How to Make Money Investing with Acorns
Investing can seem daunting, especially for beginners. However, with the rise of micro-investing apps like Acorns, it’s now easier than ever to start building your investment portfolio. In this guide, I’ll walk you through the process of making money with Acorns, from setting up your account to understanding how it works.
What is Acorns?
Acorns is a micro-investing app that allows users to invest small amounts of money automatically. The app rounds up your purchases to the nearest dollar and invests the spare change into a diversified portfolio of ETFs (Exchange-Traded Funds). It’s a simple and convenient way to start investing without needing a large amount of capital.
How to Sign Up for Acorns
Signing up for Acorns is a straightforward process:
- Download the Acorns app from the App Store or Google Play.
- Open the app and create an account by entering your email, creating a password, and providing some basic information.
- Link your bank account or credit card to the app. Acorns will use this information to round up your purchases and transfer the spare change to your investment account.
- Choose your investment goals and risk tolerance. Acorns offers five different portfolios, ranging from conservative to aggressive.
- Set up your initial investment. You can start with as little as $5.
Understanding Acorns’ Investment Strategy
Acorns uses a smart algorithm to invest your spare change into a diversified portfolio of ETFs. Here’s a breakdown of the different portfolios and their investment strategies:
| Portfolio | Investment Strategy |
|---|---|
| Conservative | Focuses on stable, income-generating investments like bonds and dividend-paying stocks. |
| Moderate | Allocates a mix of stocks and bonds, aiming for a balance between growth and income. |
| Balanced | Invests in a mix of stocks and bonds, with a focus on long-term growth. |
| Growth | Allocates a higher percentage of investments to stocks, aiming for long-term capital appreciation. |
| Aggressive | Invests heavily in stocks, aiming for high growth potential. |
Acorns rebalances your portfolio periodically to ensure it remains aligned with your chosen strategy.
Additional Features of Acorns
In addition to micro-investing, Acorns offers several other features to help you grow your wealth:
- Round-Up: As mentioned earlier, Acorns rounds up your purchases to the nearest dollar and invests the spare change.
- Acorns Spend: This feature allows you to link your credit or debit card to Acorns, and the app will automatically invest the cash back you earn on your purchases.
- Acorns Later: This feature helps you save for long-term goals like buying a home or paying for college. You can set up automatic transfers to your Acorns Later account.
- Acorns Foundry: This is Acorns’ incubator for new investment ideas and products. Users can test out these new features and products for free.
Is Acorns Right for You?
Acorns can be a great tool for beginners and experienced investors alike. Here are some factors to consider when deciding if Acorns is right for you:
- Low Minimum Investment: Acorns requires a low minimum investment, making it accessible to those with limited capital.
- Convenience: The app is easy to use and allows you to invest on the go.
- Diversification: Acorns’ investment strategy ensures your money is spread across various assets, reducing risk.
- Costs: Acorns charges a 0.25% annual fee, which may be a concern for
