How do you start saving for retirement on a limited budget? For some the concept of investing money to build a more financially secure future is second nature, a habit that seems to be built into their DNA. For many others it seems like a foreign language, or something that is reserved for those who might be found lounging pool side by their summer home three months out of the year. With a margarita. No, a dry martini. And a small dog. No wait, a wolf. Sorry. Anyway, saving for retirement, a college fund or the adventure of a lifetime is a habit anyone can learn and the Acorns app makes it easy and accessible for everyone.
Who or What is Acorns?
To put it simply, Acorns is investment for the people! A quick trip to the Acorns about us section gives some insight into who they are…
“Jeffrey Cruttenden co-founded Acorns to simplify investing and connect it to everyday life. In college, he noticed that most of his classmates that had an interest in investing couldn’t come up with a lump sum to meet minimum balance requirements.”
And…
“Walter Cruttenden is a financial markets innovator. He founded and served as CEO of Cruttenden Roth, now Roth Capital Partners. Walter also founded and served as CEO of E*Offering, the investment banking arm of ETrade. E*Offering became the number one provider of online IPO’s before its sale to Wit Capital and ultimately to Schwab. Walter co-founded Acorns and serves as its CEO.”
To learn more about their awesome team of designers, engineers, managers, and cool people who will be working to make your spare change work for you visit this page.
Oh and then there is that whole bit about the Nobel Laureate Dr. Harry Markowitz, a.k.a. “father of the modern portfolio theory” being on the board and the advisor “who helped create the five investment portfolio choices.” (Huffington Post).
Modern start up with a design based philosophy, a dream team, and a world renowned economist on board…check, check and check.
Acorns is a secure financial service that was designed to help people invest more easily with no account minimums or commissions. They offer a personalized investment portfolio and fractional investing. The bottom line is that this is a service that will enable someone on a very limited budget to start investing and saving for retirement now. Have you started looking into investing only to have your curiosity and drive crushed by seeing minimum investment requirements that surpass what you could save in six months,a year, or longer? That reality is exactly the driving force behind the Acorns app.
What is the Acorns App?
The Acorns app is a free download for your smartphone and a web application is coming soon. The app is available through Itunes and Google Play. It is currently available for iOS 7 or 8 and will run with any Android device running 4.1 and higher.
- Download the free app
- Set up your account with your online banking login information, checking account and routing number (secure and Acorn does not store your bank login info on their servers)
- They do not withdraw money from your bank account that you have not approved you are in control of your money
- Begin investing with as little as 5$ wracked up in spare change round ups
- Complete your account information to set up your individualized investment portfolio
- You can withdraw your money from Acorns at any time without penalty and opt for a less aggressive portfolio than recommended
- The app allows you to be proactive with your investing, any time, anywhere.
How much is using the Acorns app and financial services going to cost me? This is my favorite part. There are no minimums on your account. And they will never charge the modest 1$ per month fee on 0$ balance. The 1$ per month fee is for accounts up to $5k and fees are only .25% per year for balances for accounts over $5k. You can go play with the slider to check out what the fees would look like up to a balance of a million here:
How secure is the Acorns app and service?
The app and site are secured with a 256-bit encryption. This is good. For those who want the full on tech-ish explanation this is a time when the wiki may help…
http://en.wikipedia.org/wiki/Advanced_Encryption_Standard
The accounts are SIPC Insured up to S500,000 for fraud. If you want to learn more about that check these out…
http://www.schwabmoneywise.com/public/moneywise/money_basics/account_types/fdic_insurance.html
How Does the Acorns App Use Your Spare Change to Invest?
There are three different options to use your Acorns app.
- You can deposit or withdraw lump sums
- Set up automatic deposits for scheduled investing (like you would for a vacation or Christmas club account at your bank)
- Round ups (investing spare change by rounding up)
The round ups option is one of the coolest aspects of the service so let’s spend some time on that.
You can link your round ups to one account or multiple accounts (debit, credit, Paypal- your spending accounts). Your round up amounts are the spare change left over on a purchase. So say you buy lunch at the cost of $13.23 after taxes and you drop a $4 tip for a total of $17.23 on your debit card transaction. The amount to equal a round $18 (which is $0.77) could go towards your Acorns account to be put towards your investment portfolio. You can do this manually or have your settings set to automatic round ups for convenience.
Let’s face it. This is a fun and interesting way for everyone to invest and build a savings for retirement or any other savings goal that strikes a chord with you. You can choose to invest more or less at any time. Rather than paying cash, throwing money in a jar and cashing it in you are putting small amounts of money to work for you. This adds up over time and can help those who do not have enough investment capital to approach other options get there. Suddenly that moment when you are trying to stop that gas pump at exactly $25.00 and it rolls over to $25. 07 becomes more exciting doesn’t it?
To learn more about how Acorns optimizes diversified portfolios based on your own risk level visit Acorns’ Investments page.
What Are People Saying About Using Acorns App?
“Investing is complicated. Acorn is not.” - Business Insider
This App Makes Investing As Easy As Swiping Your Debit Card
For a good article and visual overview of the kinds of questions and choices you will make when going through the process of setting up your account check out this review from Carrie Smith posted to investorjunkie.com:
Acorns App Review – Using Your Spare Change to Invest
“Young people may not have enough assets to meet the minimum requirements of big financial houses like Fidelity, Vanguard, and Schwab. With Acorns, there are no minimums.” - Dan Kadlec, Time
This App May Let You Retire on Your Spare Change
For your further reading enjoyment...
Build an investment portfolio, one dime at a time - CNBC
Acorn App Gives You a Way to Finally Invest Your Spare Change - Mashable
Acorns Is A Micro-Investment App That Does All The Thinking For You - Techcrunch
The overall goal of the Acorns app project is to get people investing small amounts over long periods of time. It isn’t a get rich quick plan, but it is certainly a fresh approach that will allow more people to take the step towards financial growth. If you are currently using the app tell us your story.
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Written by Jon the Saver
