Financial investment question/ Acorns spare change

Aspie_Rocco

Not a promotion, a genuine question!!! It’s related to “spare change” and I more faith in the wisdom found here than I have in random ad and articles. I want the opinion of members here. So I ask in the coin forum. I hope this is ok.
I do not usually do much in the way of stocks and investment and prefer metals.

I got the invitation from paypal to try out their Acorns spare change investment deal. I decided to experiment with it.
Basically it’s an investment concept for young people who don’t usually play the stock market or make long term investments. A way to enter the stock markets with minimal funds deposited.

The spare change from your daily electronic transactions gets deposited into an investment fund. One can also do monthly deposits or at anytime with paypal balance or bank contributions. It’s attached to my PayPal summary.

I set it up and have added to it over the last 3 months. It has performed negative consistently at about 2% loss over the entire 3 months. I checked the link on paypal today and it is again down.

I realize this is supposed to be long term, and it is a relatively unknown territory for me, but I cannot help but feel reluctant to leave my money there. Here is the distribution of funds

What do you folks think about this concept, program, idea?

tommy44

Looks like you are in the "Moderate" portfolio.

What are the costs? Looks like Acorn only charges $1 a month but do they also charge a fee for each investment you make, (a commission)? Does your employer pay the fees?

What are the stocks? Looks like ETF's, fees on those very all over the place, some high, some low.

What are the bonds? Looks like ETFs also and with anticipation of today's Fed rate hike and a probable hike in December most bonds funds have trended lower which may have accounted for the majority if not all of your loss so far since 40% of your funds are in bonds.

I'm not familiar with Acorn but I'd say regular periodic investing in the market over time is better than not investing at all.

That's my 2 cents worth and that's probably about what it is worth.

PQueue

Not familiar with the "program" other than what you state. My reaction is that anything that helps a person save is a positive. Forget it for a while and let your spare change grow. It should outperform your coin "investments".

RogerB

Request a prospectus, then read it and ask them questions about anything you don't understand. No one here can, or should, give you financial advice.

AUandAG

Typical Mutual Fund that tries to not lose or make money. This is targeted to young people? REALLY? Young people (under age 40) should be in stocks or funds that are aggressively making money (risk is tolerated).
Never put money in bonds, emerging markets or International. Too many good USA companies to invest in that make money hand over fist. How can any fund justify itself when the market is at an alltime high? Are the fees reasonable? What costs are associated with this fund?
Save your money and open a TDAmeritrade account and buy stocks in great USA companies, for the long term.

Just my two bits.
bob
Some great US (and overseas) companies that make money and their stock is likely to rise with time.
MSFT
CAT
FB
AMZN
BA
LMT
RTN
AAPL
HON
CSCO

Aspie_Rocco

Yes I did choose the most moderate fund. My military TSP plan was always in safe government moderate funds as well.

It is not employer related, it’s just something paypal offered or still offers.
As far as I know there are NO fees for depositing one time, or recurring. I think there was possibly a $1-2 fee in the beginning, yet I think paypal covered it. But overall there is no transaction fee, because it can be linked to credit or debit cards to save all change from purchases. There might be a monthly fee but I haven’t seen the balance go down other than the +-2% loss.

I get constant emails about “found money “ businesses that will kick back 4-8% of purchases into your account. Kind of like eBay bucks. But I never buy the kind of stuff they link with it.

@RogerB said:
Request a prospectus, then read it and ask them questions about anything you don't understand. No one here can, or should, give you financial advice.

Well said, Sir. Honestly I wouldn’t know how to read a prospectus or probably understand what it all meant. I will get theirs and read it though, thank you for the recommendation.
I am 36 and so fall in the under 40 category. A while back I set up a GE drip account, and that has been a less than inspirational. That was my first leap into stocks outside of the governments TSP.

SamByrd

Acorn uses mostly Vanguard type funds and apportions them based on the risk level. One fund Vanguard S&P 500 ETF is in most of the risk levels and then they combine it with other vanguard funds of varying risk. Many of us buy Vanguard directly but this manner its easy to casually invest either through change or small recurring investments I have one weekly with one of my paypal accounts the risk is tiny and the upside potential very good.

ctf_error_coins

Can you buy individual stocks with Acorn?

Aspie_Rocco

@ErrorsOnCoins said:
Can you buy individual stocks with Acorn?

I do not believe so, but I might be wrong. I think they are a fund or savings kind of company.

ChrisRx

I have it and use it. Made a whopping $37.77 in interest/dividends within the first year. I think of it more as my "electronic change jar."

