your investment.
A few dollars a month may not sound like much.
If you are a small investor, these few dollars can be considerable if you compare how much you have in your investment account.
And then your acorn fees could be exorbitant – much more than you would pay for similar services.
This could offset potential profits from your account.
Suppose you had 30 roundup transactions a month with an average roundup of 35 cents.
The Acorns app would invest $ 10.50 for you every thirty days, but would consume 9.5% of the fees.
Of course, the higher your account value, the lower this percentage.
However, they would have to accumulate $ 5,000 before the amounts charged by Acorns are as low as the cheapest of the robo advisors.
For example, Betterment has a percentage instead of a flat fee and only 0.25%.
To make it worthwhile, you should invest larger amounts with Acorns.
What you don't want to do is keep your account small by not contributing regularly.
The smaller your account balance, the higher your monthly fees will be in relation to your money.
ETF transfer fees
If you decide to close your Acorns account and transfer your ETFs to another broker, you will be charged $ 50.00 for each ETF.
As for online investment services, this is a little positive.
A flat fee per fund is extremely rare among robo advisors as most require a percentage of the assets under management.
The "hidden" fee
Every single cent that you put into your investment account does not flow into its growth.
There is also a "hidden" fee, which represents the internal cost of managing your fund and, over time, corresponds to approximately 0.10% of your investment.
Create your profile
If you know a thing or two about investing, you can put together your own portfolio.
However, if you don't know much about the often Byzantine subtleties of the world, Acorns can compile one for you.
If you choose the second option, you have to answer a few questions.
These are things like your age, your investment goals, your risk tolerance and your employment status.
Your answers will help Acorns offer you tailor-made investment advice.
To complete the creation of your Acorns account, you will also need your email address, online banking login, physical address, social security number and some other things.
Acorns takes all of this information and starts building a killer portfolio so you can achieve your investment goals.
Acorns uses the so-called Modern Portfolio Theory (MPT), which was developed by Dr. Harry Markowitz was formulated.
This theory says that you minimize your risk by diversifying the types of financial assets that you have, rather than just one type.
This maximizes possible returns.
If Acorns gives you individual advice, you will also receive some ideas, tips and tricks that you can use to support your investment journey.
Note that you cannot invest in individual stocks and bonds with Acorns – only in ETFs.
By the way, what the hell are ETFs?
An ETF or exchange-traded fund combines the best of stocks and index funds into one great package.
Like index funds, they are a basket of stocks and bonds in a particular market segment.
For example, an EFT for house building could consist of a number of shares in the house building industry.
Like shares, they can be bought or sold at any time during the trading day – which is not possible with index funds.
And just like stocks, their price can fluctuate significantly throughout the day.
But like index funds, most ETFs are managed passively and are inexpensive.
A good thing about ETFs is that you don't have to be rich to buy and trade, and they are easy to buy and sell.
This combination of the best properties of index funds and stocks is responsible for the rapid popularity of EFTs as an investment vehicle.
In 2018, there were a total of 6,748 ETFs with $ 6.18 trillion in assets under management.
What is your investment style?
There are five types of portfolios to choose from:
Conservative moderately conservative moderately moderately aggressive aggressive
So pick one and just click "Confirm Portfolio" when you're ready.
That's all about it!
How much of each fund you invest depends on your profile.
For example, if your profile is "aggressive", 100% of your money will be invested in equity ETFs.
If your profile is "conservative", only 20% are in stocks, the rest in bonds.
The different asset classes
Acorns selects securities from seven different asset classes, each represented by a single ETF.
With just these seven EFTs, your money is invested in literally thousands of individual securities.
These are the different asset classes:
Large corporate stocks Small corporate stocks Emerging markets Developed markets Government bonds Corporate bonds Real estate
You have only seven asset classes to choose from.
Some people who have used other investment services may feel restricted by what Acorns has to offer.
This is because with many others, you can spread your asset allocation across over 10 different classes.
When it comes to investing, with Acorns you can be as aggressive as you want.
So if you're brave, you can increase your risk and put more money in stocks instead of bonds.
Keep in mind, however, that regardless of your level of risk, Acorns manages an impressive $ 1 billion so they know exactly what they're doing.
One thing that you don't have to pay for, however, is the automatic realignment of your investment accounts.
This means that the app will bring funds that have deviated from your goal assignment back to where they should be.
This will help keep your account up to date.
Each investor profile assigns money in its own way to achieve the desired risk.
In this way, if your fund has a good month and contains additional money, it will be switched to another account so that you have not tied up too much in this sector after the rally.
This limits the risk of losing those profits.
If the risk changes that you want to take, you can choose a new profile.
No withdrawal fees
There are no fees for withdrawing funds. However, this can take 3-6 working days.
This is because the SEC sets a waiting period of two days after a security is dissolved.
Sometimes Acorns also waits for five days to ensure that your account does not contain any fraudulent activity.
