The Acorns app is a millennial favorite, that allows you to invest your spare change in the stock market.

If you are like me, you probably have not carried cash for the better part of the past 5 years. The ease of use that comes with being a digital transaction junkie is so gratifying, but there is also a downside; one or two swipetastic days in a month and your budget can be entirely blown.

Almost everyone wishes that they would save more and invest. To this effect, there is a simple reason why investing is the pathway to wealth for so many: because it works. The richest 10% own 84% of all wealth, while the bottom 50% are left out in the cold with <1% of all wealth. The stock market is one major way that wealth is created; buying and holding on to valuable companies and riding their wave of success. Take Amazon, one of the largest companies in the world; if you had invested $1,000 10 years ago, it would beworth $16,239 today.

Many of the world’s richest billionaires’ net worth are all tied up in the stock of the companies they founded or headed. It’s how the rich stay rich and get even richer. That includes Warren Buffet ($84B Net Worth, ~$80B Berkshire Hathaway stock), Jeff Bezos ($112B, Net Worth, ~$103B Amazon stock), Bill Gates ($89B Net Worth, ~$88B Microsoft stock) and Mark Zuckerberg ($72B Net Worth, ~$70B Facebook stock).

The Rundown

For those of us who do not have the time to learn about the intricacies of the stock market or are wary of picking that one successful lottery ticket stock, then Acorns is the app for you. Acorns is a money management app that invests your spare change using a system that they call “round-ups.” A portion of every transaction you make with your credit/bank card will be invested into a basket of stocks called “smart portfolios,” also known as robo-advisors, which are based upon your risk tolerance.

Acorns is designed to be a mobile first app, so after downloading the app, the initial sign-up for Acorns will require you to sign up for an investment plan. It can be as little as $5 a month to as much as you want. When I started, I chose $20 a month figuring that I would not notice the absence of $20 a month to my monthly spending. The next step is to link a credit/debit card to your account, which allows Acorns to know when you are making purchases and helps you save a portion of your spending.

The Round-up

Here is how it works, if you make a purchase for $5.32, the Acorns app will round up that purchase to the nearest dollar (i.e. $6.00), which equals 68 cents ($6.00-$5.32). It will continue to do this every time you swipe your card. Once the spare change reaches a total of $5.00 or more, Acorns withdraws that money from a linked bank account and invests that money into one of five investment strategies: Aggressive, Moderately Aggressive, Moderate, Moderately Conservative and Conservative. You can connect as many cards as you like. You can also turn off or delete the app at any time, and transfer the money you have acorned into your bank account. The real benefit lies in watching that money grow from a few acorns into a money tree. In truth, after a while you even forget it exists, and the withdrawals are so minimal that the average person won’t be impacted by the difference.

I decided to give the Acorns app a shot back in September 2017, and over the past 5 months I have been able to sock away $450.15. I must admit, I like the idea of saving every time I swipe. The process has been easy to setup and even easier to manage. I literally do nothing other than swipe my card, while the proceeds are invested in a collection of stocks (Very Aggressive). The breakdown of the Very Aggressive investment portfolio is 10% Real Estate Stocks, 10% Emerging Market Stocks, 40% Large Company stocks, 20% small company stocks and 20% International Large Companies. To that effect, this portfolio has returned 3.61% over the past 5 months. That’s not bad considering my savings account is getting me ~1.5% annually and the stock market return on average returns 7% a year from 1950-2009.

So to be clear, your money is being invested in real companies, depending upon your investment choice. These smart portfolios were built with the help of Harry Markowitz, the father of the Modern Portfolio theory. Acorns lets you know which companies are apart of the portfolio you select. Here are some of the companies that are apart of my Very Aggressive investment strategy: Public Storage, Simon Investment Group, Tenecent Holdings Ltd, China Construction Bank Corp., Google, Apple, Microsoft, Hanesbrand Inc., Nestle, Samsung and Toyota Motor Corp.

Is it worth it?

The real question, is Acorns worth it? For me it is, because I am someone who swipes my credit card for every transaction for 2 reasons: 1) it helps me keep track of the money I spend 2) I am trying to get enough travelpoints for my next vacation to the Maldives. So here we are at the end of 5 months I have almost 500 dollars that I can either use to pay down debt, let ride out the stock market or withdraw to buy that entertainment system that I was going to charge to a credit card anyway.

An additional aspect of Acorns is that you can multiply your savings rate. You can choose 1X, 2X, 3X or 10X. To further explain, if you made a purchase for 2.73 and Acorns is going to round it up to $3.00 that means Acorns is going to invest 17 cents into your Acorns account. If you chose 3X, Acorns will invest 51 cents based on your transaction purchase.

Getting back to Acorns, I would say it’s worth a try. At the end of the day, if you want to save more money, here is a really easy way of achieving that goal.

Account Fees

Acorns is free for four years for college students with a valid .edu email address. 