ChrisRx

I am using the "moderately conservative" portfolio option since this is not my main investment vehicle (that's Vanguard.)

Hydrant

Glad your back Aspie. Your threads are always good. Past, present, and I'm sure they will be in the future too. You're the MAN! Keep up on those Jefferson nickels.

FranklinHalfAddict

@Aspie_Rocco
If it truly is long term, you have way too much invested in bonds. Drop your total bond investment to no more than 5% of your total assets. Keep it that way until 10-15 years before you plan to start drawing from retirement funds.
The stock market goes up and down.
It hasn’t really done much over the last 3 months, so maybe that -2% you’re seeing is from fees.
Check into the fund prospectuses and see what the expense ratios are. You may have money in funds with really high fees.

Yorkshireman

To say always avoid international (as someone did) or only keep 5% in bonds until you’re close to retirement (as someone else did) is simply bad advice.
Allocations of portfolios should change based on relative market conditions.
One can not predict the markets but can react to changes in them if they know how to gauge the relative strength of the various investment asset classes.

A properly run and rebalanced portfolio of securities should outperform coins or precious metals held for the long term.

1630Boston

@AUandAG said:

bob
Some great US (and overseas) companies that make money and their stock is likely to rise with time.
MSFT
CAT
FB
AMZN
BA
LMT
RTN
AAPL
HON
CSCO

I LOVE RTN

1630Boston

PS
@AUandAG
Should not RTN split soon ?

Timbuk3

Sounds interesting !!!

Along

HON is set to spin a company off on Monday (GTX) and another at year end.

tyler267

I think the spare change idea is pretty good. Depending on how young you are it could add up to some real money over time.

PTVETTER

how does this relate to coin collecting?

Aspie_Rocco

@PTVETTER said:
how does this relate to coin collecting?

I suppose technically it doesn’t. However,
“It’s related to “spare change” and I have more faith in the wisdom found here than I have in random ad and articles. I want the opinion of members here. So I ask in the coin forum. I hope this is ok.”

It is offered through Paypal which is often discussed here. The “spare change” from my coin purchases goes into it. It was presented as my chosen investment alternative to metals, such as coins and bullion.

Perhaps it is not directly coin related, I apologize if this thread is inappropriate.

Jinx86

I had an ACORNS account at one point. The "fees" were more than my gains, although it was a small sum. I quickly dropped from the platform.

air4mdc

I think you should forget metals and start investing in the stock market and invest as aggressive as it allows. Making money in the market is all about compounding and compounding takes time. The more years the better. And it’s a cost basis average when you purchase stock.
If your talking spare change savings, just put it in a jar and when it’s full take it to the bank and deposit it. Your not going to retire off of spare change.
There are many options, maybe talk to a financial advisor for direction.

david3142

People here can give you general advice but it helps to know your specific financial circumstances and risk tolerance as well. Open a brokerage account and talk to a financial adviser there (which you should be able to do for free). Always be mindful of the fees that investment vehicles charge.

ARCO

Been using Acorns for about three years and have $1,500 or so. It has high management fees due to the small transactions and the regulatory record keeping required. Fidelity Investments would probably be better overall, but Acorns allows something no one else does-at least when it started: the ability to take your spare change and invest it immediately.

It is more of a novelty for me really, I keep my investment money at Fidelity Investments.

Swampboy

Savings is good.
More savings is better.
Just Do It™

FranklinHalfAddict

You have 30+ years until retirement.
You have plenty of time to be VERY aggressive with your investments. Therefore, bonds should be kept to a MINIMUM for at least the first 1/3 of that timeframe.
Time is on your side. Now is the best time to get into an aggressive growth stock mutual fund. A growth and income fund is a good idea but to a lesser extent than the aggressive growth at your current timeframe.

MorganMan94

A good place for a novice investor to start would be Schwab. I have an account there along with quite a few of my friends and family. I am not sure about other places but Schwab let's you buy and sell mutual funds with no fee (except for the annual management fees and if the fund charges loads). They also allow you to search for Mutual funds by Morningstar ratings, Schwab ratings, historical return, management fees, etc to find the perfect one for you. I personally love it and it is easy to manage.

MrEureka

I think that the stock market is s great place for long term investments and short term speculation. But if you’re going to a coin collecting forum for stock market advice, I have to question your ability to make good investment decisions, if not your motivation for asking the question in the first place. With all due respect, of course.

meluaufeet

I would consider a subscription to Hedgeye.

Aspie_Rocco

@MrEureka
“I have to question your ability to make good investment decisions, if not your motivation for asking the question in the first place. With all due respect, of course.”

