Why Acorns is the BEST and EASIEST Way for You to Start Investing

As I mentioned earlier, I started investing with Acorns in 2016, It was never intended to be my main investing account, nor was it going to replace my retirement strategies. It is a complementary tool that made investing easy and their main pitch was investing your spare change in the form of round-ups from your checking account. So in other words, it’s like a “set it and forget it” type of investment vehicle via an app in the palm for your hands. I figured why not give it a go and see where the journey takes me? I’m glad I did.

I’m going to go into all of the services Acorns offers, but the main focus is going to be on Acorns Invest. Acorns Invest, which primarily invests in ETFs (Exchange-Traded Funds). I don’t say this often but KEEP THIS POST. It can really be a benefit to you as you start your journey into investing. I am going to be as transparent as possible with this one so you can fully understand the power of investing and compounding. As of right now, my Acorns Invest Account has $10,518. I’ll do my best to break it down for you to show you what has transpired over the last 5 years.

Acorns Invest

This was the only option available to the public when I opened my Acorns account. This is a taxable investment account that puts your money into exchange-traded funds (ETFs), chosen for you based on your risk tolerance and financial goals. There are 3 ways to primarily fund your account: via round-ups, recurring deposits or on-demand deposits.

Round-ups basically “round up” your spending in your bank account to the nearest dollar amount. For example, if you pay $4.75 for food, it will set aside 25 cents, rounding up your charge to $5. At which point it will deposit that into your Acorns account and invest it into your already existing portfolio by buying fractional shares. I have my account set to automatic, so it does it without hassle.

I also have my recurring deposits at $20 a month and every so often I make an on-demand deposit to my account. You can also earn money into your Acorns account through Earn Rewards and Referrals. Acorns has partnered with some of your favorite retailers and brands so you can earn money when you shop or use their services. I recently earned $9.34 from a purchase I made on Nordstrom and $1.38 from Uber Eats. Also, I’ve referred this to my friends before and one of them signed up, earning us both $10 each. This is my referral link if you want to open an account.

Below is a screenshot of what’s been invested so far, my earned rewards, my dividends earned, and my referral fee. Later on, I’ll show you my Performance and account value breakdown.

You can see my total investment since 2016, the amount of money I’ve made from dividends from the shares I own, the rewards I’ve earned, and my referral bonus.

Please know that this is not some special account setup. My account is pretty standard. My portfolio is set to aggressive, and you can choose between 3 options based on your income, networth, age and time horizon.

The investments in my portfolio are divided based on the percentage of portfolio they occupy and the ETF it’s invested in:

• - Large Company Stocks 55% VOO
• - Medium Company Stocks 10% IJH
• - Small Company Stocks 5% IJR
• - International Company Stocks 30% IXUS

See actual breakdown below:

As I mentioned earlier, I’ll show you my current performance breakdown and my Investment projection. (see image below) These images were captured on March 2, 2022.

This is a screenshot of my performance so far. We are currently in a downmarket as I type this and yet my portfolio is performing at a 25% overall gain since 2016.

This screenshot is a projection of the amount I’ll have by a certain
age. The $89,199 is what I’m projected to have if I kept my monthly
deposit at $20/mo along with the round-ups and made no other significant
cash investment into this account for the next 27 years. You can see
how much I would have invested in that time period and my ROI- return on
investment. Not a bad return, considering the circumstances by which I
started this account. Those returns can be way better for you or your
loved ones, with a little bit more intent and financial commitment.

Acorns Later

Acorns Later is a tax-advantaged individual retirement account (IRA). Like Acorns Invest, your portfolio is made up of ETFs. We found the Invest/Later nomenclature a bit confusing since it’s not as if your Acorns Invest funds are meant for day-trading or immediate use. All investing is for the long haul, whatever the goal. I have chosen not to participate in this as I already have another Individual Retirement Account set up elsewhere. However, maybe in the future I might consolidate that into this and have the ease of seeing everything in one place.

Acorns Spend

Acorns Spend is a checking account that comes with a debit card and minimizes fees and penalties. I applied for a debit card and a slick hard-shelled bright green debit card was sent in the mail. I used it for a while, however after some time, I stopped, simply because I already have my banking needs met by another institution, and it was too much of a hassle to have to transfer money into this debit card in order to use it. As a result of a lack of use, they closed my account and sent me a message informing me that I cannot open one at this time (for whatever reason unknown to me). That’s OK, though, because I really have no use for it. For them, it’s a good way to get all your financial needs under one roof from banking to investing to retirement. Smart move, however, I’d say they’d have to make the banking more enticing to keep people around. I don’t know what their sign-up rate is for this feature nor do I know what their retainment level is.

Acorns Early

Acorns Early is part of the Acorns Family Investment plan and costs $5/month. With this you are able to open a UTMA/UGMA account for your child. In simpler words, you are able to open a custodial account for your child. I wrote an entire article about this, you can read all about it here and learn more about the Acorns Early option.

Conclusion

With all that said, here are some pros and cons of utilizing Acorns as a financial platform for banking and investing.

PROS: It’s an easy-to-use platform that makes investing exciting and hassle-free for those who might not be well-versed or stress too much about it. Once setup is complete, It takes the stress out of the equation. Setting up, monitoring, and maintaining your account are all pretty straightforward.

CON: One of the drawbacks is you don’t get to talk to a financial advisor — this is robo-investing. However, I do think it is appropriate, and with a little research, can be profitable. How many of you have ever called your 401K advisor that you set up through your employer?

So now that you’re more equipped with all this information, go and get
started on your investing! Definitely check out Acorns, and let me know
if it works for you! Please keep educating yourself. Financial literacy
is important to so much that we want to accomplish in life. Good luck
with your investing and future gains.