Investing in the stock market can be overwhelming, and saving money can be difficult. But don't freight! I want to introduce you to a iOS, Android, and web app called Acorns that's specifically designed for beginners. There are many layers to the app so let's cover them here:
Acorns links to your credit or debit account and saves your spare change. For example, when you purchase a coffee for $3.75 using your debit card, Acorns rounds up to the nearest dollar, ($4) and the $0.25 cents spare change noted in Acorns system as a Round-Up.
The $3.75 comes out of your checking account as usual, and Acorns tracks the transactions and logs the $0.25 left over . Once you've reached at least $5 in round ups, Acorns will draw the $5 from your account and add it to your Acorns savings account.
On average, Acorns users invest about $30 a month through Round-Ups.
You can withdraw your money at any time, but please note that it may take 3 to 6 business days for the money to appear in your linked checking account.
Have you heard enough already? Sign up here: https://share.acorns.com/qsburgess?advocate.partner_share_id=6320195385001523647
The round ups that are in your Acorns account, are invested into the market.
The idea here is micro-investing and the concept is that over time your contributions will add up. It’s a good strategy for newbies who want to dip their toe into the investing pool before diving all in.
Funds are invested in ETFs (Exchange Traded Funds).
The ETFs are selected for you by Acorns after you complete a survey about your financial goals, investing timeline and risk tolerance. Factors like your age, income and net worth are all taken into account when creating your portfolio. ETFs in your Acorns portfolio could include ones like the Vanguard S&P 500 ETF, which mirrors the popular S&P500 stock index, or iShares Core U.S. Aggregate Bond ETF which provides broad exposure to U.S. investment-grade bonds.
Investors, however, cannot currently buy or sell individual stocks through Acorns
What types of returns should you expect?
Well, that depends on the stocks you choose to invest in, of course. However, one way to estimate overall stock performance is to look at average returns for the S&P 500, an index of 500 major U.S. stocks that's considered an indicator of how the market is performing overall.
Acorns offers two membership tiers:
- Personal plan for $3 per month that includes a checking account, investment account and retirement account.
- Family plan for $5 per month that includes the three accounts you get with the Personal plan, plus additional investment accounts for your children.
Incentives to Share
Acorns is consistently offering incentives to share their app with your friends and help them get started saving and investing. Offers range from $200 to $1000.