My Month With Acorns Review

This is going to be an interesting review, many people I'm sure have heard of the Acorns App. I wanted to do a simple yet, informative review of this unique Application. This application takes a whole new approach into the investment scene. They are the only investing company I'm aware of that actually benefits it's users as they spend money which sounds like a contradiction within itself. It's a crazy thought to think that the more money one spends the more money will be invested within the user's accounts.

Acorns is user friendly application that allows the investor to link their credit card and bank account to their account. I was very skeptical about this at first because It didn't make a whole lot of sense on how the company was going to be investing my spare change. I feel the company should almost have a video created on how the whole process works because at the time of my account creation their wasn't too much informative information on the process.

How It All Works

After downloading the app the next step is account creation and setup. This whole process was very simple to do over the phone and the interface of the program was seamless. The only minor setback to account creation was the setting up of the brokerage account. due to the uniqueness of this investing program, they have a different kind of setup process that requires your social security number for investing and tax reporting. Once I created my account it did take a few days for one of their administrators to review my information and approve my account for use. All information was conveyed and exchanged over email.

Once I linked and verified my bank account, and linked my credit cards I was good to go. I was actually pretty giddy about making my first purchase and seeing how this app would round up my spare change. After making my first purchase I quickly opened up my app to see what was going on. The app has a minimum investment threshold of $5. What this means is that the user needs to have enough rounds ups set aside from purchase made till they can invest their spare change. This makes sense to me as it would be difficult for a brokerage to really invest anything under a dollar. I personally would love to see the app eventually allow users to invest a smaller thresh hold.

Being a dividend investor, I'm more frugal with my money so I'm not out there making a ton of purchases everyday. It took me a good amount of time before I reached the investment threshold of $5. To me this was one of the bigger downfalls of the app but lets look at who this app is geared towards, Millennials.  If I consider that one fact then it makes more sense to me as millennials have a hard time saving money and from what I have observed, they spend money more freely than most other generations.

The app tracks all purchases made and in the round up tab, keeps a running total of what spare change was thrown into the piggy bank fund. Once the $5 threshold was met I was able to make my first small investment. I was given many different investment choices and it was very easy to understand the different options laid out to me. It also gives you a risk tolerance and explained what risk tolerance was appropriate for what age group. I obviously chose a high risk/high yield investment. I really enjoyed simplicity of choosing an investment account. The transparency was also a bonus, I was able to get more information on all the choices offered for investments simply by clicking on the more info tab.

I found out that once I made my first investment from the round up tab it withdrew that amount from my linked bank account. for example, once I had $6.21 I chose to invest that money from rounds ups into my chosen investment choice. The money was placed into my portfolio instantly and It went to work immediately for me. It made a lot of sense to me once I did my first round up investment and I became hooked on the app.

The program also offers a recurring investment option also which I truly enjoy as I have recently written an article on how I'm taking steps to automate my financial life. The recurring investment option offered a plethora of options to choose from. You can choose to do a Daily, Weekly, or Monthly investment option. It gives you the option to enter the amount of money you would like invested at your time preference. I really think to be successful in this investment approach the user needs to set up the recurring investment option. Over a month span I only had $11.23 invested from round ups. If I continued this same short of trend I'd only have $134 invested over a year span. YIKES. Hopefully no one using this app thinks their spare change roundups are a practical approach towards retirement.

Conclusion

I really enjoyed the app for the month that I used it. I actually had a pretty decent return rate on the money I had invested also. I was up 3.32% on just my round ups I had invested. It was a very simple platform that allowed it's users to dip their toes into the world of investing. This app however is not for me since I'm a lot more aggressive with my investment approach. 

This App is for the person who would like to do a bit of spare investing on the side and not put a lot of time or effort into it. This is for the person who is already contributing towards their 401K and would like to have a little bit of side investment money that they could save up for some major purchases down the road or simply roll over into their 401K. I can easily see people using this app to save up money towards a big purchase like a car or a down payment for a home. Yes it would take some time but if the user sets up the recurring investment option they could easily hit their goal in a shorter amount of time and through the process of automation they wouldn't even realize it was happening.

I was extremely satisfied with the return I received on my money in such a short amount of time also and I think it would super encouraging for a new investor to be able to see similar gains in such a short period of time.  I personally give the app 5 out of 5 stars in my opinion and I would recommend it to anyone who would like to take small steps towards the investing scene.

Logo provided by Acorns through the press page. I don't have any money invested within the Acorn app at the time of writing this article.