App of the Week: Acorns

 

By Investmentzen.com

Summary

If you have never heard of Acorns, that is about to change. To save you time from scouring the web for quality Acorns reviews, we went ahead and put together everything you need to know here.

Acorns uses the “micro investing” approach by allowing you to round to the nearest dollar for every purchase you make and investing the difference. All those pennies start to add up and compound over time, and best of all it happens automatically when you make purchases you would normally make anyways!

Account Minimum
$5
Fees
$1/month or 0.25% per year for accounts greater than $5000.

Expert Walkthrough

What is Acorns?
Saving money today can be difficult. That amount of people who are investing in their future is far lower than it should be. Nearly 7 in 10 Americans have less than $1,000 in savings. It doesn’t have to be this way!

It can be difficult to reach the goal of a comfortable emergency fund or even starting to save for retirement. It takes both time and attention. With how busy life gets, these two things are not always easy to find.

Now Acorns has entered the game and is helping people in this exact situation. This is a service that allows you to get your feet wet with investing with little to no knowledge required. With such an inventive idea, we’ve put together this Acorns review for you to see how they can help you start investing today.

Acorns is revolutionizing the way millennials invest. They are taking charge in a time when it is well known that most people are not saving nearly enough to guarantee a comfortable retirement. This is a problem! Retirement can be as long or longer than your working career, so you want to make sure you are planning for it.

This is why Acorns allows college students to pay absolutely no fees for four years. Once you provide a valid .edu email address, you won’t pay a dime to Acorns for the remainder of your four-year degree.

Acorns does an excellent job explaining the investing process to beginners. Throughout the experience of signing up and investing, key terms are defined in a digestible format. This way, you know the implications from every action you take within your investment portfolio.

 

 

How Does it Work?

Acorns enables you to round to the nearest dollar for every purchase you make and invests the difference automatically.

These pennies are invested in one of six asset allocations. Each portfolio is made up of different Exchange Traded Funds (ETF). These options allow you to decide how aggressive or conservative you want to be.

The portfolios that are available are:

Conservative
Moderately Conservative
Moderate
Moderately Aggressive

Each of these portfolios are balanced differently to aim for your desired level of risk.

It really is that easy.

In addition to “Rounding Up” you have the option of contributing lump sums on a weekly or even daily basis.

This method takes more effort because you have to go out of your way to send money initially, or regularly. While it is a great way to get in the habit of investing, Acorns mainly focuses on sending a few cents on each transaction you make. It is done in the background so you may even forget it is happening.

There is no cost to sign up, but a $5 deposit is required to begin investing.

It is easy to login and check your balances and performance of your investments. Acorns will automatically reallocate your funds to fit the asset class you have selected.

This way, if the small business cap stocks have a good month, you won’t have too much tied up in that sector after the rally. Your money will be redistributed to other asset classes, potentially limiting the risk of losing these gains.

Pros

Acorns has changed the game for millennial investors. Although those from all walks of life use the service, the younger generations are taking advantage of this micro investing approach more than others.

Acorns makes investing easy. With a “set it and forget it” methodology, in a way it forces you to begin investing by rolling in few cents for every purchase you make.

This is a great way for college students who may not have access to a 401k plan to build up a savings account. Acorn investments will grow just as if the funds were placed in an individual mutual fund with an investment bank.

They do all the work. When you sign up with Acorns, the hardest part of your job is initially deciding where you want your money and linking your cards (which is not difficult). After that, you are saving money.

Acorns also offers a mobile application for iOS and Android devices. Take a look at the Acorn app reviews in the app store to see what people are saying. The feedback is overwhelmingly positive. The app is helping so many people, there may be use of a full Acorns app review in a future article.

Acorns is very useful if you are just beginning to learn about investing. They make it very easy by doing virtually all of the work for you. Your everyday purchases contribute to your savings.

From the time you swipe your linked card, you will decide which asset allocation you want to invest in. Acorns puts your money in a well diversified portfolio of stocks and bonds.

