I recently decided to start an Acorns account and I couldn't be happier that decision coincided with Acorns announcement of their new $1,000,000 sweepstakes contest.
This is an opportunity to help save and invest in my future, yet have a little fun by participating in a contest with a chance to win $1,000,000.
If you are unfamiliar with Acorns, they are a company that connects to your financial accounts and automatically invests money for you based on your spending. In other words, one of their main features is to round up every one of your purchases and invest the difference for you, so they are effectively investing your "spare change".
For example, you spend $4.25 on that Starbucks coffee with your debit card or credit card that is linked to your Acorns account. Acorns will then automatically round this purchase up to $5 and invest the extra $0.75 for you. The best part is you don't even have to think about it. It's automatic savings and over time this exercise will grow to large amounts of money.
It's very similar to the idea of making the same purchase in cash and using the $0.75 in coins you just got back and putting them in a piggy bank to be saved for something later.
Only, with Acorns it's linked to your bank account or credit card account and the "piggy bank savings" are invested in the stock market automatically for you. It's the classic piggy bank, only on steroids.
Of course, Acorns has expanded into other services as well to become more of a full service investment company. They now offer recurring automatic investments, retirement accounts, family plans, and their own debit card with rewards just to name a few.
However, their main feature of rounding up and investing your spare change still remains their most attractive feature, in my opinion.
Now, if you are a disciplined saver and investor you might be asking yourself why get an Acorns account when you already work to diligently save money out of every paycheck and at the end of every month?
This is the same question I asked for a while now and the reason it has taken me so long to commit to an account.
I actively invest in my Vanguard accounts with every paycheck and diligently track my spending and investing. If I'm doing that properly, then wouldn't I already be investing my "spare change?"
I think the root of that answer lies in human psychology. I believe humans tend to operate in nice even round numbers (or at least I know I do).
For example, if I'm consistently saving $250 out of every paycheck and I find out at the end of a month that I have an extra $3.22 that is available, how likely am I to start increasing my investment contributions an extra $1.61 (two bi-weekly paychecks in a normal month to total the extra $3.22 for the month)?
In my personal experience, not likely. I just let that money sit in my checking account and roll over to the next month. My guess is a lot of other people operate in a similar fashion.
Also, when you are ready to increase your automatic contributions to your investment accounts, how likely are you to increase it by a random or odd number? Continuing my previous example, if I'm contributing $250 out of every paycheck, I'm unlikely to increase that contribution to $255, or $262 per paycheck. I'm likely to choose some number that makes sense in my head, maybe $275, or $300, or $350.
And if I'm waiting until I'm comfortable to increase my savings to one of those numbers that feels better in my head, I might be missing out on months or years of extra contributions I could be making if I were super diligent in investing my spare change. But most people don't operate that way.
Just like retail has figured out you are more likely to buy something if it's $1.99 vs $2.00, I believe people are less likely to invest their spare change when it's available. I'm not going to consciously make sure I go invest $0.75 every time I spend $1.25.
That's why I believe Acorns can be a powerful tool. It does this automatically for you without you having to think about it. Over time this can and should add up to large sums of money for you and can be easily done outside of your normal savings and investment plan.
As an example, when I log into my Acorns app they have a nice "Your Potential" tool built in. This tool shows a nice up-trending graph of your potential based on your current account settings. I have my account currently set up to make automatic round ups and also a $5 monthly reoccurring automatic investment from my bank account. My account is also set up to be invested in their most aggressive portfolio.
Based on my current age of 29, an assumed 6% growth rate (which I feel is conservative long-term), my $5 monthly contributions, and my estimated rounds ups they are predicting that my account will have a value of $72,704.07 when I reach the age of 69.
One of my favorite features of this tool is how I can easily place my finger on my age and drag it around to see different results. If I push the age meter out to 72 instead of 69, then Acorns is estimating my account value to be $93,782.
Those are huge amounts of money for just rounding up my purchases and contributing an extra $5 every month! And have I mentioned it's all automatic and you don't have to think about it?
I consider it akin to good cash back credit card or a good travel rewards credit card. Used properly, it can be a nice financial tool to add to your tool belt. Every time you decide to make a purchase you are also making a small contribution towards a healthier financial future. Some of the best financial decisions you can make are rooted in being automatic and not having to think about them.
Things such as automatic investment contributions, automatic debt payments, and automatic credit card payments are all tenets of a strong personal finance plan.
Automatically investing spare change with every purchase is just another personal finance tool that you can add to your portfolio that will have a nice long-term compounding effect.
So, with all of that being said, if you want to start your own Acorns account you can do it here at this link:
If you use that link to sign up, you will receive a free $5.00 to start your account and I'll receive $5.00 for referring you to sign up, so it's a win-win. Additionally, once you sign up, Acorns will give you your own link to invite your friends to sign up and you can earn another $5.00 that way and so on and so on.
And that leads me to the $1,000,000 sweepstakes and why now is a great time to sign up for Acorns for the first time.
Acorns is running this sweepstakes from January 25, 2021 to December 15th, 2021 and you earn entries by doing the things you would already be doing with your Acorns account, anyhow.
For example, if you set up your account so it automatically rounds up your purchases, then each time you achieve 10 round ups you will automatically get 1 entry into the sweepstakes.
Or, if you set up a recurring automatic contribution to your account you can earn 1 entry per month for a maximum of 12 possible entries (since the sweepstakes starts in January and ends in December). These are just a few examples and there are A LOT more ways to earn entries into the sweepstakes.
And the best part is, if you don't win, it doesn't matter because everything you were doing to earn entries is an investment in your future, anyway. So, in a way, it's like gambling, only you "can't lose."
Sure, you might not win the $1,000,000, but it's not like you lose the money you contribute to your Acorns account in an attempt to win it, because those contributions are being invested for you.
A full list of the rules and how to participate in the sweepstakes can be found on their website here:
If you're new here then you might not know that I like to track things. I like to track my net worth, my investment contributions, my Roth IRA balances over time, the dividends I'm earning, etc. I see this as another opportunity to track something fun.
So, I've decided to track and report on my Acorns balances over time and for this year I will also report on how I'm doing with my entries into the sweepstakes. It will be fun to watch the funds grow and my entries into the sweepstakes grow over the course of the next year.
All in all, I find Acorns to be a nice tool to save and invest more money without having to think about it. I think anytime a financial product can accomplish this, then it's an A+ product in my book. The fact of the matter is people don't save or invest enough money. This tool helps change that and therefore I'll advocate for it all day long.
Do you have an Acorns account? If so, tell me about your experience below! Otherwise stay tuned for more updates!