A friend of mine told me I should try this cool new app called Acorns.
I blew her off.
It seemed like a waste of time to me, until I randomly read something about it on the web and decided to give it a try.
...and now I'm hooked.
This tiny little app has literally changed the way I spend, save, and invest. I'm so excited to share it with you.
I'm going to cover a lot in this review of Acorns, so you can click on any section and jump straight to it.
What is Acorns?
Acorns is a smartphone app (for Android and iPhone) that lets you start microinvesting into a stock portfolio based on your risk tolerance.
While there are tons of apps and services that help you invest, Acorns is different because it let's you invest as little as a few bucks at a time at any point during the month.
Here's there 30 second promotional video so you can get an idea about them.
How Acorns Works
You connect Acorns to a bank account, credit card, debit card, etc. Then, whenever you spend money on something using that account, it rounds up to the nearest whole dollar and sets that money aside.
When you reach $5, it moves it from your bank account over to your investing account.
So, let's say you buy a pack of gum for .79 and use your credit card (I know, financing a pack of gum, huh). You'll spend .79 on the gum and Acorns will take .21 toward your investments.
If you spend 102.43 on groceries, Acorns will take .57 and put it toward your investments
When you make enough purchases, it will reach the $5 thresh hold and the money will be taken from your account and moved to the investment account.
Pretty cool, huh?
How It Invests Your Money
They don't really advertise it, so I dug through all their legal documents to find out exactly how it works.
Acorns uses a very advanced algorithm based on modern portfolio theory. As you invest money, it buys a series of ETFs to match your investing criteria and risk profile, based on the input you put into the app.
Sometimes the mix of your funds has changed a lot lately due to changes in the market. Acorns will buy more or less of various ETFs each time in order to make the portfolio balanced where it needs to be.
If you adjust your profile, it will adjust all future purchases to get it back into alignment. If you make a dramatic change (say, going from conservative to very aggressive) it will automatically sell a portion of your portfolio and buy other ETFs to get it back into alignment.
It is really quite advanced and I love how you never have to rebalance your portfolio ever again.
The Money Multiplier
Acorns has this really cool feature called the multiplier. Basically, it takes your roundups and multiplies it by 2x, 3x, or 10x.
Let's say your multiplier is 3x. Going back to that pack of gum you bought for .79. Acorns will take .21 and then multiply by 3 to get to .63 that it will take and move to your investment account.
I love this feature because you can save a much larger portion of your spending simply by adjusting this feature.
If you really want watch your spending, set it to 10x and see how much you think before you make every purchase!
Review of Acorns Fees
The first thing you are wondering is if Acorns is free.
The answer is no. Unfortunately it's not.
The cost is $1 per month for up to $1,000,000 invested.
If you have an extremely small amount invested and never invest any more, then you probably don't want a fixed fee structure like this.
But, if you continue to use the app, the $1 fee very quickly becomes an extremely small fee as compared to the whole portfolio size.
If you use Acorns Later for your retirement account, it is an additional $1 per month.
Acorns "Found" Money For You
If you haven't noticed, most of the internet runs because of either ads or affiliate partnerships.
Either some creates content hoping you'll click on an ad, or they create content hoping you'll click on a link.
Acorns is affiliated with a lot of vendors around the country, and every time you make a purchase through Acorns, they get a fee.
Most advertisers don't share that money with you, but Acorns is different.
Every time Acorns earns money from an affiliate, they share a portion of that revenue with you!
Need a new line and phone from T-Mobile? If you use the Acorns link and get it, you'll find an extra $50 in your account soon enough.
They're affiliated with a ton of HUGE names such as Under Armor, SoFi, Uber, Sams Club, AirBnB, and the list goes on and on.
Recurring & One Time Transfers
Of course, no investing app would be very useful if you couldn't set up recurring or one-time transfers.
You can set up any amount for a recurring monthly transfer. That's pretty standard.
But, what if the stock market takes a quick 5% dive and you want to toss some more money in there to take advantage of it?
