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Micro-invest your spare change with Acorns app


Acorns is a new app that allows its users to invest spare change without the pressure of having to know much about investing and the market. Many people say that they want to invest, but claim to not to have enough knowledge or the money to do so. 

With only 17 states requiring any classes in financial education in high school, it is no wonder America’s younger generations are struggling to save and invest. 

It was reported by the Federal Reserve that as many as 42% of non-retired adults under 30 have no retirement savings.

The past decade has seen the rise of dozens of investment apps. There were attempts to create opportunities for the not-so-market-savvy, time crunched and twenty-somethings to get started on their nest eggs.

Acorns, in particular, stresses an extremely hands-off approach in which users are able to invest spare change in the form of rounding up each purchase they make with a particular card. 

These micro-investments are then placed into a portfolio of Exchange-Traded Funds, a fund with a mix of investments in stocks or bonds of the user’s choice. 

These choices range from a conservative option consisting solely of bond investments, to more aggressive strategies that are more reliant on the prices of stocks. 

“Whenever I buy something, say it costs $10.68, I’m never going to miss that $0.32. I never notice it, but at the end of the month, those round-ups really add up,” says Angel Torres, an Acorns user, about this feature.

Users can even schedule automated deposits into their accounts at regular intervals to help them achieve their savings goals faster. 

The app also comes with features that estimate the money the users will have in 2, 5 and 40 years. Acorns management fees start at $1 per month, which is waived if signed up with an active “edu” email address.

There are similar investing apps making small scale investments possible such as Stash and Robinhood. 

Both of these apps offer increasingly more hands-on approaches to novice investors looking to put more time and effort into their investment decisions. 

Stash, while very similar to Acorns, has users select a mix of stocks and ETFs to add to their portfolio from a list of recommendations. 

It has a similar low bar of entry at $5 by allowing users to invest in fractional shares. Robinhood, in contrast to these other two, gives full control of the investment choices by allowing users to autonomously buy and sell most stocks, options and ETFs. 

While Acorns and these other investment apps can be a great place to start for new investors, it is a good idea to diversify savings and do research on alternate options. 

It might be beneficial to consider looking into traditional savings accounts, certificates of deposit, IRAs and other possible opportunities. 

Editor’s Note: Angel Torres is the former copy chief of The Ticker.

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