To get money out of acorns, just log in and go to the "Present" tab.
Then click "Invest for Your Future", click on "Withdraw" in the top right corner and enter the amount you wish to withdraw.
It must be in increments of $ 5.00. If you want more than 95% of the total amount, you have to withdraw everything.
There is also something called "found" money, which is cash they send you as a reward for shopping with one of their many corporate partners.
As a rule, this amount is one to two percent of the purchase price.
In most cases, you will get the money back automatically without an additional step.
You simply use a linked card to complete the purchase and the rewards will be deposited into your account within 60 to 90 days.
The day I decided to review these offers, I saw one at Sprint. When you add a service line, you get $ 25.
There was another one at Instacart that deposited $ 50 into your account after you became one of the buyers and made your first delivery.
With Acorns, you can also set up an IRA with only your small change.
You can decide what type of IRA you would like to have, whether it is a Roth, traditional or SEP IRA.
And just like the other accounts, the minimum amount to set up an IRA is just $ 5.00.
This makes Acorns Later an attractive option for a retirement account.
This is especially true because there are many financial institutions that have minimum IRA balances that are even higher than their taxable accounts.
The fee for managing this account is one dollar a month until your account value reaches $ 1,000,000.
And once that amount is reached, your fee increases to 0.25% per year for every million you've invested.
That's $ 100 for each of your millions.
There are also acorn issues.
This is a checking account that comes with a free Visa debit card made from durable tungsten steel.
And no minimum credit requirements, no overdraft fees and unlimited use of ATMs across the country.
Unfortunately, your account does not earn interest.
Acorn gift cards
You can also give Acorns gift cards as a gift.
How it works: You choose your gift amount and your recipient will automatically deposit this amount into their own Acorns account.
In this way, you too can start your own stress-free investment journey.
You can buy Acorns gift cards at participating stores or online.
There is also the Acorns financial blog called "Grow".
You can access it either from the app or from the Acorns website.
If you want to strengthen your trust, the teaching material on the website will help you learn the basics of investing.
Here you can read informative articles about investments, savings and other things you may want to know.
This can cause your acorns to have a richer and more meaningful experience.
With all the articles you can access, you can refine your investment knowledge and develop from a struggling newbie to an accomplished investor.
You can also learn about exciting developments in the rapidly changing world of stock markets and what you can expect from them in the coming week.
You can also find frequently asked questions about Acorns if you have any questions.
The cost of subscriptions
Each of their three subscriptions – Acorns Invest, Acorns Later IRA, and Acorns Spend with checking account and debit card – costs $ 1.00 a month.
There are no transactions or withdrawal fees.
The three categories
The app is divided into three different categories: "past", "present" and "potential".
The "Past" tab shows your "Investing" account activity, including the total investment amount and total profit / loss.
It also shows a lot of what you've withdrawn, pending withdrawals, your money found, recommendations, and total dividends earned.
The "Present" tab shows you the current value of your investment account.
And if you decide you need to make changes to your recurring deposits or summaries, you can do so here.
If you have "Later" and "Spend" accounts, you can view their value on this tab.
In addition, you can access the "Grow" area of the app or website and find out about the "Found Money" options that you can use.
"Potential" gives you a little glimpse into your future by showing you the forecast value of your account based on your current investments.
Feel free to tinker with your recurring withdrawals and summaries to get a more stable financial outlook.
How safe are acorns?
SIPC (Securities Investors Protection Corporation) insures Acorns investments up to $ 500,000, including up to $ 250,000 for cash in your checking account.
Of course, this does not include any market losses. This is a risk that you implicitly agree to when buying securities.
So Acorns is about as secure as most other companies that offer investment accounts.
I hope this article has helped you answer the question, "Is acorn worth it?"
With its incredibly user-friendly app, Acorns is trying to demystify the amazing arcane world of investing.
The process is fun and incredibly easy.
Then you can start reaping the benefits by putting away your loose change to have a better financial future.
It only takes a few cents a day to build a robust portfolio that will offer you tremendous future benefits.
If you have a burning desire to invest but loathe how tedious learning can be, Acorns is the app for you.
Acorns makes it extremely easy for the average investor to take advantage of the financial and psychological benefits of an investment.
Financially because you are creating a better financial future.
Psychologically, because it gives you more peace of mind.
And in these uncertain times, the value of it is incalculable.
If you want to invest a little painlessly, Acorns may be the perfect app for you.
Acorns is great for rookie investors, hands-off investors, those bravely struggling to save, or those who don't trust when it comes to investing in an often wildly unpredictable stock market.
If any of these points describes you, download the app today and use your spare change to create a successful future for yourself.
If you don't have a lot of money to invest in the stock market, you can easily dive in with Acorns.
So stop hesitating – download the app today and build a more secure financial future!
If you'd like to add something to this Acorns review, let us know in the comments below.