Welcome to the hip-pocket share market

Welcome to the hip-pocket share market

If you’ve ever wanted to dip a toe into the share market, but didn’t know where to start, then Acorns might be the answer. Shares are an important asset in a diverse investment portfolio but, let’s face it, for most of us the share market makes about as much sense as sign language in the dark. Luckily though, technology is once again making this once-foreign world accessible for everyday punters.

I came across one such example, the Acorns app, and started using over the last week or so. Just like the squirrel stashing away the proverbial acorns one by one for his winter hibernation, the Acorns app helps you stash away small amounts of money into a share portfolio so you barely even notice you’re becoming a hip-pocket investor. The idea behind the app is to allow easy access to the share market for new investors, taking away the usual barriers such as high fees and the need to appoint a broker. The app links to your online banking, automatically rounds up your daily purchases and invests the ‘change’ into a share portfolio.

It is a free app to download, but it does cost you $15 per year if your portfolio is less than $5000, or 0.275% of your portfolio if greater. Compare this, though, to a traditional broker and it is still a significantly lower cost. The cost-effectiveness is a pretty attractive selling point – In its first three weeks in Australia more than 50,000 had signed up to it! And signing up is relatively easy. Just download Acorns from the App Store or Google Play and follow the in-app prompts to create your account. Once that’s done, link your internet banking to the app to allow it to see your transactions on your credit cards and bank accounts. My Bankwest and NAB accounts were seamless to connect to.

“My Acorns account has only been going for a week now and so far my portfolio has already increased 0.02%. As they say from a small Acorn grows a magnificent Oak Tree.”

Once you’re all setup, you can customise your account. Much like traditional share market investment, the most important decision to make is your portfolio. Depending on whether you want to make a bit of extra cash short-term (see more tips on saving here), or looking for long-term growth to boost your retirement fund, the app offers five model portfolios. From conservative, which deals with mostly cash and bonds, to aggressive which allocates over 80% to equities, the choice is yours and can be changed relatively easily at a later date. I have chosen aggressive for now and it has invested in bonds such as Russell Australian Select Bond and Betacash.

You can choose to invest an initial amount, have recurring deposits into your investment, or do both, but the main purpose of the app is to round up your purchases. Say for instance you purchase a coffee for $4.50. The app will ask you if you want to roundup the 50c into your investment account. Much like dumping all of your loose change into a jar at the end fo the week, now you can do it electronically straight into the share market. You can see the picture below all of my transactions which have been rounded to the nearest dollar and put into my investment account. This is not an automatic process; you can go through and select which roundups you want to transfer across. Once the roundups reach a total $5, Acorns will invest them on your behalf.

Of course you can also choose to withdraw your portfolio at any time (with a turnaround time of about three days as your shares will need to be sold) and the app also gives you the option to invest straight into your superannuation fund (See other ways to give your superannuation a boost here).

I’ve dabbled in the stock market a little before, but this is a much easier entry into the market and allows people to invest in small increments as they go. It is designed to get people interested in investing and provide them with a little education along the way.

My Acorns account has only been going for a week now and so far my portfolio has already increased 0.02%. I will keep you all updated on how the app is tracking along the way! As they say from a small Acorn grows a magnificent Oak Tree.

If you do decide to sign up I would love to hear your experiences, or if you would like assistance to sign up we can help you through the process. Just contact the friendly team today at We All Count on (08) 8531 0577 or admin@weallcount.com.au.

Shaun Circle

Shaun Williams
Partner – Murray Bridge

 

General advice warning: The advice provided is general advice only as, in preparing it we did not take into account your investment objectives, financial situation or particular needs. Before making an investment decision on the basis of this advice, you should consider how appropriate the advice is to your particular investment needs, and objectives. You should also consider the relevant Product Disclosure Statement before making any decision relating to a financial product. This review was not sponsored in any way by the Acorns app or it’s developers.