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ROUND AND ROUND, UP A DOLLAR OR POUND!

I’ve noticed a recent trend in the checkout line. Often, the cashier will ask me if I care to “round-up” my purchase to the next highest dollar, donating those extra cents to whatever worthy nonprofit cause is on their docket.

I donate about half the time, based on either the last time I donated, how far from a dollar I rounded up last time, how near the next dollar is this time, or the cause at hand. Overall, I think I’m a fairly decent round-up donor. Recently though I’ve become aware of a new service that might veer a few of those round-ups my way.

A company called Acorns acts in the same manner except the rounding up goes to my personal Acorns account, where it is automatically invested, and regularly re-balances, in an ETF investment portfolio of my choosing (i.e., conservative-to-aggressive in investment style), developed by an Nobel Prize-winning economist and backed by investment market leaders including Vanguard and Blackrock. In addition, Acorns, through it’s “Found Money” offering, has partnered with an array of businesses who will automatically invest in your account when you make purchases with them. All of this done from one or all of your credit cards. All for about a dollar a month; free to college students with a valid .edu email account. Amazing.

Acorns’ mantra is “anyone can grow wealth.” While micro-investing had, up to now, been focused on developing countries, Acorns is the first to use smartphone-based app technology to make micro-investing easy for today’s Millennials, who according to today’s popular press, are skittish of investing in stocks and bonds. Acorns appears to be playing an important role in alleviating fears and misconceptions of investing, as well as prerequisite saving, for today’s young adults.

What’s most amazing about Acorns is not necessarily the amount of money one will save using the investing app, i.e. it’s literally spare change that one invests―instead, Acorns helps people, day by day, learn the good habits of becoming a saver, and not a spendthrift, over time. It develops good saving and investing habits. This is an invaluable lesson, especially for younger people who may find investing daunting or challenging given their current limited means.

As people further use the app, they may be more likely to take advantage of other services Acorns offers, such as its “One Time” or “Recurring,” where people can add any amount of money to their portfolio in either a lump sum or regularly, respectively. They can even receive a bonus to their portfolio when they refer friends and family to Acorns, thereby becoming stewards of the brand.

The most valuable tool to successful investing is the “time value” of money (TVM)―that a dollar today is worth more than a dollar in the future; a dollar invested today will earn, over time, interest and capital gains that increase its worth. Almost as important is understanding, at a young age, the principles set forth in TVM, for the earlier one learns to be a regular saver cum investor, the more one reaps over time.

As we all know, money begets money, and the route to becoming a millionaire is thinking and behaving like one today, even if it’s with the thirty-five cents left over from an afternoon coffee purchase. Understanding this, Acorns also now offers “Acorn Later,” a retirement-oriented IRA account. Anyone can now save for their future, anytime.

Millionaires aren’t ‘hatched’ and most don’t inherit their dough; they learn how to earn. And from acorns…

 

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