Build A Portfolio From Your Spare Change

Taking A look At Micro-Investment App Acorns


Increasingly, dividend income investors are being offered new and exciting ways to invest in the stock market that previously did not exist. Companies that have been around for a while such as Ameritrade, Scottrade and Schwab have all brought stock trading to the masses via the Internet and web apps all the while reducing transaction costs dramatically. Newer brokerages to hit market such as Sharebuilder enabled the option of purchasing fractional shares as well as free dividend reinvestment for the first time. No longer were dividend income investors bound by share price as a limiting factor for investment as half, quarter or even tenths of a share could now be bought. Fast forward several years and even newer methods for investing have cropped up. Companies such as Loyal3 have now enabled commission free trades and starting investments as low as $10. Gone is the excuse many people have claimed about not having enough money to invest or that it was simply too expensive to do so. Further, Motif Investing now enabled any investor to automatically create their own portfolio of stocks and purchase ten, twenty or even thirty stocks all at once for one low commission. There is no question that the power has shifted from the large brokerage firms to the individual investor as options for investing in the stock market have never been cheaper nor easier than ever before. I remember my first stock trade paying a very standard commission of around $50. These days, we shudder at the thought of paying over $10 a trade.


Clearly, the choices for new investors are numerous when starting to build out an income producing investment portfolio. While doing my usual daily read of financial and investment blogs I came across another new player in the brokerage market that I have never heard of that seems quite interesting for anyone looking to start an investment portfolio. Simply known as Acorns, this mobile investment app enables you to make regular small investments into a basket of funds from the everyday purchases you make by rounding up each amount to the next dollar automatically. For example, say you spend $1.49 for a taco at Taco Bell, the app reads that as $2.00 and pushes 51¢ into your Acorns account. The money is linked from your credit or debit card.


While the ability to invest in individual stocks is not currently available you do have the option to select how conservative or aggressive your investments will be. Acorns takes your investment balance and automatically invests it among six investment funds that include, Large Company Stocks, Small Company Stocks, Emerging Market Stocks, Government Bonds, Corporate Bonds and Real Estate Stocks. The specific ETFs that Acorns invests in are, PIMCO Investment Grade Corporate Bd ETF (CORP), Vanguard S&P 500 ETF (VOO), iShares 1-3 Year Treasury Bond (SHY), Vanguard Small-Cap ETF (VB), Vanguard REIT ETF (VNQ) and Vanguard FTSE Emerging Markets ETF (VWO).


While Acorns may not be for everyone, the benefits of this investing method may be huge for younger individuals without a lot of money who wish to make regular investments in the stock market automatically. Acorns has no minimum to start, no commissions to invest or re-balance and the ability to reinvest dividends automatically. We are all acutely aware of the power of making small contributions over time to our investment portfolios and one cannot discount the power of simply making small contributions on a daily basis to an overall portfolio balance. On average, users are investing around $3/day in roundups alone.


Acorns makes money by charging a monthly $1 fee as well as a management fee that ranges from .5 percent to .25 percent of your portfolio value. While the fees are very reasonable, Acorns is not the best value around for larger portfolios. The best benefit of Acorns is its unique ability to make an investor continually contribute to an investment portfolio by changing the perception of spare change and by enabling those pennies, nickels and dimes to work for you in a more worthwhile way.


What do you think about Acorns? Please let me know below.


Disclosure: Long NONE

24 thoughts on “Build A Portfolio From Your Spare Change”

  1. What a novel idea. With so many options I often wonder why people do not invest their money. A lot has to do with a great lack of knowledge, but with apps like this, perhaps more and more people will realize how easy it is to make money from their own money and not only their own personal hard work. Great post!

    – HMB

    • Hi HMB,

      I thought it was an interesting idea as well. Who would have thought about a way to get people to invest their spare change. I totally agree with you that these days there is zero excuse to not invest in the stock market. With so many investing options and methods available that are essentially free or close to free in terms of commission, with such small minimums, anyone can afford to invest. There is no reason for anyone to not get their feet wet. Thank you for stopping by and commenting.

