Like many Millennials, I typically carry little to no cash. If I’m lucky, there’s usually a crumpled up bill in one of my wallet folds for emergency cash-only situations. Much to the dismay of many hard currency enthusiasts, we live in a world where the vast majority of transactions are completed digitally.
We’re a post-cash society, and we’re moving further and further away from traditional means of payment. The latest trend in digital payments has been to start using your smartphone to pay for things. Starbucks has successfully adapted millions to smartphone payments with their nifty app. Despite my cashless lifestyle and the exciting developments on the horizon for digital payments, I can remember the fonder days of yesteryear and the excitement of saving my change in piggy bank.
Physical penny pinching is super obsolete, so we’re going to have to do it digitally. It should come as no surprise that there’s an app for those of you who miss your piggy bank. In the spirit of American capitalism, there’s always an app searching to carve out a niche on the cyber frontier.
Recently, a friend recommended that I try and write about Acorns. Acorns is a app and an investment platform that “invests spare change automatically from everyday purchases into a diversified portfolio.” Acorns rounds-up your everyday transactions to the nearest whole dollar. It then takes that money and invests it in the stock market.
Acorns takes your hard-earned change and parlays those funds into Exchange Traded Futures or ETFs. For those of you who are unfamiliar with this term, which is common parlance in the world of Wall Street, Investopedia defines an ETF as “a type of fund which owns underlying assets (could be stocks, bonds, gold, etc), and divides ownership of those assets into shares. It’s a convenient and indirect way of owning assets, and trades like a common stock.
Photo by @NatViewpoint
Acorns is an app that was designed with the young investor in mind. If you’re under 24, you can start investing fee-free. If you sign up with a .edu email address, you can also access the service for free because of your student status. If you’re just leaving college and want to start saving for retirement, Acorns is a good way to get started.
As Nerdwallet pointed out in its app review of Acorns, young professionals should prioritize maxing out their 401(k)s and IRAs before investing their money elsewhere. That’s because there can be significant tax benefits, and employers often match contributions in some capacity. Leaving that “free money” on the table is a disastrous financial decision.
Let’s face it, us Millennials are far from retirement, but every bit helps. Like many of my colleagues in my generation, I’m primarily saving up for own my primary residence outright (mortgage-free). In the meantime, I might be inclined to have a little investment portfolio on the side beyond my 401(k), through Acorns. Perhaps that will recapture what was once a delightful zest in my youth for saving residual coinage from a given day’s transactions.
Photo by @SAI
David is the Editor of Bold. He's especially passionate about millennial economic empowerment. A former local news reporter, David is originally from the Little Havana area in Miami, and later became a pioneer resident of the Disney-inspired town of Celebration, Florida. David holds a Master’s in Public Policy from the Harvard Kennedy School.