A year ago, I wrote about my lifelong passion (some would say obsession) for spare change.
This dates back to counting the spare change and “egg money” in my grandmother’s chipped gravy boat in the 70’s and continues on today.
But here in the 21st century we don’t have a lot of cash transactions, and therefore not a lot of spare change.
Enter the micro investing app Acorns which invests your digital spare change.
A year ago, I signed up for Acorns and linked my checking account. This is my “funding source”.
Then I linked my credit card. You can link more than one card including debit cards.
For every transaction on the linked card and the funding source, Acorns “rounds-up”.
For example, I went to the grocery store this morning and used my credit card. The total was $31.91. The round-up will be 9 cents.
When the round-up total gets to $5.00 it is withdrawn from the funding source account and invested in the low-cost ETF portfolio of my choice at Acorns.
If I have an even dollar amount transaction, for example, $40.00, the Acorns default is to round up a whole dollar. This didn’t make any sense to me — a dollar is not spare change! But it is adjustable. I changed the whole dollar transactions to round-up 10 cents.
The fee is $1/month. This is deducted from my checking account. It does not reduce the balance in my Acorns portfolio.
Today a year later, this is my Acorns account history:
My account value is $434.65.
$26.01 (6.37%) is market gain. This gain includes reinvested dividends and appreciation of the shares.
*Note this data does not take into account the $1/month fee.
You can see the balance line has a “stair step” pattern, especially pronounced at the beginning. This is because each contribution early on sharply increases the total value.
Later as the balance gets larger, the contributions have less of a pronounced effect and the gyrations of the market become more apparent.
There are five portfolios to choose from ranging from “Conservative” to “Aggressive”.
I chose Moderate which is 60% stocks and 40% bonds.
The portfolio is well diversified across several asset classes and Acorns rebalances regularly.
I’m pretty tickled with this.
I have $434.65! Beyond the initial set up and adjustment of the whole dollar round ups, I’ve done absolutely nothing. I rarely look at it. Everything is automatic.
Obviously I’m not going to get wealthy doing this. But I love the idea of automatically saving and investing amounts so small that I don’t even notice.
Of course there could be a huge market downturn and the number will go down. Then I will be buying stocks on sale.
I don’t have a plan for this money yet.Maybe I will wait until it gets to a certain dollar amount and then cash it in to do something really “splurgy”. This will incur capital gains tax.
For now I’m content to keep rounding-up and auto investing.
It’s a glorious age we live in when a mere $5 gets you a diversified stake in the wealth creating power of the global capital markets! This certainly was not the case in the 70’s when I was counting egg money on the shag carpet at my grandmother’s house.
*I do not have any affiliation with Acorns
