When it comes to investing, one of the most common complaints that people have with it is that it usually takes a lot of money before you can start investing.
This is one of the main reasons why a lot of people don’t invest or why they put off investing. They feel they need to save some money first before they can begin.
But some companies want to change that. They want investment to be accessible to everyone, especially to people who don’t have a lot of money to invest.
One such company is Acorns, which is an app that provides people with an opportunity to start investing, even if they have little money.
Another good thing about this app is that it provides you with an opportunity to earn some money to add to the money you can use for investing.
The amount of money you can make, though, won’t be that high, as this is really more of an investment opportunity than a money-making one.
As for what your return on investment will be, it’s really hard to tell since that will depend on a lot of factors. But is this app really a legit investment opportunity or just a scam?
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Acorns App is a Legit Investment Opportunity
Acorns is an investment app that provides people, particularly those who don’t have a lot of money, with a way to start investing without the need to break the bank.
It has a system that will round up the loose change of your spending and use it for your investment. The app is also a good way to start investing for people who are new to it or don’t have a lot of knowledge about it.
The beauty of Acorns is that it also provides an opportunity to earn some money to add to the investment money.
From what I’ve seen so far, I can say that Acorns is a legit investment app that offers people with little money a means to start investing.
There are no hidden fees or charges that you need to worry about when you start investing with this app. The company also does provide an opportunity for you to earn and increase your investment money.
Despite being a legit investment opportunity that doesn’t have hidden charges, there are still some issues with the app, particularly with the management fee they charge.
The investment options that Acorns provide is also limited, which means you don’t really have much choice when it comes to where you want to put your money.
I’ll discuss these issues in more detail as we progress further in this review.
Who Uses the Acorns App?
The Acorns app is designed for two types of people with one being those who are looking for investment opportunities but don’t really have the big funds to start a regular investment.
The other typesare people who are new to the investing world and would need some guidance first when they start to finally invest.
If you are someone who doesn’t have a lot of money but wants to start investing, then the app has you covered with that.
With Acorns, you won’t need thousands or even hundreds of dollars to start investing, as you will only need $5 in your account to start.
The app also has an option for you to earn money and add to your investment money. If you are someone who is new to investing, then the app can also help you there.
It has a lot of educational content about investing that can guide you. The app also uses simple words and language when it comes to investing, making it easier for you to understand what they are talking about.
Registering is a simple and easy process and can be done through their website or the app. In the next section, I’ll discuss in more detail the registration and investing process of Acorns.
How Does the Acorns App Works?
Acorns is an investment app that is designed to help people with little money or little knowledge and experienced about investing to begin their investing journey.
The beauty of this app is that it also offers an opportunity for you to earn some money to add to your investment fund.
To begin, you need to create an account with Acorns first, which is simple to do. The first step is to provide your email and password and click on the box that states you are a U.S. resident and at least 18 years old.
After that, you will need to choose your Round-Up Account. This is basically the bank account that you will monitor and see which transaction you would want the app to round up and then invest the change generated.
After selecting your bank, you will be required to log in to your bank and choose the account you want for the round-up. You can choose more than one account.
Next is to link your Checking account. This account is where you will get the money from whenever the app rounds up a transaction made from your Round Up account.
The next step will be to complete your personal details, including your name, date of birth, address, and phone number. You will also be asked several questions, which is a standard requirement by the SEC.
Once done, the next thing you need to do is to choose your reasons for investing and to input your social security number. Now, Acorns has five portfolios that you can choose from when you start investing.
The portfolios are Conservative, Moderately Conservative, Moderate, Moderately Aggressive, and Aggressive. The portfolios are invested in a combination of stocks, bonds, and real estate.
The Conservative is 80% bonds, 18% stocks, and 2% real estate, while the Aggressive is 90% stocks and 10% real estate.
Now, within the preset portfolios are 6 available basic index funds that you can invest in through Vanguard and iShares.
The 6 index is Large Company Stocks, Small Company Stocks, Developed Markets, Emerging Markets, Real Estate, Corporate Bonds, and Government Bonds.
Once you have selected the portfolio you want, the app will start to monitor the Round Up account and see the transactions you have made.
