What is Loyal3?
Motif Investing
So, what is Acorns Investing and would you want to use this service? Let me tell you why I use this service. I keep an ear to ground for products and services which come out that might be able to help me invest... be it the stock market, real estate, etc. When I first heard about Acorns Investing, I thought to myself nah, I don't need it because I was already investing in a brokerage account and this service had at fee charged every month of $1 in order to use and I am thinking that is not a $1 I needed to spend. Fast forward 1 year or so from me first hearing about Acorns Investing to end of 2016 where I had less large amounts of free cash flow to invest, although I still wanted to invest, and I started feeling more and more that those services that allow you to make what would seem to be a small insignificant little investments could add up if done over time and it didn't have a be a large lump sum of money. I often feel that I can overlook what the small changes could do to make big impact until reminded of the wisdom of, “many a little makes a mickle”. So I signed up for an Acorns Investing in late 2016.
Acorns Investing has an online website as well as an app that can be setup and what you would then do is link your credit and debit cards which you make purchases on and depending upon the amount of the purchase, it would be rounded up to the next nearest whole dollar (recommended setting; however this is configurable). For example, if you purchased a coffee at Starbucks for $3.75, Acorns Investing would recognize the purchase in its application and trigger the value to be round up to $4.00 and that difference of $.25 ($4.00 - $3.75) would come from a single checking account you link to extract the round-ups amounts. I had some confusion around this at first myself as I was thinking at the time of purchase it was rounding it to $4.00, but it doesn't work like that, it's just triggering internally to set aside $.25 when it reviews your purchases on cards you linked and sees you made a purchase that qualifies to be round up. When the summation of the round-up amounts are $5 or greater, that amount is transferred from your linked checking account into a brokerage account on Acorns Investing which will invest into the diversified portfolio that you select from the 5 options* Acorns Investing have. If you used a debit card to make the purchase from the same account from which the round-up are being taken, you will likely see transaction items on your account like follows:
Date Description Amount Balance
1/20/2017 Acorns Investing Transfer $5.25 $75
1/19/2017 Starbucks $3.75 $80.25
So, what is Acorns Investing and would you want to use this service? Let me tell you why I use this service. I keep an ear to ground for products and services which come out that might be able to help me invest... be it the stock market, real estate, etc. When I first heard about Acorns Investing, I thought to myself nah, I don't need it because I was already investing in a brokerage account and this service had at fee charged every month of $1 in order to use and I am thinking that is not a $1 I needed to spend. Fast forward 1 year or so from me first hearing about Acorns Investing to end of 2016 where I had less large amounts of free cash flow to invest, although I still wanted to invest, and I started feeling more and more that those services that allow you to make what would seem to be a small insignificant little investments could add up if done over time and it didn't have a be a large lump sum of money. I often feel that I can overlook what the small changes could do to make big impact until reminded of the wisdom of, “many a little makes a mickle”. So I signed up for an Acorns Investing in late 2016.
Acorns Investing has an online website as well as an app that can be setup and what you would then do is link your credit and debit cards which you make purchases on and depending upon the amount of the purchase, it would be rounded up to the next nearest whole dollar (recommended setting; however this is configurable). For example, if you purchased a coffee at Starbucks for $3.75, Acorns Investing would recognize the purchase in its application and trigger the value to be round up to $4.00 and that difference of $.25 ($4.00 - $3.75) would come from a single checking account you link to extract the round-ups amounts. I had some confusion around this at first myself as I was thinking at the time of purchase it was rounding it to $4.00, but it doesn't work like that, it's just triggering internally to set aside $.25 when it reviews your purchases on cards you linked and sees you made a purchase that qualifies to be round up. When the summation of the round-up amounts are $5 or greater, that amount is transferred from your linked checking account into a brokerage account on Acorns Investing which will invest into the diversified portfolio that you select from the 5 options* Acorns Investing have. If you used a debit card to make the purchase from the same account from which the round-up are being taken, you will likely see transaction items on your account like follows:
Date Description Amount Balance
1/20/2017 Acorns Investing Transfer $5.25 $75
1/19/2017 Starbucks $3.75 $80.25
1/19/2017 Starbucks $4.00 $84
1/18/2017 Starbucks $4.00 $88
1/17/2017 Starbucks $4.00 $92
1/16/2017 Starbucks $4.00 $96
1/15/2017 Starbucks $4.00 $100
Note: A $4.00 (or whole dollar) purchase is rounded up to $5.00 and that means $1 is round-up and when $5 of round-up is achieved, in our example above $5.25, it is transferred into our brokerage account to purchase investments in the portfolio we selected.
The benefits of investing like this are similar to the other 2 services (Loyal3 and Motif Investing) I mentioned which are:
- Dollar cost averaging
- Small contributions can be made
- Invested into diversified portfolio (without needing knowledge of asset allocation)
- Found Money - If you shop with their brand partners, they'll invest money into your future via Acorns Investing. As of writing this, a few of these partners are Jet, Blue Apron, Airbnb, Hulu, Dollar Shave Club, ...) Be sure to use card you have linked.
- Invite friends and we each earn $5
The drawbacks are as follows:
- $1 monthly fee (but let's be real, they should make something from the service they are providing, so I can live with this; although, I certainly prefer free)
- Potential lost of investment due to stock market exposure
My overall experience with the service has been good, except for the fact as of writing this my round-up have stopped happening. I have contacted Acorns Investing customer support about this and they are working through it. However, since my sign-up in mid August, my account now stands at $201.34. I am balls to the wall, so I am invested in the Aggressive portfolio, but this will be up to you what they suggest and you select based upon your answers to the type of financial profile you have.
PS: Any readers who are currently using Acorns Investing, please share your experience by leaving a comment on this post. Also please be sure share this content to your friends and family if you find it useful. I thank you in advance.
Disclaimer: Financial investments using this and other financial services are subject to risk in that you could lose your entire investment due to the nature of investment exposure to the stock market.
*Acorns Investing 5 diversified portfolio options available are:
Conservative - This portfolio seeks to provide investors with current income and preservation of capital.
Moderately Conservative - This portfolio seeks to provide investors with current income and capital appreciation.
Moderate - This portfolio seeks to provide investors with current income and capital appreciation and current income.
Moderately Aggressive - This portfolio seeks to provide investors with capital appreciation.
Aggressive - This portfolio seeks to provide investors with capital appreciation.
No comments:
Post a Comment