My curiosity got the best of me and I went ahead and opened an Acorns account. Mainly because these Acorn backers are so starved for business that they are going to give me a $1,000 bonus (and $5 each referral) if I can get 12 people to use my link before the end of May 2018. Please use my link here if you are at all interested: https://acorns.com/invite/NPJQY7. I for one think that Acorns is really fucking expensive with a fixed management fee of at least $1 a month up to $4,999.99 invested. Investing more than $5k means paying 0.25% per year which is at least$12.50. This may not seem like a lot, but for their target audience of newbie investors with small balances (less than $5k), this is very expensive. I will explain after I show how the
scam innovative depositing works.
The basis of this account is to monitor and round up all your credit card or debit card transactions of the linked bank, and take the difference as a digital piggy bank deposit. BoA did this first in their program “Keep The Change” to encourage dumb money to invest in any way possible. They used to match as an intro offer but enterprising people like me would buy $0.01 stamps at the post office to maximize the match.
BoA gives an example of what you can put away as savings on their site. Let’s say you do and buy all of this stupid shit every week:
Great, so it takes you an entire fucking year to put away $286.52. For most of us this is barely enough to buy a single Prada loafer, maybe just one bottle of Dom.
However the target audience for Acorns only puts away $60 a month, and that seems like a good start for your savings for a car or whatever. From the policy genius website:
If you make 50 transactions each month with an average of $.25 rounded up per transaction, you’re only investing $12.50 every month. At that rate, Acorns’ monthly fee is taking away 8% of your contribution to your investment portfolio in your first month.
So Acorns it is an intricate system
to rip off the poors encourage automatic savings and investing at a fee that is really high for small balances. All you Active Duty all are better sticking with just putting away 5% of your base pay for 5% match right into a TSP LifeCycle fund at 0.04% management fee. The same $286.52 would only cost you yearly, 11.4 cents on TSP vice 1,200 cents on acorns (110 times more expensive) and it would be just as diversified.
Bottom line if you really want to save for retirement, DO NOT SIGN UP FOR ACORNS if you haven’t maxed out your TSP at $18,500 a year! For non-retirement savings, I would use Commission Free TradeStation right into cheap ETFs like SPY, QQQ, DIA, GVAL, SVOB and balance them as needed.
Now for the fun side of Acorns, I don’t totally hate on it. The interface is completely dumb money proof:
From the first click to the account approval, it can all be done in 10 clicks tops! Just a few questions on goals and risk tolerance you end up with a robot portfolio displayed all fancy like a video game:
It then further breaks down the portfolio in simple english terms:
You can go to the dashboard and deposit funds directly as well, I did $10 so it would not all go to zero before the end of the year!
You can also do a monthly deposit, but I won’t because I am going for the $1,000 bonus then adios!
After setting up my account, I only wonder why TSP could not have been this easy to set up. When this company goes out of business I hope the good folks at TSP.gov use the code to encourage the E-1 to put that 5% away of base pay with a match with just a few clicks of an iPhone App. The interface is nice and clean, videos are easy to view, and the language is very encouraging. Breaking down the balance of the portfolio in simple terms is what TSP lacks. Kudos to Acorns in brining a balanced investing scheme to the masses, but too bad for the high fees compared to TSP and many commission free ETFs out there under 0.25%.
In the meantime, if you know 12 churners ready to make $1,060 bucks (12*$5 BONUS WITH $1,000) paying only $12 in a year of fees, then please go ahead and use my link to get started. Once I hit 12 referrals I will open up the comments section for hosting reader links!
For those seriously considering Acorns as an actual investment, there is an excellent go-by here on how to really churn the application. For the rest of us, get on the Acorn MLM and getting a head start on this reverse funnel investment! You know $1,000 can buy you plenty of stupid shit.