Acorns Investment Review

Share

Screen Shot 2017-07-10 at 10.40.43 PMWith credit and debit cards dominating the way we do financial transactions, we rarely consider what it would be actually like to carry around loose change. Acorns, a spare-change investment app, is trying to bring back the archaic practice of hoarding those left-over pennies by turning them into a basic investment strategy. The app rounds up your daily purchases to the nearest dollar and takes that extra change and pours it into an algorithm-managed investment portfolio.

Acorns isn’t ideal for aspiring high-rollers, it’s just a way to bring in some extra cash. Acorns has a utilitarian approach to pricing. Subscribers pay $1 a month until their balance reaches $5,000, after that, they only pay 0.25% of their balance a year, so $125, which is considerably more than the initial fee. College students are allowed to use the service for free for four years.

Connected to your credit and debit cards, Acorns collects small amounts of change on everything you buy, so that you don’t have to worry about squirreling away too much money or overdraft fees. Acorns tries to automate the savings process as much as possible, and lets you build a nest egg without having to keep tabs on your stocks. However, the app gives you the option to manually transfer specific purchases or just sweep away every last bit of change automatically. You can also deposit separate funds or schedule reoccurring withdrawals from your savings or checking accounts for as little as $5 a pop.

Even in momentary lapses when your investments plateau, Acorns has other incentives to keep you an active subscriber. The app has partnered with big name start-ups and brands to earn you extra dough on your regular purchases. With Airbnb, up to 1.8 percent of the booking subtotal will be deposited into your Acorns account, and if you’re a host who rents out their home for at least $75 a night, the app will throw $50 into your account after your first night of hosting. When you sign up for a Blue Apron account, Acorns will deposit $30 into your account. Buying a Casper bed gives you an additional $50 investment, and JackThreads will invest 10 percent of each item of clothing you buy back into your Acorns account. Jet.com, Warby Parker, Hulu, Hotel Tonight, Dollar Shave Club, and Boxed have similar rewards programs.

Acorns is geared towards younger investors who are just navigating the market for the first time, and don’t want to make any risky investment decisions. By the same token, Acorns isn’t suitable for people who are trying to build a retirement account, as all investments are taxed. IRA and 401(k) accounts grow without the burden of taxes, and are more beneficial for those who are winding down their careers. That’s why it’s important for Acorn investors to take into consideration the potential tax impact the app could have on their finances come April 15. Unlike other artificial intelligence-portfolio managers, Acorns doesn’t help with tax-loss assistance, which help balance the gains and the losses.

Read more of our informative articles:

Join our newsletter

Screen_shot_2017-04-25_at_1.05.57_pm

Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit
About the author

Leave a Reply

This blog is kept spam free by WP-SpamFree.

Join our newsletter

Subscribe to get the latest "Engineer Your Finances" content via email.

Powered by ConvertKit

ModestMoney.com Top Finance Blogs

Archives

SSCP   CAS-002   9L0-066   350-050   642-999   220-801   74-678   642-732   400-051   ICGB   c2010-652   70-413   101-400   220-902   350-080   210-260   70-246   1Z0-144   3002   AWS-SYSOPS   70-347   PEGACPBA71V1   220-901   70-534   LX0-104   070-461   HP0-S42   1Z0-061   000-105   70-486   70-177   N10-006   500-260   640-692   70-980   CISM   VCP550   70-532   200-101   000-080   PR000041   2V0-621   70-411   352-001   70-480   70-461   ICBB   000-089   70-410   350-029   1Z0-060   2V0-620   210-065   70-463   70-483   CRISC   MB6-703   1z0-808   220-802   ITILFND   1Z0-804   LX0-103   MB2-704   210-060   101   200-310   640-911   200-120   EX300   300-209   1Z0-803   350-001   400-201   9L0-012   70-488   JN0-102   640-916   70-270   100-101   MB5-705   JK0-022   350-060   300-320   1z0-434   350-018   400-101   350-030   000-106   ADM-201   300-135   300-208   EX200   PMP   NSE4   1Z0-051   c2010-657   C_TFIN52_66   300-115   70-417   9A0-385   70-243   300-075   70-487   NS0-157   MB2-707   70-533   CAP   OG0-093   M70-101   300-070   102-400   JN0-360   SY0-401   000-017   300-206   CCA-500   70-412   2V0-621D   70-178   810-403   70-462   OG0-091   1V0-601   200-355   000-104   700-501   70-346   CISSP   300-101   1Y0-201   200-125  , 200-125  , 100-105  , 100-105  , 1Z0-803  , 400-051   EX300  , CISM   100-105  , 000-106   400-201   642-732   220-902   70-410  , MB6-703   810-403   70-243  , CAS-002  , AWS-SYSOPS   70-462   70-410   2V0-621   LX0-103   70-461  , 220-902   1Z0-144   70-178   70-270   350-080  , 1Y0-201   1z0-808  , NSE4   102-400  , ADM-201   SSCP  , 200-125  , 640-911   000-104   640-692   300-320   350-060   000-089  , 000-017   1z0-808   700-501   1Z0-051  , 70-177   M70-101   300-209   70-461   3002   N10-006   VCP550   70-487   300-320  , 3002   700-501   NS0-157  , 1V0-601   CAS-002