For everyone else the cost of this convenience is that Acorns charges a $1 fee per month for balances below $5,000. Balances above $5,00 will be charged a 0.25% annual fee. Any way you slice it, that is a pretty reasonable cost for helping you build your savings and investing it. However, if you do not make a lot of transactions, the cost of Acorns can add up, and that $1 may work out to be as much as 8% of your savings if you make very few card transactions.

So in order to assure you get your “monies worth” I recommend making a monthly investment of $20. This will help reduce the percentage cost of that $1 transaction fee and the more you swipe the more that cost of that fee will be reduced.  Also, the bigger your balance accumulates the less that transaction fee costs you. For example, at my present balance of $450.15 cents, that $1 fee costs me 0.22% of my portfolio per month.

Additionally, Acorns offers a suite of tools to help you maximize your investing potential. Acorns will provide news articles about what is going on in the stock markets and when your investments are in the news. It may even educate you about Bitcoin and crypto currency along the way. Acorns also offers a projection about how much money you will have saved using the Acorns app moving forward.

Found Money

The found money program allows you increase your investing using other people’s money. How this works, Acorns has partnered with 100s of companies like Apple, Airbnb and Nike and Blue Apron to give you cash back when you use a linked payment method at one of its partners. Once you use an Acorns linked card to make a partner purchase, money will land in your account within 60-120 days.

Additionally, you will also get $5 for every referral that gets a friend to open an account with acorns.

Sign up for an Acorns account and get $5 :-> click here!

Happy spending!

Did you know that 1 in 6 millenials have over $100,000 saved in their bank account? As it turns out this environment loving, cord cutting generation may also be one of the most financially savvy generations over the past several hundred years. Stash is one example of what this new generation loves about technology and how it helps them to save and invest better.

Stash is an app designed to help you invest like a pro without being one. Have you wanted to invest in the stock market but don’t know where to start or how to begin? In that case, Stash may be the app for you.

Before we get started, here are few things we need to run through. The New York Stock Exchange trades over 2,800 companies from blue chips like Apple and Walmart to small cap companies some of us have never heard about. Most of the companies that you interact with on a daily basis are publicly traded companies, such as McDonalds, Starbucks, Tesla, Google and Netflix. Furthermore many of these public companies are a vehicle to achieving wealth.

Why should you invest?

There is a simple reason why investing is the pathway to wealth for so many: because it works. The richest 10% own 84% of all wealth in this world, while the bottom 50% are left out in the cold with <1% of all wealth. The stock market is one major way that wealth is created and maintained; by buying and holding on to valuable companies and riding their wave of success wealth can be created. Take Amazon, one of the largest companies in the world; if you had invested $1,000 10 years ago, it would be worth $16,239 today.

For many the stock market is the apex of wealth worldwide. Many of the world’s richest billionaires’ net worth are all tied up in the stock of the companies they founded or headed. It’s how the rich stay rich and get even richer. That list includes Warren Buffet ($84B Net Worth, ~$80B Berkshire Hathaway stock), Jeff Bezos ($112B, Net Worth, ~$103B Amazon stock), Bill Gates ($89B Net Worth, ~$88B Microsoft stock) and Mark Zuckerberg ($72B Net Worth, ~$70B Facebook stock).

What is an ETF?

Picking the right stock can feel like buying a lottery ticket for many. Stash helps you to take the guessing game out of picking stocks.

Firstly, lets get familiar with a term that is essential to understanding how Stash works. The term is Exchange Traded Funds or ETFs for short. ETFs are stocks that are invested in a basket of other stocks to help minimize risk.

Ok, I know that may sound a bit like a Russian nesting doll situation but it’s a lot simpler than it sounds. Here is an example; the Vanguard S&P500 ETF is invested in all 500 companies that are apart of the Standard’s & Poor’s Index S&P for short. Now if you buy one share of this ETF, it only goes up or down based upon the aggregate of all 500 companies. This prevents you from being at risk from one company tanking and you losing all of your money.

There are also sector specific ETFs like the TechnologySelect SPDR ETF. This ETF tracks the companies that are apart of the technology sector like Apple, Amazon, Facebook and Google.

There are sector specific ETFs for everything from Real Estate to Energy.

Why Stash?

Now that we’ve got our first lesson out of the way let’s talk money and how Stash is gong to help you save/invest a bunch of it. While the average savings account yields <1%, the stock market has returned on average 7% a year from 1950-2009.

Stash allows you to invest in the stock market by choosing the ETFs that are invested in a basket of stocks. Stash has also Millennial translated the names of these ETFs so that you understand what they are invested in.

Invest like Warren Buffet

Do you know who Warren Buffet is? Not only is he one of the top 5 richest people in the world, he is this lovable old guy who may be the greatest investor over the past 30-40 years. Many people seek his advice on anything related to the stock market.

Stash has an ETF called Roll with Buffet. This ETF buys shares in Warren Buffet’s investment company, Berkshire Hathaway, that owns shares in several other companies including Wells Fargo Bank, United Airlines and Geico. This way you get WB to do the hard work for you.

