By Lina Martinez

The world of fintech (financial technology) is truly exciting. Reducing fees, costs and barriers to entry is creating the potential of bringing the rest of us into financial markets in a disruptive manner. All of a sudden, much of the investment advice once reserved for the few is successfully being automated for the masses. The lowering of fees, due to this disruptive tech, is finally creating situations where a decent investing ROI is reality for us average people.

We millennials have avoided investments in favor of saving as a result of the 2008 meltdown. The problem is that even though the U.S. is over financialized, we still have to play within that framework.

A previous zenruption article focused on the need of millennials to get their toes wet and start testing the world of finance in small steps, but it might be that Acorns is that perfect small first step.

Acorns is an app for either IOS or Android that takes your change from your purchases, rounds up to the next dollar and then invests the money. Users can also manually move additional funds to Acorns or schedule money to move at a preset rate, like a dollar a day. While banks have offered similar plans since Bank of America introduced Keep the Change in 2007, those funds have gone into low interest savings accounts which were easy to raid and move the funds back into checking when needed. The result of such savings plans was typically nothing being saved at all.

Acorns eliminates the ability to move the money back into your account and creates the true psychological connection to saving money. While Acorns isn’t a trading platform for individual stocks, it invests your change into moderate risk funds using Modern Portfolio Theory, which is essentially investing across different asset classes such as energy, heavy industry and tech. Acorns automatically rebalances your portfolio, meaning that the weightings of assets are maintained after growth or loss in one or more classes.

One criticism that zenruption has levied against the financial industry is in the high fees charged by fund managers. They make money off of you even when you don’t make it off of them. It is the main reason that we find 401ks a poor investment beyond receiving the matching portion from your employer. Acorns is very low fee and you end up keeping more of your money.

The best aspect of Acorns is being able to watch your $50, that you have invested over several months, move with financial markets and get a feel for how it all works. It might be that one of the most valuable things that comes out of Acorns is the exposure to finance and helping to grow our understanding of the thing that controls so much of our country.

Download the app and give it a shot. It’s easy, fun and educational.

zenrupt your money.


Lina Martinez is a frequent contributor to zenruption’s money and life pages. She loves investing and always seeks to learn more and try out all of the new fintech applications. We must frequently tell her to stop looking at her Acorns and stock apps and focus on the beer in front of her.


Feature photo courtesy of Flickr, under Creative Commons Attribution-Noncommercial license