The ACORNS Investment App:
So Easy, Even a Squirrel Can Use It
The new mobile app "Acorns" debuted a few months back in beta form, but as of last week, it is publicly available for iPhone and other iOS devices. It's a free app that allows you to invest-as-you-go. It's designed for the millennial generation in particular - a generation that doesn't leave their phones and is increasingly using less and less "real" money and relying more on the digital transmission of currency.
The only catch is, they take $1 a month after you've deposited $5, plus 0.50% for accounts with $0-5,000, 0.25% for accounts greater than $5,000.
There have been some critics whom have voices concerns about this arrangement. The thing is, it's really not that bad of an arrangement. You're looking at $12 a year, plus up to half a percent of your earnings. Here's the thing: You need as little as 5 dollars to get things going. That's extremely low compared to most of the $1,000 minimum accounts that I've come across when trying to begin investing. It's the perfect introduction to investing for the millennial generation.
In addition to moving bigger amounts into your account directly from your bank, there is the "Round-Ups" option.
The "Round-Ups" Feature
As a recent college graduate with very little money, I see some fantastic advantages to owning this app. First, it makes me want to save money. Acorns has a great feature called "Round-Ups", a section which allows you to link your debit-card purchases and throw your change into your account. Say you go to the local coffee shop, and buy a coffee for $3.25 with your debit card. If your debit card is linked to your Acorns account, you can choose to deposit the extra $0.75 toward your fund.
The "Round-Ups" feature in itself is great. It's a simple concept, and not that much different from other services (such as Bank of America's "Keep-the-Change" program). The biggest difference here, though, is that you can throw it back into your investment account without even thinking about it.
No need to amass a great amount of wealth and move hundreds or thousands of dollars from your bank account. Just tiny amounts - slowly over time, it adds up.
A Feeling of Financial Power for Millennials
With America coming out of one of the biggest recessions in history, it is very difficult for "millennials" (individuals born in the late 1980's up through the late 1990's) to get a grasp on their finances. Many recent college graduates are trying to pay off ungodly amounts of student debt, while simultaneously trying to begin an adult life. It's nearly impossible for the average millennial to even begin to think about retirement!
This app could change all that. I really think that this tiny, little app could set the stage for something big. People with little money will finally find it convenient to participate in the market.
I anticipate many competitors in the near-future, but for now, Acorns has this market cornered.