Make Passive Income by Automatically Investing Spare Change

Updated: Mar 10, 2021


Remember the old days when people collected physical spare change into piggy banks? Like pennies and nickels. We still do that of course, but with so much of our purchases now happening digitally through credit card and paypal purchases, spare change is no longer a way for people to save. Most of us never see any spare change at all. So that extra money we would've had to put in our collection jars just get spent instead. Acorns has changed that. It basically takes your electronic purchases and rounds them up to the nearest dollar. That difference is the "spare change," and it's placed into a digital investment account for you where it can grow through a mix of bonds, stocks and real estate. This post will show you how to make money with the Acorns app.



What is Acorns?


The Acorns app is a great for those seeking to make money through a truly passive investment. With Acorns, you don't have to think about saving your spare change like the old days. The app does all that for you through round-ups of your electronic purchases. This "spare change" is automatically saved into an account diversified into high yield investment vehicles.


In addition, if you're a newbie to the finance world, you won't have to choose your own investments. Acorns uses various questions to determine how to allocate your money into a specific portfolio of ETFs, based on your risk tolerance and goals. These ETFs represent a mix of stocks, markets, real estate, and bonds. Acorns has no fees except for a monthly fee that starts at only $1.


How to Sign Up with Acorns


It's quite simple to start investing with Acorns. It takes about five minutes to get it up and running. The first step involves creating an account with a username and password. Next, you'll need to sync your bank account, debit account or credit card to your Acorns account by providing your login credentials through a safe third party software.


Lastly, Acorns will ask you questions, including those about your income, risk tolerance and goals. You will also have complete control on how much of the money in your account you'd like to invest in the markets mentioned above. Perhaps you'd like to simply save and not invest at all. This strategy would be closer to the physical piggy banks of yesteryear. No gains, but also no risk.



Ways to Invest with Acorns


Acorns is a brilliant idea to get regular people saving and investing. Over the years, Acorns has learned to improve their services greatly. This includes providing many options for its users. Here's what you'll get when you create an Acorns Invest account:


Round-Ups to Invest Your Spare Change


After you've created your Acorns account and its been linked, Acorns will monitor all your purchases and round up each of your transactions to the nearest dollar. For instance, if you bought a chocolate bar for $1.75, Acorns would set aside $0.25. That may not seem like much, but it'll add up over time. When your account has reached a $5 threshold, it will be automatically placed into the Investment portfolio you selected.

Through just these rounds ups, the typical person invests over $30 per month. However, you may want to invest more than just what you get through round ups. You have the option of creating additional deposits with transactions that equal exactly one dollar. When you first set up your Acorns account, you can set up a weekly recurring investment, as well as do one-time transfers to Acorns from your linked bank account at any time.


Additional Cash Back Money


Even better news is that Acorns has partnered with over 300 companies that will invest a percentage of your purchases (aka "Found Money") into your Acorns Invest account. It's similar to the cashback offers you get from credit cards, but instead the companies that participate will deposit a fraction of your purchase amount into your account.


There are over 300 companies participating in this Found Money Rewards program, including Walgreens, Nike, Walmart, Chevron, Barnes & Noble, and many more. Each company sets its own amount. For instance, Walgreens will invest 2% of your transactions. These rewards are typically invested into your account between 90 and 120 days after you make a purchase with one these partners. Until then, you'll see them as "pending rewards" in the Earn Found Money section.


What is Acorns Later?


For all of you planning retirement, Acorns Later is a tool to help you save for retirement. With Acorns Later, you can open an IRA with just a few steps. Acorns will help you pick the right IRA for your risk level and goal. To be able to use Acorns Later, you'll need to pay a bit more at $2 per month in fees, until your amount invested with Acorns is greater than $1 million. For those of you who don't have much to save, perhaps this fee may seem a bit much. However, the benefits of the technology greatly outweigh the cost. After all, time is money too.



The Power of Compound Interest


If you're like the majority of people out there, you don't know diddly-squat about investing. Unfortunately, they just don't teach personal finance in grade school. Well Acorns is a great answer for that. Putting your spare change to use and getting the occasional retailer cashback deposit can result in a nice sum over time. And if you're thinking about retirement, even better since Acorns offers IRA accounts. Use the power of compound interest and let Acorns do the rest.



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