Hubstaff is a software that helps companies manage their labor and payroll. We use it here at EntreResource.com even though it's far from a perfect solution.
There is a neat app called Acorn that makes investing your spare change easy. In this article, I'll give my take on the app and whether or not it's worth using yourself. For many people, it won't be worth their time and it could actually cost them to lose money so read closely!
First, let me say that I am much better at making money than I am at saving and investing it.
The main reason I have a decent net worth is because I generate a lot of cash, not because I am an investing mogul or penny pincher.
Honestly, neither excites me that much. I do understand the importance of investing though, so, when I heard about the Acorn app, I was immediately interested.
The concept is simple...
The Acorn app connects with your credit cards, rounds up your purchases and then invests that amount into a portfolio of investments of your choosing automatically.
For example, if you go to the gas station and purchase a bag of chips for $1.47 with a card you have linked to the Acorn app, Acorn will round up the expense to $2.00 and invest the $0.53 into a portfolio of your choosing.
"The Acorn app connects with your credit cards, rounds up your purchases and then invests that amount into a portfolio of investments of your choosing automatically."
Savy investors might roll their eyes at this (like they do to cryptocurrency investors like me) and wonder why anyone would blindly throw money into a portfolio that they don't understand.
My rebuttal to that is, "investing some money is better than investing no money."
Acorn allows you to choose between 5 levels of risk you would like to take on for your investments.
With the help of Harry Markowitz, father of the Modern Portfolio Theory, they have built a solid reputation so far of ensuring their users have the best chance possible of seeing gains.
My portfolio has seen a lifetime increase of 9.43%
The account value is nothing to write home about BUT keep in mind, this was insanely passive. I didn't feel the pain of investing one bit.
If you're in the investing field, you have to admit, 9.43% gains is really solid!
Now I was also investing $50/month (which was also automated and painless). But a majority of my account is comprised of the spare change round ups.
Is Acorn App Worth It For You?
Ok, before you get too excited, let's go over the fees. While they are very low (relatively speaking) if you aren't investing more than a certain amount, the whole process might not even be worth your time.
This comes down to the fees Acorn charges.
Acorns charges users $1 per month for all accounts with a balance under $5,000 and .25% of the total balance per year on accounts over $5,000.
Compared to other traditional investing management solutions, this fee is very low.
Although these fees are "low" compared to the alternatives, when you're only investing spare change, this can end up being a large chunk of your investment.
For example, if you're making 20 transactions a month with an average round up of $0.50, you're investing $10/month and your're paying $1 (10%) of that in fees.
Using my 9.43% gains as a reference (yours will vary) that 10% would put you in the red.
Yes, you'd end up with money, but your return will be lower than if you just kept the money in a savings account.
So, to keep your fee low relatively speaking, you need to invest more. This might be through more transactions OR by setting up automatic investments (I have $50 recurring investments each month).
Bottom line, if you aren't investing very much, you shouldn't bother with Acorn.
I'd suggest that you make sure that you're investing a minimum of $25 (through transactions and/or deposits) to ensure your % of fees stay below your estimated % of gains.
Keep in mind, no gains are ever guaranteed.
Acorn App "Found Money"
One of the coolest features of the Acorn app is the "found money" area.
Acorn has partnered up with several big name companies to offer incentives to customers who use Acorn linked accounts when making purchases.
For example, if you use an Acorn linked card to purchase a membership to Headspace (a cool meditation app) they will reinvest 10% of your expense into your account.
There are a lot of great partners already and new ones are added all the time.
Acorn App Alternatives
There are other "smart investment/round up" programs on the market that are worth checking out as alternatives to Acorn.
The two big name alternatives to Acorn are Betterment and Wealthfront.
Acorn is different from these two because it was built with mobile in mind. Everything I have ever done with the app I did directly on my mobile device.
Acorn is not as robust as Betterment and Wealthfront but it doesn't seem to be concerned with that (which is endearing).
While Acorn currently gives you just 5 portfolio options, Betterment and Wealthfront offer a wide array of investing customization.
Acorn knows its target market: People who want to invest but don't want to make too many decisions.
If you would like more control over where your change is going, you will want to check out Betterment and Wealthfront.
Thanks for sharing, just signed up. Nice and easy as you said and that makes it a good way to invest because no matter how much I know I should put money away it never quite seems to happen.