    • Hi DM,

      I never cease to be amazed at all the new and unique methods that are available to the investing public. To think, not that long ago, the only method to buy stocks was to go through a full service brokerage house and pay hundreds in commissions per trade. Today, standard brokerages are all $10 or less to invest coupled with unique trading platforms such as Loyal3, Sharebuilder, Motif and now Acorns that make investing totally approachable no matter how much money you have. Obviously, the big selling point of Acorns is the set it and forget it approach whereby a young person just starting out can literally invest on a regular basis without giving much thought to the matter. Thanks for stopping by and commenting.

  2. Interesting idea, but not something I’d be interested in doing, nor completely new. This is similar to a program Bank of America had several years ago to get people to kick money over into their savings accounts. Instead of savings accounts, this moves it into an investment account. Two issues I see here are the fees associated with this, for all sizes of accounts, and the complete inability to invest in individual stocks.

    The management fee is conceptually understandable based on their investment “service” as they have to make money somehow, but one needs to realize this is on top of any management fee in the underlying holdings. The appeal of some of those funds, especially the Vanguard, are the low fees. This is erased with a 0.25 to 0.50% kicker on top of the built-in management fees. Not a cheap addition… for ANY size portfolio. I’d much rather stick with Loyal3 for no-cost dividend growth investments (they offer quite a few viable options), than be charge to invest any money that I might view as “spare change”.

    The real selling feature here is the mindless nature of the investment, so I guess for some the expense might be less than the corresponding opportunity cost of not investing. I wouldn’t rely on too many folks making that decision without already being in control of their finances, and by extension not in a position to really need this service.
    writing2reality recently posted…Wait, More Spreadsheets? Hello, Dividend Growth PortfolioMy Profile

    • Hi w2r,

      It’s definitely a new concept when it comes to investing in stocks. I remember those BofA ads touting the concept of rounding change and placing it into a savings account. I guess it all comes down to making investing easy and simple and as you say “mindless.” Sometimes, for most people going a “mindless” route is the best way to invest as it becomes automatic and you don’t have to actively think or manage anything. Just simply go about your day and make those ordinary purchases all the while slowly building up an investment portfolio. While I do like this passive concept of investing I was not too keen on the fees they charge. Thanks for sharing your opinion on this new app.

  3. Interesting concept. The first question I ask when considering any new brokerage option is whether they provide tax documents electronically. If not, I’m not interested. Then I want to know what the commissions are…

    Dealing with filing taxes is hard enough; I don’t want to be entering data manually!
    FerdiS recently posted…The Bloggers’ Dividend Growth PortfolioMy Profile

    • Hi FerdiS,

      I would imagine that an app as progressive as this would provide all necessary documents electronically. This is a great app for anyone with little to no money a way to invest passively. Thanks for stopping by and commenting.

  4. This sounds like a great idea! Unfortunately for me, The Acorn investing app isn’t available in Canada. I guess that’s another perk we missed north of the border haha.

    I am attempting a similar concept with my spare cash at the moment. My broker Questrade has commission free ETF so I usually transfer cash at the end of each month and purchase ETF according to my allocation! Since I cannot buy partial shares, I usually wait until I have over $20 before purchasing whichever fund is needed to fit my allocation. It would still be nice to have access to Acorn in Canada though!

    • Hi YI,

      I think a lot of people like the concept of being able to invest their “spare change” without having to be consciously aware of the process. Many times “mindlessly” contributing to an investment account is the best way to not feel the money leave your pocket. You know the saying, “pay yourself first” and this app really delivers on that measure. I’m sure after the initial roll out in the U.S. the Acorns app will be available in Canada and elsewhere. Grow Independent commented that it’s not available in Germany either. It seems, from your description, you are doing something very similar already at your broker. In the U.S. Bank of America had a similar program to place your change into their savings account. The bottom line is that this app or similar services are all about making investing as simple and painless as possible. After all, who would feel those missing nickels and dimes per transaction? Thank you for stopping by and commenting.

    • Hi Tawcan,

      From what I read Acorns is a pretty well funded start up which means they have found a great way to make money for themselves as well. Obviously, this app is of little value to investors such as ourselves, however if you are a teen or early twenty something with little or no money, having this app to invest your “spare change” can really get you off to a great start without having to think about investing. Thank you for stopping by and commenting.

