I am always on the hunt for new financial tools that can help us reach our goals. One of these goals includes retiring early. Or, at least, we are certainly trying to get to that point. We already have two different investment accounts we are using to help us retire early. But, I am always looking for new ways to diversify our portfolio. So, when I recently heard about an investing app called Acorns, my interest was peaked.

Acorns Initial Set-Up

When you first sign up for Acorns, you have to choose your initial monthly plan. I chose to go with the lowest plan, which is only $1 per month. The Lite plan only offers a taxable investment account. Which was fine for us because we already have some Roth IRA accounts that we max out.

The next plan up is the Personal $3 per month account. This one adds a checking account and an IRA option. And the last plan on the tier is the Family plan at $5 per month. This one adds the option to open investment accounts for your kids as well as everything offered on the other two plans.

But, since this was just another investment option for us and we already have all of the other types of accounts, the cheapest option is what we went with.

Once you set up your account, you can choose how much you would like to contribute and how often. We aren’t investing a ton into this account since it is just for diversification purposes. Plus, we wanted to see how it performed first before we bumped up any contributions.

What is Rounding-Up?

After the initial set up, you will be informed of their rounding-up technique. You have the option to attach a checking account and credit card to this feature. And this is exactly what we did. We just wish we would have been able to attach more than one of each the the account. But that might be a possibility on the higher tiered accounts.

Either way, once you have external accounts connected to your Acorns account, they will begin the rounding-up process. Every time you make a purchase, Acorns will round the purchase up to the next whole dollar. Once you reach $5 in round-up money, that will be transferred from your initial funding account into your Acorns investment account.

But, you have the opportunity to increase your round-up’s even higher, if you choose to. You can add a multiplier of 2x, 3x or 10x what each round-up is. We chose to add the 3x multiplier to our account. This means that each time we make a purchase and a round-up happens, Acorns multiplies that number by 3. And that is the amount that will be taken out of our initial funding account to be put into the Acorns account.

And for one more extra bonus, you can choose how much you want Acorns to invest from any whole dollar purchases. We chose the highest amount which is an extra $1. But since we have the 3x multiplier on, it means we are actually investing an extra $3 per purchase on any whole dollar purchase made.

How Acorns Invests?

When you choose the regular taxable investment account, there are only a few options for how your money is invested. You can choose between 5 different portfolio options:

Conservative – 20% each of 5 different Government and/or Corporate Bond ETF’s

– 20% each of 5 different Government and/or Corporate Bond ETF’s Moderately Conservative – 4% Med Company Stocks; 24% Large Company Stocks; 12% International Company Stocks; 18% Short Term USD Bond; 42% US Aggregate Bond

– 4% Med Company Stocks; 24% Large Company Stocks; 12% International Company Stocks; 18% Short Term USD Bond; 42% US Aggregate Bond Moderate – 2% Small Company Stocks; 5% Medium Company Stocks; 35% Large Company Stocks; 18% International Company Stocks; 12% Short Term USD Bond; 28% US Aggregate Bond

– 2% Small Company Stocks; 5% Medium Company Stocks; 35% Large Company Stocks; 18% International Company Stocks; 12% Short Term USD Bond; 28% US Aggregate Bond Moderately Aggressive – 38% Large Company Stocks; 10% each of Treasury Bonds and Corporate Bonds; 4% Vanguard Emerging Market ETF; 8% Vanguard REIT ETF; 14% Vanguard Small Cap ETF; 16% Vanguard FTSE Developed Markets ETF

– 38% Large Company Stocks; 10% each of Treasury Bonds and Corporate Bonds; 4% Vanguard Emerging Market ETF; 8% Vanguard REIT ETF; 14% Vanguard Small Cap ETF; 16% Vanguard FTSE Developed Markets ETF Aggressive – 5% Small Company Stocks; 10% Medium Company Stocks; 55% Large Company Stocks; 30% International Company Stocks

Each of these options will be based on your risk tolerance and your time horizon. You don’t get to choose the individual funds that are in each option though. These are already pre-chosen for you. Which can make things a bit easier, if you prefer more of a hands off investing option.

Acorns will suggest which investment option is the best for you based on what information you filled out in your profile. But, ultimately, you get to decide which one suits you best. And if you decide that you want to change to a different portfolio option, it is extremely easy to do so with the click of a button.

Acorns Summary

Overall, we have had a good experience with Acorns so far. The platform is extremely easy to set up and use. Plus, they have a lot of smaller articles to help guide you along your way with investing. Even though we can’t pick and choose our individual investments, we have been happy with the performance so far.

And, Acorns has made it super easy to help diversify our retirement portfolio without much work from us. We love the round-up feature because I don’t have to think about it. Money just automatically gets transferred in whenever we make purchases.

Acorns is great if you are just getting started with investing and have a difficult time remembering to fund your account. Or if you don’t want to be that involved with your investment account. You want to just set it and forget it. But, if you prefer a more hands on approach, there are plenty of other options that will suit you better.

No matter which investment platform or app you go with, make sure it is a good fit for you first. Because if the investment strategy you are using doesn’t work for your life, then you won’t use it to maximum effectiveness. Which, ultimately, defeats the purpose.

Have you tried Acorns as an investment strategy yet? What are your thoughts on the platform and performance?