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This website is not an advisor in any way, shape, or form. Results can greatly vary and are not guaranteed. Financial advice that could be right for me or someone else may not work or be right for you. Consult your financial advisor before making any decisions. The smart money says do not invest any more than you can afford to lose. That being said… let us dive in!
By investing strategically into over 7,000 stocks & bonds, this gives you a strong diversity across your investment platform. Acorns also offer dividend stocks. This means when a particular stock does well the profit is shared among its investors. These dividends are then reinvested back into your portfolio. Many companies will do this for various reasons, but as far as we are concerned, it is an income we can reinvest or use elsewhere.
Acorns Features
Savings Round-Ups
Acorns shines with its Round-Up feature. This is great for anyone that feels they don’t have the money to save. Acorns will automatically ‘Round-Up’ your purchase to the next dollar and invest the difference. I typically use my debit card for everything.
When I buy my coffee and breakfast at my favorite coffee shop in the morning, it typically costs about $9.27. Acorns will see this transaction and round it up to 10.00, investing the other $0.63 into my portfolio. You can also set a multiplier of 2X, 3X, or 10X of your calculated Round-Up. I sometimes use my card 3-4 times per day easily. At this average, I am having Acorns place aside a few hundred dollars per month with my multiplier. With roundups and recurring investments pre-determined, you can forget about investing and enjoy your life.
Earn Found Money
You can also ‘Earn Found Money.’ These are offers that once qualified will add a dollar amount or a percentage spent into your account. The vendor list is quite extensive and will be crucial to take advantage of. Once again, more free found money.
Acorns Later
Acorns Later is a Traditional Individual Retirement Account (IRA) that is a low-cost managed retirement portfolio based on your specific needs. During this quick and painless signup process, you will be asked a number of retirement goals to help get you started. Unfortunately, as with all IRA’s in 2020, you can only contribute $6,000 to this fund per year if you are under 50. Once you reach 50, you can contribute $7,000 per year. You will need to start another investment account for anything over that amount.
Use M1 Finance to Start an Investment Account
Acorns Spend
Acorns Spend combines a checking account and debit card for real-time roundups, automatic retirement savings, and extra savings with Found Money.
Fees
Acorns does charge a small fee of $1, 2, or 3 dollars based on the program level you signed up for. This sounds expensive at first until you reach $1,200 dollars. My reasoning is that most Robo-Advisors are charging you 0.25% to manage your money. At $1,200 invested, you should just about break-even, which is nothing to complain about. Other advisors will simply end up charging their management percentage, costing you more and more as your portfolio grows. But fear not, the fees eventually do go away. Unfortunately for most of us currently but trying, those fees do not disappear until you have $1,000,000 USD invested.
Tier 1 – $1
Tier 1 is the standard tier that you fall into when you first sign up. This tier has the round-ups and basic features to get started. If you are not interested in an Acorns Later (Retirement) and Acorns Spend (Debit Card), this tier is what I recommend.
Tier 2 – $2
Tier 2 is when you begin adding Acorns Later to your portfolio. Acorns Later is a retirement account. Unfortunately, everything with your portfolio in all cases is mostly controlled by Acorns. Your IRA is no different. Once you make a few choices, they do the rest.
Tier 3 – $3
Tier 3 gives you access to an Acorns Spend Account, Acorns Invest Account, and one or more Acorns Later Accounts. This is their top tier that allows you to have a nice sampling of everything they have to offer.
Custom Priced Tier
The custom tier is an odd tier that would include unique or beta products or a combination of other options that could be involved in a promotion or limited-time offerings.
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Get Your Acorns Back
So, I just did what every investor is told over and over not supposed to. Life happens and sometimes you just have to. Or maybe you hit your savings goal and now its time to put your investment to use. Either way, I just incurred a taxable event and withdrew a portion of my Acorns investments. Let’s see how easy this is…
As stated above, I have been using Acorns for short term investments and more like a rainy day savings account. Getting your investments out is as easy as getting them in. I am constantly pulling money out and placing it quickly elsewhere before I can spend it unwisely.
You can withdraw your investments in very few steps. Nothing complicated or time-consuming. When you are looking at “Your Invest account value,” there is a Withdraw button. The icon looks similar to money falling, as in not increasing your investment value. Click this icon and you will be brought to a simple page that is straight forward. Type in your withdraw amount and hit “Withdraw.”
For security and other legal reasons, you cannot withdraw your investments into a different account. This is true for most investment services.
If you attempt to take out more than 95% for your investment, Acorns will withdraw your entire balance to “account for market fluctuations” when your shares are sold. I have never taken this much out as I tend to keep a nice round number in there for extreme and unusual situations.
As with the other similar services, in 3-5 business days, you will have your cash credited to your bank account. I have personally experienced mostly 3-4 days depending on when I initiated the transfer.
Why I Use Acorns
Typically, I use Acorns more for short term investments. Round-Ups make putting money aside painless and invisible. Once I am ready to move this money to another account, I’m able to easily move it back to my bank and either spend or transfer to another investment.
Conclusion
For a low monthly cost, Acorns can automatically put money aside or even into a retirement account. There are many opportunities to allow your pennies to grow up and turn into a large savings or retirement account. Or both! Don’t forget to take advantage of bonus offers that will contribute to your savings!
Pros
- Easy to start and setup
- No minimums
- Thoughtless savings
- Automatic Round-Ups
- Automated Scheduled Deposits
- Withdrawl Anytime
- Flat Rate Fee
Cons
- At first starting off, the $1 plan is higher as a percentage
- Paying cash or not enough transactions can cause low balances
- 3-5 business days for withdrawals
Use my Acorn Link to get both of us a $5 bonus! It might not sound like much now, but that $5 could be worth about $55 in 30 years at 8% APY. I will take what I can get.
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