Every once and awhile you run into something fascinating. Something that just completely blows your mind when you come across it and see the potential and opportunity you can garnish from what you are all of a sudden absorbing. A little over a month ago I was sitting on facebook just scrolling through the news page. I follow a page called TechCrunch, a page that posts info on the worlds’ up and coming and new start up technology. TechCrunch had recently done a review on a new website called Acorns. I was interested in seeing what this Acorns was all about since it was titled as a new way of investing into the market for millennials. I took a look at the article and was mind blown with what they were presenting to me. Lets explain it here.
Acorns is a new financial platform designed for new people trying to get into the stock market. The main target is millennials in particular that don’t have thousands of dollars to invest in the market. With Acorns you can take your spare change from purchases on your debit card or credit card and the app automatically rounds up your purchase to the dollar! So lets say you decide to go to Target and buy some pop and salsa. Your total comes out to $4.69, great now your going to invest $.31 because it is rounding up to the nearest dollar! How great is that? The deposits are scooped up out of your bank account every time you reach $5 in roundups. The program it’s self currently is only a mobile platform for smart phones and not available on desktop yet. When you are signing up for the App it asks you how aggressive you would like to create your first investment portfolio with them. Im only 24 so I obviously set mine to Aggressive which is the riskiest feature on the platform, but because I am young I’m willing to own more stock than bonds. After doing this you link your checking account to the app and what ever credit cards you want also to the app. Every round up takes money out of your checking account including your purchases on credit cards. Once I signed up I deposited $20 into my account instantly just as a starter to see what would happen when the first process went through. The money appeared in my account the next day and I was on my way. I decided I wanted to go a bit harder at the app though and set my platform to deposit $5 a day instead of waiting for my round ups to reach $5. On average I deposit $6.25-$6.75 a day including round ups into my account Acorns account. You can choose to have all your purchases round up or manually select what you want rounded up into your account, but since the whole idea behind the app is to help you save I think its better to just deposit all round ups. As of today I have deposited $291.79 with a -1.10% return which is the lowest Ive had my losses at in 34 days. -$3.27 over 1 month of depositing every single day. I also forgot to mention the monthly fee is $1 a month so $12 a year.
When I first came across Acorns, TechCrunch also posted a link to a podcast called Listenmoneymatters, who had also done a review and episode on the app, before I start talking about Listenmoneymatters im just going to fast forward for now and start talking about another investing platform called Betterment. I found Betterment through the financial podcast called Listenmoneymatters. I will talk a lot about listenmoneymatters also but for now am just going to provide the link the their boss show.
So this is all great this is all happening extremely quickly in my mind and I cant believe that low and behold their might be a program even cooler and swifter than Acorns. I googled Betterment after the podcast ended and went directly to the website. Betterment is the big brother to Acorns in the investing world for millennials. If you are friends with me I will bug and pester you to join at least one of the platforms. They are both extremely crisp platforms for people brand new to investing. Betterment has been around for awhile and is known as a Robo adviser. Meaning human configuration is not involved when creating an investment portfolio for your needs, so no emotions are involved. I decided to sign up right away and looked over the platform and its fees.
The principle behind betterment is the same as acorns but it has a more detailed and analytical platform than Acorns does. Betterment goes into detail about the funds you are allocating your funds to and where you funds will succeed if you wait X-Amount of years. You create a financial goal when you sign up, mine was to build wealth, specifically $25k over 41 years. Obviously that is a long time and according to Betterment I could probably achieve my goal in 13 or 14 years, but for now since I am only 1 month I am just going to keep it set at 41 years until I get a better grasp on the program. Like Acorns I set my portfolio to 90% stocks and 10% bonds. I currently have deposited $515 into my portfolio with a -1.5% return so far. I signed up for Betterment a couple days after Acorns where Im negative -1.1%, amazing what a few days difference does. My goal is to reach $1k in both accounts by the end of December. That is a lot of money for my situation though. I plan on just placing a large sum into my Acorns account and stopping at $1000 and just putting the automatic daily deposits on so I can focus more on spending time with Betterment. The only catch with Betterment is you have to deposit at least $100 a month if you want to avoid paying $3 a month instead of .35% of your portfolio. So right now I owe about $.14 a month instead of $3 a month. I will go way more into detail about Acorns and Betterment as I continue to blog my journey.