Acorns lets anyone try investing out
Money made simple with Noel Whittaker
Noel Whittaker is the author of Making Money Made Simple. His advice is general and readers should seek their own professional advice before making any financial decisions. Email: firstname.lastname@example.org.
I HAVE long wished for some simple investment strategy that could be used by anybody with a few dollars to invest, where investment could be automatic, and where your money could be placed in share-based investments without the hassle of going through a broker, paying brokerage or trying to save a big lump sum to get going.
I'm delighted to announce that such a strategy is now at hand in the form of a new product called Acorns.
It offers low fees, no minimum balances, and the ability to deposit and withdraw any time.
You can make investments using lump sums or recurring deposits (daily, weekly or monthly), but a feature that particularly appeals to me is "round-ups". This helps people to save and invest their small change. For example, if you bought a cup of coffee for $3.50 on your credit or debit card, Acorns can round that up to four dollars and invest the surplus 50 cents in your Acorns investment account.
Acorns is far more than just a method of investing small sums - it is also a brilliant educational tool. You can roam about the five investment categories and look at how the portfolio changes as you change your risk level. If you decide to use the program as a saving tool it will give you a projected balance at any date in the future you choose.
I also see it as a major tool for retirees who are risk-averse. I regularly receive emails from retirees with over $400,000 in the bank who are too scared to move it into shares in case the market falls. They could get invaluable experience by moving, say, $30,000 into Acorn and watching how it performs. There are no entry or extra fees, but of course the investment will move up and down in line with the performance of the underlying assets
This is one of the greatest products I have seen in my career. I suggest you have a look at acornsau.com.au.
It would make for some wonderful conversations around the dinner table.