Do you have trouble saving money in the equities markets? Do you think that investing is for those with more money than you? A while back I wrote a post on this neat app called Acorns. It is an easy way to invest small amounts in the equities markets through a robo advisor at a minimal cost. In case you missed my first post I will give you an overview and an update on my own account.
First you need to download the app from your application store and install it on your phone. Here are the basics of how it works. You link your bank account to the app along with your major credit cards. Then as you spend money from any linked account the app will round the purchase or transaction up to the next whole dollar amount. Here are some examples of how it works. If you spent $4.50 on your credit card at a store the app will round up your purchase $0.50 to $5.00. Or if you say write a check for $50.00 it will round that up $1.00. Then once all of your round ups total at least $5.00 the application will invest in your equities according to your risk tolerance.
When you set up the app you will be asked for some basic information and some personal information such as your Social Security number for tax purposes. This is when you will also answer a few questions that will determine your risk tolerance. Then the app will invest the amounts rounded up in exchange traded funds that are low cost and act similar to stocks that price throughout the day. The more conservative you are the more your portfolio will be in bonds. Just as the more aggressive you are the more of your portfolio will be in equities.
Now this is the part that I was not sure on and they were not exactly clear on when I set up my account. All of the round ups will come from your bank account once the $5.00 is hit or at the level you have established to have your investments made. And for accounts under $5,000 there is a monthly fee of $1.00 and for accounts over that it is 0.25% a year. And since the investments are made according to your risk tolerance all rebalancing fees and commissions are paid for from your paid fees. And that includes dividends that are reinvested as they are earned.
I first learned of the app on the local news back in mid-January and by late January I had enrolled in the app and was starting to invest with Acorns. Now you can pick to just invest round-ups or you can also invest directly from your bank account either on a recurring basis or a one-time deposit. I have purposely not done any deposits other than the round-ups at $5.00 investing intervals. I am investing in the aggressive portfolio and have deposited right at $243 and have an unrealized gain of 9.10% for an account balance of just over $265. Not too bad of a way to invest some without even having to think about it or even at a level where you miss the funds being withdrawn from your bank account.
And as a bonus perk you can text your friends and family a link to the Acorns app and receive a $5.00 bonus when they sign up using the link. It is an easy way for you to start investing for your future and get others involved as well. And in the process you are able to add a little extra to your account balance which never hurts.
If you have any questions or need any assistance I would be more than happy to help you. And if you want to replay the kindness send me an email with your mobile number and I will send you the link to the app and your kindness will add to my account balance. It is never too early to save for retirement or any reason and this is as easy a way as I have ever seen.
