How to Invest with Just Spare Change

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Investing is one of those terms that makes a lot of people cringe. Whether you have been on the bad end of an investment or never been bothered start, investing can have a polarizing effect. If plans like 401ks, Mutual Funds, Roth or Traditional IRAs are ones you typically avoid but, know deep down you should be actively investing in, then this is the article for you. We will review a new and nearly effortless option for beginning your investment portfolio and learning how to invest.

Who is investing and what are the options?

According to a 2015 Gallup Poll among 18 and older US consumers, 55% own stocks, this number increases with income. See below for the some of the more common investment options and their average rates of return and risk levels.

Investment Criteria

Savings Accounts

Money Market Accounts

Certificate of Deposits (CDs)


Mutual Funds

Individual Stocks

Return on Investment (ROI)

Around 1.0% Up to 1.11% Up to 2.25% Up to 5-6% 2%-10% 7%~

Risk Level

Very Low Low Very Low Mostly Low Moderate-High High

FDIC Insured

Yes Yes Yes No No No


Easy access to funds when needed; Can get started with little to no funds for most accounts Traditionally higher ROI rates versus Savings Accounts and still retain easy access to your funds Traditionally higher ROI rates versus Savings Accounts Higher return rates of return and lower risk than individual stocks Diversification of invested funds across multiple companies; Handled by financial professional; Highest returns when selected correctly compared against other options


Lowest returns in the investment industry Among the lowest returns on investment Investment dollars are locked up for a specific period of time (the longer duration, the higher the ROI) ROI rates are dependent on market interest rates Capital gains, fees and other taxes; Riskier than other options Highest rate of risk; Trading fees per stock purchase

What if I don’t know how to invest or am not ready for any of these options?

If the options above seem daunting or maybe just flat-out boring, then meet the new investment service from Acorns. This service works by connecting purchases from your credit/debit cards and/or various spending accounts to an investment profile. The purchases are rounded up to the nearest dollar amount. These “Round-Ups” as they are coined, are collected in small increments and deposited into an investment account. For example, buying a cup of coffee for $3.49, Acorn will round your purchase up to $4.00, taking the $.51 difference and transferring it to the low-cost and maintenance account.

Why should I use the Acorns service?

Acorns App Logo

If you want to simply start or begin learning how to invest with the least minimal path of resistance than the Acorns service is right for you. Like the cheesy rotisserie oven infomercial, using Acorns for investing is as simple as “Set it and forget it!”. One of major benefits is manner in which the deposits are collected. By using your spare change from transactions lightens the financial burden for most users when compared to traditional investing services that collect deposits in lump-sums.

What is Acorns investment strategy?

When setting up an account you will be given the option to determine the investment risk strategy which you are most comfortable with. The service will base your personal investment strategy from the selected risk allowance, the higher the risk, the greater the ROI opportunity. Here is a snap-shot of the “Moderate” risk category Acorns uses:

Acorns Portfolio Preview

What are the fees?

One of the major benefits of Acorns investing app is the simple and low fee schedule. Outside of Savings Accounts and CDs, the Acorns service ranks among the lowest for investing costs. Here is a screen shot from their website displaying the simple fee structure:

Acorns Fee Preview

How it’s working for me?

I signed up for the Acorns investing app January 1st of 2016 and seeded the account with an initial $100 startup investment. Just recently I also incorporated a weekly reoccurring deposit of $5 to help grow the account even faster. Here is my performance thus far:

My Acorns Performance

The primary growth of funds in the account have come from the Round-Ups seen here:

My total Acorns Round-Up

Here are some example purchases in which the Round-Ups were made:

My Acorns Round-Ups

Final thoughts

The Acorns investment app is an easy and convenient service that has helped me improve my personal investment strategy. While I do have a funded 401k and Roth IRA I am intrigued most by the spare change investing practice of Acorns. The cons in my opinion would be for seasoned investors who already knows how to invest and prefers greater control of funds selection process. From what I gather Acorns’ target audience is aiming towards new investors so this drawback is not as significant. If this article has been helpful and you are interested in learning more visit the Acorns website and use invite code HD45U5 to receive a $5  startup bonus.



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