Literally, with the click of a button, you can add a one time investment to your Acorns investing account.
Acorns Review Summary So Far
Setting up an Acorns Account
This part of the Acorns review is about setting up your account and getting started.
It's really simply, you just need to attach it to a bank account at a minimum, but you can also attach it to any number of credit or debit cards.
You'll need the login info to your bank account and credit cards, but the process takes a total of less than 5 minutes.
In a lot of other reviews that I write, this section is a lot longer. As much as I'd love to write another 300 words on setting up an acorns account, I can't.
Because, it's that easy.
Changing Your Spending Habits
I can really only speak for myself in this Acorns review, but I know it changed my spending habits.
I'd look at just how much money it was setting aside and I'd have a "holy SH*T" moment. In order for it to take hundreds of dollars out of my account, I must have been spending thousands!
...and sure enough, I was.
Then I set the multiplier up a bit and saw even more come out.
So, I started to pay attention to just how I used my credit cards.
Soon enough, I was investing way less. But, that meant I was spending way less too! Not only was my investment account growing, but my bank account was growing faster than ever before.
So, jacking the Acorns multiplier way up is a good way to help you watch your spending habits!
Acorns Later - Saving for Retirement
Acorns recently rolled out something they are calling Acorns Later.
Basically, it is an IRA account where you can invest in it on a recurring basis, or on a one-time basis.
Acorns later doesn't allow for the round up option as the traditional acorns option does.
It also costs $1 per month to have.
Acorns Spend aka Acorns Debit Card
This one is even newer than Acorns Later. I was skeptical about it at first, but after taking a look at it, I realized it's pretty awesome.
Basically, this is a bank account and debit card that ties in directly with your Acorns investment and Acorns retirement accounts.
It does cost $1 per month, which in this day of high-fee bank accounts is relatively cheap, but there are still plenty of bank accounts out there that have no fees at all.
So, the only reason to really get this is to tie it directly in with Acorns Found Money. Basically, if you use this debit card at any of their partners, you automatically get the % back from the vender.
This is different because using the acorns app, you generally have to click through a link to get credit (so you miss out on some of the benefit because you probably aren't browsing their app every two seconds to find partners before you buy anything.
So, if you really want to max out the investment account, the best way to do it is with Acorns Spend.
Or, you could just keep your fee free account and click through the app to get your cash back.
Conclusion of Acorns Review
I have the Acorns app and have been investing with it for around 6 months.
Overall, I really love this app and That's why I'm giving the Acorns App Review high marks.
It's helped to change my spending habits, save more, and invest more.
I already have other retirement accounts so I don't really need Acorns Later, but if I did need them, I'd definitely try it.
As for Acorns Spend - I'm still on the fence.
It seems like a really low-fee version of greedot, without the ability to use cash to add into the account.
I think it needs to add some more features before I'm 100% on board with it, but I do like how it automatically gives you the "Acorns Found" money without you having to use the link.
Other Acorns Reviews From Around the Web
Acorns Rating - 8.5/10
The Acorns app invests your spare change. It rounds up to the nearest dollar (or more) for every credit card purchase and micro-invests the difference. It makes saving fun and easy. On the downside, the increments are probably two small to be effective for long-term savings.
Acorns Rating - 3.5/5
If you want to make the most of your spare change and get the occasional retailer kickback, there’s really no better place to do that — especially now that Acorns offers IRA accounts. The automatic roundups at Acorns make saving and investing easy, and most investors will be surprised by how quickly those pennies accumulate.
The downside? At small balances, Acorns fees can cut into or completely wipe away investment returns.
Acorns Rating - Thumbs Up
In nearly 30 days of having an account and in a market that's been losing ground since the start of the new year I have made the grand total of $3.40 with a gain of 2.81% in just that period, which is actually really great. If it can keep this rate up, I might actually make some money.
But for me, being still very young and having never invested money in the stock market before, this has done exactly what it's meant to. I've become genuinely interested in the market and want to invest as much money as I can, which has hopefully led me to a successful future investing.