What is Acorns Investment and Is It a Scam?

We, as humans, are usually cautious about where we put our money (the Bitcoin is an exception to that rule). So, when something like the Acorns investment app comes out, people are immediately asking, “Is Acorns Investment App a Scam?” Let me answer that.

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I Did My Own “Is It a Scam” Search

Back at the beginning of 2016, I did my own Google search on Acorns. I had heard about it before but wasn’t sure I trusted it enough to actually use it. After all it wanted my bank account information – red flag!

The reviews I found online were mixed. Some sang its praises while others were pessimistic and saying it was a rip off. Being the adventurous type, I decided to silence the naysayers and give it a shot. My comfort was if the company was a scam, I would be able to join the millions of other users in filing a lawsuit.

After about the first 6 months of using Acorns, I felt comfortable enough to render my verdict: It was not a scam. In fact, I might have had a small case of rose colored classes for the Acorns app.

So no, Acorns is not a scam AND no, it is not free BUT yes, it can help you save for the future and retirement effortlessly. Let’s dive in.

How Acorns Works

Acorns works automatically, behind the scenes which is why I like it so much. All you have to do is link your bank account and any other cards to your Acorns account. Acorns will then “round up” each transaction on your cards to the nearest dollar. Once the “round ups” add up to over $5, it will withdrawal the amount from your checking and place them in an diversified investment account.

Example: You spend $4.23 at Starbucks. $0.77 is “rounded up”. You then purchase lunch for $10.50 at the work Cafe. That means $0.50 is added to your “round up” balance. That’s $1.27 in just one day! If you keep repeating that cycle then after 4 days $5.08 will come out of your checking and be placed in an investment account. How great is that?

You can also customize it to pull out a set amount per month (which I’d recommend doing if you really want to see your investments grow). This means that you can tell Acorns to pull $20 extra a month out of your checking on top of the round ups.

Now that you’ve got your funds moving to Acorns, what happens to it? Acorns gives you the choice between 3 stocks and bonds portfolios. You can choose to be safe, moderate, or aggressive. Based on your choice, Acorns will use your money to buy a set of stocks and bonds. Did I mention all of this is automated? So your $5.08 gets withdrawn, deposited, used to buy stocks, and then starts earning interest without you even lifting a finger!

And yes, you can withdrawal your money! Obviously the goal is to save the money, but if you need it you can withdraw. It does take about 5-7 days so you’ll have to be patient.

How Much Does it Cost?

The price breakdown is really simple:

  • It costs $1 a month for the basic setup (which is what I use).
  • It costs $2 a month to add an IRA account.
  • It costs $3 a month to have the basic account, IRA account, and a checking account.

How Much Can You Make?

You can make a lot or a little! You need to know that Acorns will not guarantee a profit. You could lose money because your money is tied to the stock market. However, on average the stock market will earn you money if you stay with it and don’t lose your head!

Over the past 3 years, I have made between 5-10% each year. That’s just me and is not a guarantee of what you will make.

Who Should Use Acorns?

Not everyone should use Acorns. Some people can definitely earn a higher rate of return managing their stocks through a broker or even on their own.

But the point is not really about getting the most return on your money. It’s about saving money for the future.

I think the best way to look at Acorns would be to see it as an automated savings app. So, if you have trouble putting away money, this will automatically do it for you. Your account will also earn some interest as an added bonus.

I think anyone just starting out should use it and DEFINITELY anyone who has trouble saving their money.

How to Join

Joining Acorns is easy and just requires $5! Simply click here to get started.

Leave Some Comments!

Please leave me some comments, questions, or your own experience below! Thanks!