Squirrel away money for the future with Acorns — one purchase at a time

squirrel with nut
Image Credit: Rob Stothard/Getty Images

It’s a new day for investors thanks to a fresh crop of financial technology companies that let you start investing with just a tiny bit of money right from your phone.

One of the leaders in this field is Acorns.

For a minimum investment of $5, Acorns gives you access to a variety of low-cost exchange-traded funds (ETFs).

But what really sets the free app apart from competitors is the ability to do “round up” investing with little dribs and drabs of change.

Read more: 6 ways to start investing when you only have $100 or less

Acorns turns spare change into financial security

Let’s say you buy something for $8.14. Acorns will automatically round the purchase up to $9. Then it takes that extra 86 cents and puts it in savings. Every time you hit the $5 threshold in your account, Acorns takes your money and invests it for you.

Hence the company’s name; think about squirrels stockpiling their food for the winter, one acorn at a time!

Of course, there is a fee structure in place for the service and it will likely limit your gains during your early years of investing.

Acorns charges a fee of $1 a month for account balances less than $5,000. But once you cross that 5K mark, you’ll only be charged 0.25% of your balance, which is very reasonable.


The ease of investing is part of what’s made Acorns one of the fastest growing of a new breed of fintech providers.

According to TechCrunch, Acorns boasts two million investment accounts and is on track to complete 1 billion trades by the end of the year. Approximately 600,000 of those accounts were opened in 2017 alone.

Its next nearest competitor, fellow fintech startup Stash, has more than 850,000 user accounts on the books. Some 500,000 of those are newly added so far this year, so Stash is growing at a fast pace as well.

Remember the 4Ds of investing

Young investors should always keep sight of the 4 Ds of investing: Discount, dollar cost averaging, diversification and dull.

Money expert Clark Howard is fierce about keeping costs low when you invest. That’s why he loves a litany of discount investment houses.

Dollar cost averaging, meanwhile, is a fancy way of talking about contributing set amounts of money on a set schedule — as you would through your employer’s 401(k) plan. Acorns offers the ability to automate your contributions in this recurring fashion in addition to using the round-up method.

Diversification is the idea of not putting all your eggs in one basket. On the simplest level, it means spreading your money out among both domestic and international investments and both stocks and bonds.

Finally, dull is an investing mantra for the ages. As a general rule, you should seek to own plain vanilla index funds that in turn owns tiny slices and dices of hundreds or thousands of publicly traded companies.

That may not sound as exciting or sexy as piling all your money into one stock and letting it ride. But it’s a whole lot safer over time!

Read more: 6 positive attitudes that self-made millionaires share


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