Investing is one of those “adult” things I’m always on the cusp of getting around to. It seems like such an I’m-wearing-a-power-suit-and-carrying-a-briefcase (à la Diane Keaton in Baby Boom) kind of task. Phrases like “diversified stock portfolio” and “multi-tier investment strategy” are almost mythical in their nonsense to my poor brain. I understand “Aegon Targaryen is the rightful heir to Westeros” with more depth. (You’re starting to worry about me, right? I promise I’m very smart and deep and all that jazz, just money-illiterate. Can I get an amen.)
But making money from money sounds like a really fun idea — and what else is my money doing? (By “money” I’m referring to the $5 I have left over after paying my rent.) So, to recap, I wanted to start investing, but I didn’t have any money or any idea what I was doing.
Turns out, there’s an app for that.
Step One: Pick Your App
After a little research, I discovered there are two recommended apps for beginners investing small amounts of money (with little to no know-how required — basically these apps are like the digital version of those yellow books “for dummies,” i.e., perfect for me): Acorns and Stash. Both let you invest very small amounts of money, offer ease of use by basically running in the background with little to no necessary input from you, and are built to work on your phone so you can “invest on the go” like a real cool person.
(I’d like to go on the record right now saying I am not a financial advisor of any kind — lol that should be obvious — and that this post is not sponsored by Acorns or Stash in any way. This is just my bumbling, money-illiterate journey into the world of investing apps. Thank you, goodbye.)
I decided to go with Acorns for a few reasons:
- Acorns invests spare change from your purchases, so you can literally just hook up your credit card once and boom, you’re investing.
- Acorns constructs your portfolio based on your risk and a questionnaire — so there’s no need for you to pick stocks. Keepin’ it as simple as possible.
- Acorns also has a desktop version available, which means you can control your account from your computer, making entering information way easier — my thumbs are very slow.
- Acorns offers “found money” — where money is invested for you if you shop at certain retailers, like Apple.
- Acorns has better branding (hey, I’m a graphic designer, it’s a fair critique).
Step Two: Setup Your Account
After entering a bunch of info into the Acorns app (does anyone else get personally offended when filling out questionnaires like this? Like why do you need to know where I live, can you just not.), I added my credit card to start investing the rounded-up change from all my purchases. I also added $5 to my account to get the ball rolling. After which I promptly lost a penny, bringing my account balance to $4.99. Classic.
Step Three: Watch the Money Roll In… JK IT DIDN’T
So, here’s the problem. I’m not making any money on Acorns. In fact, to date, I’ve lost $0.02. (I know, I know, it’s two freakin’ cents, but I was expecting to make like $10 at least, so the two cents is a real kick in the pants.)
After my initial $5 investment and setting up my roundups, I completely forgot that I had downloaded the app. It was just quietly whizzing in the background as I lived my life — in a nutshell: screaming at GoT every Sunday and staring at a computer for the rest of the time.
When I remembered I was writing this story (I’m so good at my job), I logged back into the app and got super excited because my account balance was $38.52. I was all “OH SNAP I MADE $33!!” This blaze of happy was quickly extinguished by some cursory investigation in the app. Turns out, the $38.52 was all from roundups — i.e., money I already had. No new money was from investing. Major bummer.
Still, I wasn’t going to let this setback bring me down. Maybe I hadn’t given Acorns enough time to work their investing magic on my $0.59 round-up from that Dairy Queen blizzard. So I logged back out of the app and gave it a little more time.
Fast forward to today. I currently have $157.10 in my Acorns account… but my “Market Gain/Loss” is -$0.02. SERIOUS MONDO BUMMER.
So, clearly, something was not going right. After some digging, I’ve come to the conclusion that spare change investing just didn’t work for me, personally. It’s not the fault of Acorns, or any company, simply that I don’t make enough purchases for spare change investing to pan out for me right now. Take this article on PolicyGenius, for example, that untangles the money mumbo jumbo pretty clearly: “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.”
If you’re looking to start investing but don’t have a lot of capital to work with, Acorns might be the right choice. You can certainly give it a try because there’s nothing to lose (except, in my case, a few cents). However, it might be better just to keep saving up your money in a high-yield savings account (here’s a fantastic list) until you have more money to invest in chunks (i.e., a single $500 investment, monthly deposit, etc.). That’s my plan at least. And sure, it’s not as sexy as a really well-designed (kudos Acorns designers) app, but is money really all that sexy? LOL, I KNOW IT’S SUPER SEXY but I have none so here we are.