A wise man once said that it is easy to earn money, but difficult to save it. This adage couldn’t be truer in today’s world. Recent surveys have revealed that more than 60% of Americans have savings less than $1,000! With the value of money decreasing over time, it is becoming increasingly difficult to save for retirement or even accumulate an emergency fund. However, all this can change if people are to begin investing smartly.
Luckily, Acorns has been designed in such a way that it makes investing an effortless process. In order to use this app, you do not need to know the financial lingo that is used on the Wall Street. In fact, this app can be used as a stepping stone to becoming financially sound. Thousands of millennials in America are already benefiting from it and you too can become one of them!
So, how does Acorns work?
The best thing about Acorns is that it doesn’t need a huge sum to start investing. The minimum deposit needed is just $5 and you will be on your way to investing smartly. However, as you get used to the app, you can invest lump sum on a weekly or daily basis.
Every purchase you make is rounded to the nearest dollar by Acorns and the difference is invested automatically. Basically, a few cents from every transaction you make is invested by Acorns. It is so subtle that you may forget it is even happening.
These cents are invested in Exchange-Traded Funds (ETFs), comprising six asset classes. You can decide the type of portfolio you want, ranging from conservative to aggressive. (Don’t worry, you will be explained all of these while you sign-up in simple words.) These portfolios, made up stocks and bonds, have different levels of risk and you can decide which one you want to invest in.
Initially, it may be a bit tricky to figure out which cards you should link to Acorns app and where you want to invest your money. However, once you are past that, leave the rest to Acorns as it does the job for you. This is a great way to save, especially for college students. They don’t have to pay any fees for four years (or the duration of their degree), provided they have a valid .edu address.
At the same time, a dearth of tax benefits may keep some at bay. Furthermore, the investment options are limited for a seasoned investor. The monthly fees of 1$ per month may seem a lot, especially if the amount invested is very little.
Nonetheless, Acorns is a great app to save smartly. Every millennial must get this app immediately!