 

 

Cons

Acorns isn’t perfect for everyone. This service is not a way to replace a 401k or Roth IRA. The lack of tax benefits may steer some away.

The fees to use the service can be rather high when combined with a low account balance.

If you take advantage of the Round-Up program that Acorns offers, the pennies you are contributing will add up over time. Depending on how much you spend, you could be hovering under $20 for quite some time.

A $1 fee on a $20 balance is a 5% fee. When compared to retirement accounts with other financial institutions, 5% would be extremely high.

You can of course lower the fee percentage by depositing a larger initial amount, which would dilute the $1 fee to a lower percentage of your total savings.

Limited investment options. Acorns does offer 6 different assets allocations that are well diversified. However, hundreds more options can be found by dealing with a commercial investment company like Wells Fargo or Fidelity.

 

 

Is Acorns Worth It?

Acorns is an amazing tool to get started with investing. If you do not have a company offered retirement account like a 401k, it allows you to put your money in the stock market with little barrier to entry.

It is not a way to replace a 401k or Roth IRA. Acorns does not provide a match like most companies, and the growth is not tax deferred or tax free.

The passive nature of using Acorns works well for investors who want a hands off approach. With reallocating and depositing done in the background, you have more time to focus on other things in your life.

If you would rather get a root canal than learn about investing, then Acorns could very well be the solution to your problem. Use this Acorn review and decide for yourself if this method of investing will be beneficial for you.

Download Acorns for iOS and Android

Do you have a favorite investment app? Tell us about it in the comments below?

App of the Week: Truebill

The App That Will Save You Hundreds Of Dollars

 

 

By Brian Rashid of Forbes

Sadly, some companies do not have your financial best interest in mind.
Companies that operate with the popular subscription-based model may be charging you money without you knowing. This could be in the form of hidden fees, by making it difficult for you to cancel a subscription, or even by signing you up for recurring payments when you make a one-time purchase.

Yahya Mokhtarzada realized the prominence of this problem when he was charged sneaky fees for in-flight wifi he had signed up for months ago. Annoyed, he did his homework and found that this situation is very common.

 

He teamed up with his brother, Idris, and founded Truebill, an app that detects and monitors recurring subscriptions.

Not only does Truebill identify these payments, but it allows users to cancel unwanted ones with a single click. The app goes a step further to ensure that the subscription is canceled by monitoring the user’s bank account the following month. In the event that the company did not follow through on the cancellation, Truebill will contact them and give the user a refund. Best of all, this service is completely free – an incredible price considering the average Truebill user saves $512 a year.

Let’s look at a real life example of their service. Imagine a user signed up for a gym membership in a city she no longer lives in. She realizes that she still being charged and wants to cancel. She calls the gym and finds out that the gym requires her to cancel in person. If not, she will have to mail a Certified Letter. With Truebill, she can easily cancel with one click on the app. Then, Truebill ensures her subscription is canceled by monitoring her bank account for charges the following month. If the gym charges her again, Truebill will automatically contact the gym to get her a refund.

In addition to saving users money, peace of mind is of the utmost importance to the Truebill team. They understand the reluctance of giving a stranger access to your financial data and use only the strongest security protocol. They do not share user data with other companies and use read-only algorithms when scanning user information.

Truebill is not anti-subscription. In fact, they educate the user on popular subscriptions with reviews on their website and recommend new ones that will increase the user experience. Truebill is, however, anti-subscription mismanagement. They believe that as payments become more automated with subscriptions, the user’s way of managing them should also become more automated.

Further, Truebill continues to increase the user experience by creating more features. They recently launched a tool that monitors subscriptions and warns the user if a price goes up. As the list of features continues to grow, the real value of TrueBill will remain, the awareness of where your money is going and what to do if you are not happy with that figure.

With our world moving toward automating, it is likely that the subscription-based model will continue to be popular. Brothers, Yahya and Idris, envision that everyone has complete control of their finances in this digital world. At just over a year old with over 150,000 users signed up, they are off to a great start.

What’s your favorite money management app? Tell us about it in the comments below!

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