Investing for Beginners with Acorns

H_Acorns.jpg

Acorns makes it simple for beginners to invest in the stock market.

The app rounds up your purchases to the nearest dollar and invests your money into a diversified investment portfolio of ETFs.

Acorns became super popular because it lets you invest money for your future without really noticing.

Who Is Acorns For? 

It is for people who want to invest in the stock market but don't know how and don't have much money. 

Acorns takes all the guesswork out of investing and lets you invest up to $1.00 at a time which anyone should be able to afford for their future. It takes 5 minutes to make an account and then everything is automatic so you don't need to spend time managing a portfolio.

Common reasons people use Acorns are:

  • They have trouble saving money or budgeting

  • They want to invest but don't know how

  • They want to invest but don't have time

  • They want to invest or save money but don't have money to do so

Acorns was created mainly for two types of people:

1. People Who Struggle Saving Money

A system that saves your money automatically, a little bit at a time, is the easiest option to start growing your wealth.

2. Newbie Investors

Acorns requires 0 knowledge of finance and investing to start, so it’s ideal for newbie investors who want to invest their money, but don’t know how to do it, or where.

It doesn’t require a large time investment either. Once you sign up and choose your settings, you live your life like normal and Acorns runs automatically. To sign up you just fill out a form which takes under 5 minutes.

How Does Acorns Work? 

Acorns.png

On Acorns you link your debit/credit card to the app and they automatically "Round Up" every purchase to the nearest dollar. For example, if you buy a t-shirt for $14.50, Acorns will round it up to $15.00 and transfer $0.50 to your balance.

You can customize everything, like how much you "Round Up" and you can choose if you want to invest the money or place it in a savings account. The power of Acorns will start to add up over time. 

Investing Info 

Acorns has an experienced team of finance experts that teach people the right way to invest. The investment strategies were designed by a Nobel Prize-winning economist – Dr. Harry Markowitz.

ETFs

The money that gets invested goes to exchange traded funds — ETFs for short. ETFs consist of different Stocks, Bonds and Real Estate which make them a diversified investment and have very low fees compared to individual stocks.

Investment Strategies

On Acorns you have five investment strategies you can choose from:

  • Conservative: 18% stock, 80% bond, 2% real estate

  • Moderately conservative: 36% stock, 60% bond, 4% real estate

  • Moderate: 54% stock, 40% bond, 6% real estate

  • Moderately aggressive: 72% stock, 20% bond, 8% real estate

  • Aggressive: 90% stock, 0% bond, 10% real estate 

The exact content of your investment can be seen through the prospectuses of your ETFs in the app. 

Pros of Using Acorns

  • Builds your wealth with almost no time commitment

  • It's automatic so you won't be tempted to spend that money elsewhere

  • No minimum investment required

  • Cashback on purchases from many popular stores

  • Educational content available in the app

  • Easy for beginner investors

Cons of Using Acorns

  • Not available in every country

  • Acorns charges $1-$3/month unless you're a student

  • This won't get you rich quick

FAQ 

Does the app charge fees? 

Yes. There are monthly fees based on the size of your account. Additionally, Acorns Core costs $1 per month, Acorns Later Is 2$ per month and Acorns Spend is $3 per month. These fees go from a flat fee to a percentage fee once you’ve hit some investing marks. 

Note: The app is free to use for every college student.

How much can I profit from the app? 

There are so many variables to take into consideration, but Acorns offers a “Potential” feature in their app. This feature shows you how much your account will be worth in a certain time in the future.

Is there a high investment risk? 

As with any investment, there is always a risk. The market fluctuates daily and is at times unpredictable, so you might note a drop in your investment profits or sometimes even end up with a loss. Everything depends on which strategies you select in the app and how the market is performing.

Is my information safe with the app? 

Yes. Acorns has multiple safety measures to protect your information. Besides the regular passwords, the app will log you out automatically after a longer period of inactivity

How do I sign up?

You can sign up on Acorns here in under 5 minutes.