For the month of September, we want to highlight some of our favorite FinTech tools that help us in both our personal finances and investing.
Later on this month, we will be attending FinCon. FinCon is the largest conference for financial bloggers and writers. With the conference dates drawing near, we thought it would be fitting to share the tools that help us get ahead!
The first tool up in the series is Acorns!
Do you struggle to save enough money to actually start investing?
This post is for you.
We recognize that investing is a luxury that is difficult to partake in if money is tight. Many people dream about investing. Unfortunately, they never have enough spare cash available. Or, when they finally save enough, they get scared of losing it.
Do you know anyone who often tells about how they make $10 here and $20 there in investments? It’s really not hard and you don’t have to have a huge amount of money to start investing.
What if you were able to invest spare change? Literally.
Acorns is a mobile application that let’s you do just that. It is called micro investing.
How does it work?
Financial technologies are growing extremely fast nowadays. New ideas and tools are being deployed so quickly that you might miss a great opportunity to get in the investing game.
Acorns is a mobile application that opens the door of micro investing for you. Already over 1 million people use it!
You invest every time you make a purchase. It’s really that easy! All you need to do is register, connect your accounts and cards you normally use and spend your money as usual.
Each purchase you make get rounded up to the nearest dollar. Acorns automatically invests your spare change and you can watch your money grow in the Acorns investment account.
The nice part about the tool is that you have options on how the money is invested and how often it is taken from your account. You can also boost your account at any time by adding as little as $5 and you even get bonus by referring friends.
Is it safe?
Yes, all your data is safe and encrypted. It is never stored on your devices.
Additionally, every account is insured up to $500,000 by SIPC. This is awesome because investment accounts typically do not come with any insurance. Normal bank accounts are only FDIC insured up to $100,000. Great job Acorns!
If any suspicious activity is detected on your account you will be contacted. Servers are secure and privacy is verified by a physical security. There are also automatic logout in place, ID verification and authentication.
What is the money invested in?
If you are worried about losing your money, here is few facts to put your mind at ease. First, the user gets to select the type of account they would like to invest the money in. There are a number of options that range from low-risk and conservative to higher risk and aggressive growth.
The actual investment process is automated by a team of engineers, mathematicians, economists who monitor and construct your investments. Every dollar that you invest is spread across 7,000 stocks to maximise your return and minimise risks. Talk about diversification!
Benefits of using Acorns
Firstly, you can use it everywhere and at any time because they also have a cool app that lets you check your account balance and see how your money is growing. Because the investments are pooled, the fees are less expensive than using discount brokers.
Acorns fee is as little as $1 per month and you can link as many credit cards as you want to. You should note that the $1 is transferred from your bank account monthly and not deducted from your investments. There is no limit to how much you can withdraw or invest. Total freedom and access is what we love here at LLP.
Literally everyone can use it and invest, even if it’s just few cents a day. There is no minimum to open an account and Acorns doesn’t charge commission. It is easier than saving money.
You can automatically save and invest with every purchase. You would be surprised at how quickly the small change that you would normally ignore can quickly add up.
Finally, the portfolio is easy to understand. You can also read their magazine that can quickly grow your money knowledge and skills.
The one change we would make
Remember how we said that you can set up a regular daily, weekly, or monthly investment schedule. Well, whether or not this is a benefit is up to your personal money management style.
When we signed up, we thought the money would be rounded-up and debited from our account with every transaction.
Basically, we thought it would go something like this:
Make a purchase for $4.85
Swipe credit card
Card is charged for $5.
$4.85 goes to merchant
$0.15 goes to Acorns
So forth and so on.
In reality, it goes something more like this:
Make purchase for $4.85 at lunch ($0.15 potential roll-up)
Make purchase for $5.15 at dinner ($0.85 potential roll-up).
…continue happily swiping your card for days/weeks on end (approximately 25 days using this example).
WHAMO! Get random charge for $25 from Acorns!?!!?
In their defense, it takes some time to rack up $25 potential roll-up dollars using just spare change.
But that was the point…
We would like a multitude of small transactions so we don’t recognize the savings as it’s happening in real-time. That’s what makes it awesome. When you get hit with a one-time lump sum, it kind of defeats the point, even when it’s only $25.
Again, that is our full disclosure, unbiased rant opinion about the one downside of Acorns.
We were able to change the settings so that the round-up amount is debited from the account in $5 increments. That doesn’t hurt so bad.
Other than that, we are raving fans.
Acorns, can you pretty please change your algorithm to allow the money to transfer at each transaction? That would really make the savings effortless.
All in all, we love Acorns and have been using it since about January 2016. To date we have about $190 in the account. Score!
Don’t waste such an opportunity and use this FinTech and let it work for you. Visit Acorns to sign up for an account today.