If let’s say there’s a transaction that’s worth $4.25, the app will round that up to $5 and use the $0.75 to add to your Round Up balance.
Once it reaches $5, the app will withdraw it from your Checking account and place it on your investment portfolio.
You have the option to choose the transactions you want to include or let the app do it for you automatically. You can also choose to boost the Round-Up by as much as 10 times.
This means that instead of $0.75, your Round Up transaction can have an investment for as much as $7.50.
Acorns has a fee of $1 a month for the investment account and a $2 fee for Acorns Later, which is a retirement account. They also have a $3 fee for the Acorns Spend, which is a debit and checking account offering.
But if you are a college student, there’s no need to pay a monthly fee. You just need to sign up using a valid .edu email address and have an employment status of Student that is up to four years from the date of registration.
Aside from the investment, Acorns also offers an opportunity to earn through the Found Money program.
The program basically allows you to earn some money whenever you use an Acorns-linked credit or debit card at participating retail stores.
The amount of money that participating retail stores will pay you will vary per store. The stores include Apple, Airbnb, Groupon, Macy’s, Jet, and many more.
Now as mentioned above, there are some issues with Acorns, particularly with the fee that you will pay. You might think that $1 to $3 a month is not really a big amount of money to shell out per month.
But if your investment account will only be small, that $12 a year will be a big expense to pay, For example, your investment account is only at $100 that means the fees will be 12% of your investment.
This is a big amount of money that your investment will need to try and earn back. This shows that you will still need a large amount so that the fees won’t hurt as much.
Another issue is that the selection of the index funds is a bit limited. If you noticed, the company only has 6 index to choose from, which means there really isn’t a lot of options to choose from.
That won’t be a problem for newbies since they won’t be knowledgeable enough to look for more options. But if you are not new to investing, then you might be put off by the limited option the app provides.
What I Like about the Acorns App
Now that we know what the Acorns app is and what it is offering, it’s time to discuss what I liked about this opportunity.
- The first thing that I like about Acorns is that the app is a good starting point for you if you are new to investing or don’t have a lot of money. The app’s system allows people with little money to start investing and build their portfolio. The app also provides educational materials for newbies and the details are explained using layman terms so they are easy to understand.
- Another thing that I like is the Round Up system where the app will basically monitor the transactions you have made with the account. Then it would round up the purchase and input the loose change as part of your investment fund. I like this system because it teaches you to consistently invest in your account. But it does so at an amount that you can likely afford.
- I also like that Acorns is free to use for students, allowing them to start learning about investing and actually invest at a young age.
- I also like that Acorns provide an opportunity for you to increase your investment money through its Found Money feature. With this feature, participating stores will add some money to your account every time you purchase something from them using an Acorns-linked debit or credit card.
What I Dislike about the Acorns App
Despite being appealing, the Acorns app also has things that I don’t really like, which I’ll discuss in this section.
- The first thing that I didn’t like about the Acorns app is that the fees they charge are a bit pricey, especially if you will only be having a small portfolio. If your investment will be in the thousands, the fees won’t really matter much. But if your portfolio will only be about $100, then the monthly fee will eat a large chunk of your money. This means that your investment portfolio will have to do well to justify the annual fee that you will be paying.
- Another thing that I didn’t like about Acorns is that the investment portfolios available are very limited. This will be a big problem if you are someone who is already knowledgeable about investing. You won’t have many options to choose from that could likely fit the investment portfolio you are looking for.
Do I Recommend the Acorns App?
After learning more about the Acorns app, I can say that it is an opportunity that I would recommend if you are new to investing and don’t really have thousands of dollars to invest.
Though the high fee might be a problem for you, especially if you are going to start with only $100, the Round-Up system that the company uses will make sure that you won’t stay at that amount for long.
The system teaches you to invest regularly in your investment portfolio but at an amount that will not hurt your budget.
The Found Money feature can also help you increase your investment money since it allows you to earn just for using a debit or credit card that is linked to Acorns at participating stores.
It’s also good that Acorns made this app free for students since it’s always better to start investing at a young age, as it gives your fund more time to grow.
But if you are already a knowledgeable investor, then Acorns might be limited for you. This is why I only recommend this app to people who are new to investing.