Some of the other Investment strategies available in Stash are Delicious Dividends, Clean & Green, Young Money and All that Glitters. You can find the full list of investments here:-> Click!

My Stash

I have been using Stash for the past 5 months, and I’ll admit: I absolutely love it. As someone who has been investing in the stock market for the past 15 years with several different investing platforms, I found Stash to be both fun and exciting. That may sound impossible, but the most exciting part about the stock market is typically making money. But after you have been doing it for a while, it can become quite stressful; determining when to get into a stock at the right amount, while also choosing the one stock to strike it rich. Stash takes the FOMO aspect of investing in the stock market out of the equation.

Diversification is key

When setting up your Stash account, you are prompted to choose a weekly investing amount. I chose to deposit $20 a week to invest in my Stash account. As someone who has been in the investing game for a while, I understand that diversification is key. So, I chose to split my $20 dollar investment between 4 separate Stash funds in order to provide diversification.

My first choice was an Aggressive ETF fund. Being a young person you are always advised by those in the know to take risks when you are young and can afford to. My other initial three investments were Internet Titans, Modern Meds, and Delicious Dividends. Over the past month, I have also added Colossal China and Corporate Cannabis to the mix. Here are the descriptions for each of the investments:-

Aggressive Mix

Designed to get you broad exposure to global stocks, bonds, and cash. This mix offers more stocks than bonds and cash, which could be suitable for a younger, more aggressive investor with more time to absorb risk. 

Internet Titans

From shopping, to dating, to entertainment, the Internet has changed almost every aspect of life – and it’s only twenty-something years old. These companies capitalize on the Internet’s irresistible allure. Top 3 Holdings: Amazon.com, Facebook Inc (Class A), Netflix Inc.

Modern Meds

An apple a day just doesn’t cut it anymore. These biotech and pharmaceutical companies work to cure diseases and save lives. Some of them might just hit on the next big breakthroughs. Top 3 Holdings: Exact Sciences Corporation, Vertex Pharmaceuticals Inc., Regeneron Pharmaceuticals Inc.

Delicious Dividends

When these companies generate profits, they share more with investors than most – in the form of dividends. This asset covers strong companies that consistently pay dividends. Top 3 Holdings: Home Depot Inc., Microsoft, Coca Cola

Colossal China

With innovative entrepreneurs and an ascendant middle class, China has had one of the fastest-growing economies in recent decades. This asset covers a wide range of Chinese stocks open to foreign investors. Top 3 Holdings: Tencent Holdings Ltd., Alibaba Group Holdings Ltd., China Construction Bank Corporation Class H

Corporate Cannabis

Corporate Cannabis tracks the Prime Alternative Harvest Index, which includes the stock of 30 public companies internationally that are “engaged in the legal cultivation of cannabis, or the legal production, marketing or distribution of cannabis products for medical or non-medical purposes,” Top 3 Holdings: Aurora Cannabis, Canapy Growth Corp. Cronos Group.

The return on these investments has ranged from 9.4% to -2.83%. The fact that some investments have delivered a negative return reaffirms that the stock market is a risk and that it is best to diversify your investment over several options. Overall, the portfolio has returned 4.75% ($24.92) over five months, which is a great return compared to a savings account. In total, Stash has allowed me to stash away $550.15 over this time frame.

In truth, I had even forgotten to open the Stash app over the past 3 months, then suddenly realized I had Stash-ed away over $500 dollars. That goes to show that Stash makes investing automatic, something one of my favorite authors David Bach preaches in his bestselling book 'The Automatic Millionaire'.

Half way through my stash experiment, Stash introduced the Smart Save feature to my account, which is pretty similar to the Acorns app. I still am not entirely sure how it works but the website says Smart Save calculates when you’ve got spare cash, then saves a small percent of it. You can adjust your savings rate and withdraw at any time. Also, it will never start a transfer when your balance is low. I am always interested in saving more so I signed up, and I was able to save $95.59 over that time frame.

Know your investments

Stash will also keep you aware of what is going on with your investments by providing updates about the stock market to understand why a particular class of stock is underperforming. Stash wants you to become a better investor because the better your investment portfolio does, the more likely you are to keep using the app. Stash will also send you an investing word a week to learn in order to further educate you about investing

Maintenance Fee

Stash does charge a $1 account maintain maintenance fee per month. Although there is no guarantee, my Stash account is scheduled to save approximately $1,300 over a 12 month time frame. At a $1 per month fee, the account maintenance will be about 0.9%. The more you invest the less that fee works out to be.

Summary

Stash is an investing app built for millennials, but works for just about everyone. The ease of use makes Stash a must try for anyone trying to dip their toe in the stock market investing game, but have just been too intimidated by all the experts. Stash is designed to increase your appetite for investing while reasonably minimizing risk. Stash is not the investment vehicle to make you rich in a year. Stash is designed to take a steady approach to investing your money ,with an effort to educate you about your investments along the way.

Use my referral link to sign up for Stash and you will get $5 to start your portfolio.