Investing has always been something that made me nervous. It all seemed too complicated and far beyond my math comprehension. Technically I shouldn’t even be worried about investing right now because we are still working to pay off our debt. However, there is an investment app that just seemed too simple to pass up. Acorns is a spare change investment app that rounds up your purchases to the nearest dollar and then invests that money for you! If you have wondered as long as I did about how Acorns work and whether or not it’s actually worth it, I have it all laid out here for you. Plus, I will show you my personal slow-start simple investment plan to turn $50 per month into $150,000.
*This post contains affiliate links. I may make a commission off any recommendations, but all opinions are my own.
How does investing with Acorns work?
I heard about Acorns spare change investment app about a year ago and since then I have continually researched it. It sounded too easy and the idea of setting up an online investment made me nervous.
Like anything that involves my money, I wanted to make sure that I was making a smart move and that I wouldn’t be getting ripped off. I made sure to do the following before investing:
- Read reviews
- Get a full understanding of how Acorns works
- See if people got actual results
Like all reviews, some were negative. Including multiple posts written about the dangers of investing too little.
However, a lot of the argument came from the idea that Acorns uses such a small amount of money and your chances of seeing major growth are too insignificant.
Can you invest too little?
While it is true that investing too little might not yield big results, with Acorns, you can make larger investments whenever you choose!
It doesn’t just have to be spare change that you invest! Acorns is designed to help new investors get comfortable with investing. As someone who has never invested before, that was exactly what I needed.
Acorns for first-time investors
Here are a few quick facts about Acorns that are beneficial for first-time investors to be familiar with:
- Acorns is only $15 a year for first-time investors
- Once your portfolio reaches $5,000, Acorns takes .275% (pretty minimal compared to other investment fees)
- They easily link to most major banks
- You choose how aggressively you want to invest
- You can choose to make monthly investments on top of your spare change
- Withdrawal of funds takes up to 2 weeks
How to get started
When you first sign up for Acorns, they will ask you basic information like name, income, social security number, and bank account information.
This is where I kept stopping. It makes me so nervous to share this information online. I would enter some information and then stop to research more before I entered anything else.
From the research, I did I learned that Acorns is a highly trustworthy and very secure network. I still waited.
Select your Acorns investments
Once you have signed up, you then have the option to choose if you want to invest a certain amount monthly and/or add a one-time investment.
You can see in my graphics below that I did a one-time investment of $25 along with a $50 per month investment.
I did the $25 just to get started since we had some extra funds available. I figured if I’m going to try this investing thing, I may as well try to start a little bigger than just spare change.
You can also choose to:
- Multiply your roundups which means if you have .50 cents to round up, Acorns will double or triple it.
- Link additional cards like credit cards so you have more opportunities to invest.
- Choose how aggressively you want to invest which I will talk about later.
Selecting a portfolio with Acorns
There are different levels of investing from “Conservative” to “Aggressive” that Acorns allows you to choose from.
What these levels basically determine are the types of investments made. To put it simply, (because I need this to be simple) the more aggressive you get, the more serious types of investments you’ll be making and with larger companies.
After reading reviews, but still being nervous to get my feet wet, I decided to invest comfortably in the middle. You can see my “Moderate” investment here and how all of my funds are dispersed. Hopefully, as I get more comfortable, I will make the leap to more aggressive investing.
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From $50 a month to $150,000
So how am I going from investing $50 a month to $150,000?
A great motivator that Acorns shows you is your projected investments.
With projected investments you can:
- See how much you have already made
- Review much you have invested
- Get a prediction of what your future might look like if you keep investing with your current plan.
Here’s what mine looks like so far:
It might seem disheartening to learn that after almost 40 years of investing, I would only be at $154,902.
This is why some people suggest not even bothering with a small investment app like Acorns.
However, if you take a moment to calculate what would happen if I just saved $50 per month, this is actually a significant growth.
- Saving $50 per month for 40 years: $24,000
- Investing $50 per month with Acorns: $154,902
Using Acorns I make a profit of $130,902!!
Final investment tips
If you are new to investing and you are ready to sign up for Acorns, here are a few tips I have to offer:
- Start where you’re comfortable – Don’t jump into aggressive investing before you’re ready. There’s nothing wrong with testing out the waters first.
- Don’t panic – One thing I have learned is that the market is constantly going down and up. If you are down one day, don’t sweat it or start panicking. In fact, it might be a good idea to only check your Acorns account once a month to prevent panic.
- Don’t withdrawal – Acorns makes it very easy to withdrawal your money at any time. Don’t do it. You got into this investing thing to do exactly that…invest and grow your wealth.
I hope this helped and if there is anything I didn’t address, feel free to get more clarification by asking your questions in the comments below!