  5. Very good concept. I don’t like the fees for such nominal amounts and the inability to pick individual stocks. However, it can definitely be a benefit to some that lack the discipline to invest continually or save money. I could see some tweaks that could make this an awesome concept, like maybe dropping the monthly fee and only charging the % and including individual stocks. That would be huge!
    Special Agent Dividend recently posted…Loyal3 AppMy Profile

    • Hi SAD,

      While Acorns seems like a great app to get people to invest without really thinking about investing, I do agree with you that the fees do seem a bit high for what you are able to do with it. However, the greatest selling point of this app may be for new, young investors that want to take the “thinking” out of investing and automate this process by getting regular micro-deposits being made into their accounts. At the very least this is a unique way to get people to invest. Thank you for sharing your opinion.

  6. DivHut,

    sounds sweet. If one has trouble starting out this might be a good tool to keep going.
    I am amazed about all the possibilities out there. I am really jealous that I am not allowed to participate at Loyal3 since I am from Germany.

    I am happy for you guys in America, though.

    • Hi GI,

      I’m sure in time you’ll have other investing options in Germany. As I mentioned in the article I am continually amazed at all the new methods that are coming up to allow individuals a way to invest in the stock market. There really is no excuse to not invest these days and at the very least this new app is a great way to get people with little to no money to start as you can simply invest your “spare change.” Thank you for your comment.

    • Hi PIP,

      As far as I can tell the expenses Acorns charges are on top of the regular ETF expense ratios. The ETF expense goes to the ETF managers while the Acorns fees goes to Acorns. I realize that it might not be the most cost effective manner to invest your money but it does take the thinking out of investing. While this app may not be for most investors I think it has a great appeal to young people with little or no money who have zero investment knowledge. It can be a great way to start building a nest egg which can eventually be rolled over after a few years into a more traditional brokerage account. I appreciate the comment.

  7. Interesting read, DivHut.

    Acorn sounds like a great option for younger people to get the ball rolling with their investments. What an easy way for them to make sure they’re socking money away.

    As for commissions, I remember having to pay $30 both ways to close out options trades (I sell put options occasionally on stocks I want to own at a lower price) and really feeling terrible about paying so much. As you said, more than $10 these days is all but criminal.

    – Ryan from GRB
    Get Rich Brothers recently posted…Modern Day SlaveryMy Profile

    • Hi GRB,

      It definitely seems like Acorns is for people just getting started with little or no savings to invest. I guess in that manner it’s a great way to get the investment ball rolling by collecting “spare change” without really feeling it missing.

      Regarding commissions the pendulum definitely has swung in the favor of consumers. These days there really is no excuse to not invest in the market. Thank you for stopping by and commenting.

  8. What an interesting idea. I have never heard of Acorns before. This reminds me of several years ago when a bank would round up your transactions and transfer the difference to a savings account. Now, I suppose that isn’t much of a savings 😉 At the time that was a pretty revolutionary idea.

    It would be pretty easy to figure out how much I would automatically save if by looking at my credit card statements, but if you don’t make a lot of transactions, this may not be that great of a service for you.

    Anyway to encourage savings is a great thing.

    Take care!
    ILG recently posted…October Portfolio HighlightsMy Profile

    • Hi ILG,

      I think it was BAC that offered the rounding up transactions and placed the money collected into a savings account. It’s a great and simple concept and I think it has its merits but I wasn’t too keen on the fee structure. But, as you said, “Anyway to encourage savings is a great thing.” Thanks for commenting.

  9. That’s a very cool idea. We have a bank account in the UK that does this, but sweeps the rounded up money into a savings account instead. I think it certainly could be used to encourage more people to invest when they think they don’t have much… But that management fee could really start to bite after a while!

    The only problem for me is, we cannot buy fractional shares in the UK, only fractional funds. And fund dealing is often available for no commission anyway… Just need to get brokers doing the same for our favourite dividend shares and we’re sorted!

    • Hi M,

      It certainly seems that in recent years a host of new companies have cropped up to try and get younger people to invest in the market. We have seen companies such as Motif, Loyal3, Betterment, Acorns and more offering very low commissions or no commissions to entice a new crop of investors. Here in the U.S. a few banks have been doing the same thing as Acorns and rounded up your money into a savings account. I guess the premise is to make investing or saving feel as painless and seamless as possible. I agree that it’s an interesting idea but I’m not a fan of their fee structure either. If I was starting today I would open a Loyal3 account first. Thanks for stopping by and commenting.


Leave a Comment

CommentLuv badge

This site uses Akismet to reduce spam. Learn how your comment data is processed.