Well I really do not have the ability to make good investment decisions. I made an effort to make that clear when mentioning this is unknown territory for me (investment). I tried to word it in the least embarrassing way. I don’t particularly trust the stock markets and I have been steadily losing 2%. That makes me uncomfortable.

As for my motivation in asking here, I tried to make that evident in the first post, saying I wanted the opinions of members here, so this reason is that I respect a lot of people who post. I’m losing money and getting nervous.

As a coin collector, money interests me, coins are money and it takes a bit of it to buy more coins. I want to fund my hobby now and into the future.

Cameonut

I have no opinion on Acorn, but it is better than doing nothing at all.

Take my advice. I started investing heavily and regularly (both are important) when I was 21.

I PAID MYSELF FIRST. Put 20% of my salary away every year (I recognize others may not be able to do this).

My goal was to retire when I was 55.

I did my own investing in my 401k and in my private accounts for the first 30 years and was successful. But I have an MBA and kind of knew the ropes. By then I had enough accumulated where I could employ a financial manager that thought the same way I did with respect to investments and my risk tolerance. There are many more pitfalls and booby traps to avoid these days vs back in the day.

I was lucky. I retired from "working for the man" at 53. Retirement is everything it is cracked up to be.

The key is to pay yourself first. I include my family as "yourself" so if you need to save for education, house, etc., go for it.

Coins were a distant third on my priority list for many years. Now I have the time an the means to enjoy the hobby and pretend to be a dealer from time to time at local shows.

I hope this was helpful.

Good luck.

jmski52

Over the longterm, fees become a major factor. Vanguard 500 Index Fund would be a good choice in terms of exposure to the US stock market, with low fees, and no exposure to bonds (which would not be so good in a rising interest rate environment and would be too limiting for a person with your time horizon anyhow.)

Wait until you have a solid base before going with individual stocks.

Oh, and come visit the Precious Metals Forum if you like metals.

bidask

Deal with your fear of losing money ...that is essential at your age.

Find a professional that you feel comfortable to talk with and trust .
Perhaps someone around your age.

Think long term . The S&P is a good suggestion .

Dollar cost average over time .

MrEureka

Two questions.

1. What’s your account balance?
2. What’s the monthly fee?

My guess is that all of your losses are due the fees.

Aspie_Rocco

$1 monthly fee.
The balance 2% loss is not a result of the monthly dollar fee.

For the time being I changed the distribution to aggressive moderate, minimizing government bonds. I appreciate all the diverse comments everyone it has been insightful and helpful. I will look into some of the recommendations here and read a Ton to educate myself more on the subject. If I do this right Will use the funds to take #1 in my nickel registry, and some others in 30 years or less! With enough left over for Dr Pepper and cheese steaks hopefully

david3142

@Aspie_Rocco said:
$1 monthly fee.
The balance 2% loss is not a result of the monthly dollar fee.

For the time being I changed the distribution to aggressive moderate, minimizing government bonds. I appreciate all the diverse comments everyone it has been insightful and helpful. I will look into some of the recommendations here and read a Ton to educate myself more on the subject. If I do this right Will use the funds to take #1 in my nickel registry, and some others in 30 years or less! With enough left over for Dr Pepper and cheese steaks hopefully

Dr. Pepper and cheesesteaks! I love it! Those are fantastic (and inexpensive) life choices.

BStrauss3

Per their website, they have three tiers ($1, $2, $3 / month) which includes different features.

https://www.acorns.com/pricing/

The first level, rounding-up purchases, is available through several banks when you use their debit cards.

Clients should be aware that Acorns is designed with frequent investing in mind. The fee structure may not be appropriate for individuals looking to make few or infrequent small-dollar investments.

The Subscription Fee is charged monthly in arrears and paid by a recurring monthly ACH debit and electronic funds transfer that will deduct money from a connected Funding Source.

Transaction costs are absorbed by Acorns as part of the Program. Clients may find the advisory and other services that compris the Program may exceed the costs of similar services purchased separately.

The ETFs recommended by Acorns have fees that are separate and distinct from the fees paid to Acorns for its wrap fee program. These fees are outlined in the prospectus for each ETF.

So...
Your $12/year cost comes out of your checking account, not the Acorns savings - don't forget to deduct that cost from your earnings.

Acorns is paying transaction costs, but the funds (ETFs) are still charging your account for their fees.

It's a convenience play - small investments instead of having to plan to send $50 or $100 a month to an investment account. And there's no tax advantage, unlike that $100/month going into an IRA.