February 2016

Acorns mobile app

Ah, so cool, an app that takes my loose change and invests it for me.

While I get excited about choosing a stock to buy when I hit my itty bitty $2,000 - $5,000…the temptation of using an app that invests my money using a diversified portfolio was just too much to resist.  I downloaded and joined Acorns.

It's fun to check in every week or two to see where my investment total is sitting in Acorns (it calculates it all itself and provides these very attractive graphs…amuses me to no end).  

I selected the biggest risk available 'Aggressive'…I chose to do this because only some of my cash is going into Acorns the rest is spread over other stocks.

I have a decent emergency fund, I have decent super, so while it is technically a risk to select Aggressive, I'd like to see what it does.

Update July 2016

I've been using the Acorns app for a few months now and the return overall is 1.70%.

Given the short term nature that's not bad for a set and forget investment. Then consider the Aussie stock market over the last few months which has been all over the place.

With round ups I probably average about $40-$50 a month contribution wise plus my original $2,000.

Dollar wise if I cashed out now it would have made me about $40 - $50.  Doesn't sound like much but is more than if it sat in my bank account, or worse, if I spent it.

I had a look into the investments for the Aggressive portfolio and mainly it's a couple of ETFs (exchange-traded funds) with bonds making up some of the rest.

I will in the next month close the account and invest the money myself via stocks on my to buy list or an ETF.

My reason is I don't mind actively managing my own investments, I find it interesting. And ETFs charge fees. The ones used by Acorns charge low fees (lower than Vanguard at the time of writing) which is great.  However, if I then factor in the Acorns fees then it really is eating into my compound earnings. So for me it makes more sense to invest the funds myself.

For people who aren't comfortable buying stocks themselves and who aren't able to save up chunks of cash to invest then Acorns isn't a bad idea to start off...get your confidence and watch compounding work it's magic.

You can literally set and forget with Acorns, however, if you're feeling curious about your investment the app lays out all the data in a lovely easy to understand format that can give you at any point your earnings/losses. You can also liquidate really easily which isn't always the case if you buy shares via an exchange.

To create wealth though you need to regularly contribute to it, otherwise it won't snowball over the longer term (bless you Buffet).

If you wanted to park your money in no brainer ETF it might be easier to save chunks of about $2,000 -  $5,000 and buy something like VGAD.

BTW, I'm not a financial advisor, I'm just an average smo doing her best to invest in her families future....and I wouldn't touch a financial advisor with a barge pole ;)

xox