This looked really awesome, until I noticed the fees, which seem really high.
Acorns – Automatically Invest Your Spare Change
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Re: Acorns – Automatically Invest Your Spare Change
#12I don't understand how their app knows what I spend elsewhere.
Re: Acorns – Automatically Invest Your Spare Change
#13A lot of my friends who aren't experienced investors are really excited by this. The fact that they will automagically invest a small amount of money without having to think about moving money or choose what to invest in seems great to them. I personally would rather decide how much to invest and what in myself so I am not particularly interested in paying someone else fees to take this control away from me. But defi…
For the person who wants to put time/effort into investing, where you suggest they start?
The sidebar on /r/personalfinance.
Re: Acorns – Automatically Invest Your Spare Change
#14I don't understand how their app knows what I spend elsewhere.
It connects to your bank account and rounds up the transactions
Re: Acorns – Automatically Invest Your Spare Change
#15I created an account a month or so ago, but never completed the signup. Why would a service snoop into my bank accounts instead of, let's say, withdraw $10/month via ACH?! I really don't get this "spare change" idea (like BofA's). $10/month sounds much easier to grasp, implement, and it's safer at the end.
They connect to your account using a service like Yodlee, Intuit Aggcat, or Plaid.io. So all they really have access to are your transactions. (I worked with these API's for over 1 year, and can spot that sign up flow a mile away)
They then pull in the transactions for you to round up manually (through a simple select process), and if you choose to round up, they ACH that amount of money over.
Makes sense for people who are not used to saving money or budgeting for financial services.
Re: Acorns – Automatically Invest Your Spare Change
#16A lot of my friends who aren't experienced investors are really excited by this. The fact that they will automagically invest a small amount of money without having to think about moving money or choose what to invest in seems great to them. I personally would rather decide how much to invest and what in myself so I am not particularly interested in paying someone else fees to take this control away from me. But defi…
For the person who wants to put time/effort into investing, where you suggest they start?
I think the best investment media today is TastyTrade.com. Imagine if CNBC were actually helpful, and if the hosts were real traders who let you in on what they're doing in real time.
They trade options and futures a lot which aren't right for a brand new investor, but it's great content regardless. They talk about pork bellies on Bloomberg and I'm never going to invest in them. They've got a research team, emulating the hedge fund model, and they turn out a research piece literally every day. Check out the podcast.
These guys built ThinkOrSwim, had a $600MM exit, and now they're just giving everything away. They've also built a great (free) options trading platform, Dough.com. Notable if only to show you how these guys run their business.
Also, useful to read Random Walk down Wall Street and understand the efficient market hypothesis.
Re: Acorns – Automatically Invest Your Spare Change
#17A lot of my friends who aren't experienced investors are really excited by this. The fact that they will automagically invest a small amount of money without having to think about moving money or choose what to invest in seems great to them. I personally would rather decide how much to invest and what in myself so I am not particularly interested in paying someone else fees to take this control away from me. But defi…
For the person who wants to put time/effort into investing, where you suggest they start?
The book "A Random Walk Down Wall Street" by Burton Malkiel is an excellent place to start.
Re: Acorns – Automatically Invest Your Spare Change
#18A lot of my friends who aren't experienced investors are really excited by this. The fact that they will automagically invest a small amount of money without having to think about moving money or choose what to invest in seems great to them. I personally would rather decide how much to invest and what in myself so I am not particularly interested in paying someone else fees to take this control away from me. But defi…
For the person who wants to put time/effort into investing, where you suggest they start?
Open a taxable account at Vanguard and invest however much you want in VTSMX. Done.
For extra credit, switch to VTSAX once you get above $50K.
Re: Acorns – Automatically Invest Your Spare Change
#19Earlier quoted context omitted.
For the person who wants to put time/effort into investing, where you suggest they start?
With your companies 401k or equivalent. Just put whatever percentage you want into a low cost, broad index fund. The most important part is to make this allocation before your paycheck gets cut (i.e. you never see the money).
Also make sure to change jobs every few years so you can move money from the 401k to an IRA without a tax hit. 401k's tend to suck - high fees, low returns, little competition. Most of the funds in your 401k are there because a fund salesman took an HR person out to a steak dinner.
When you change jobs, always move the 401k into an IRA and put the money into low cost ETFs.
Re: Acorns – Automatically Invest Your Spare Change
#20Earlier quoted context omitted.
For the person who wants to put time/effort into investing, where you suggest they start?
Open a taxable account at Vanguard and invest however much you want in VTSMX. Done. For extra credit, switch to VTSAX once you get above $50K.
What are the pros/cons of the various Vanguard options?
I'm in VTI (TOTAL STOCK MARKET ETF) and VXUS (TOTAL INTL STOCK INDEX FUND ETF) because I believe that's what it's suggestion thing said to me, what's the comparison to VTSMX? And what's the difference for VTSAX at 50K?