Acorns Share Investing App - $5 Referral Bonus for March (Was $2.50)

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  mikmac on 01/03/2018 - 14:26

  +2

  Worth a read..
  https://amp.smh.com.au/money/investing/millennial-investors-…

  • 

    dbglt on 01/03/2018 - 14:49

    +2

    Honestly, I think that article is a bit clickbait. The whole point is that it is a savings vehicle to enable you to build your savings into shares as you go, even 10 cents at a time. You can't do this with traditional share brokerage.

    If you have say 5k or 10k, you would be better off going directly to a broker… but if not, their fees are very reasonable for the service they offer.

    Also, if you only plan to put in a small amount (the author lists $240), yes the fees can be high… but it is not economical at this amount to enter the share market due to brokerage costs.

    • 

      kzl on 01/03/2018 - 18:48

      According to the article, if you only have $241 your fees would be 6.22% p.a. ($15).

      With say 10.5% share market return (from the article), assuming 34.5% marginal tax rate (including medicare), your after-tax return would be 6.88%.

      This means that your net returns after taxes and fees is only 0.66%. In other words, the fees eat up pretty much all of your gains.

      You'd be better off putting that $241 in an online saving account and get 2-3%. You'd get higher net returns (after taxes and fees) with lower risk.

      And if you really want to try the share market but just don't have the money, you can always play the ASX game, or just paper trade.

      • 

        dbglt on 01/03/2018 - 23:03

        +2

        Yeah looks like it is not it for really for low low sums, but I reckon a few thousand dollars is a pretty good sweetspot so aiming to get it up to that. At that point fees are far lower as a percentage. What I like is that it allows me to get exposure to a range of indexes at (at least what I think) is a pretty low cost, in a way that is very much set and forget (but still easy to monitor in the app like a little game, and move in and out bank accounts etc - just much easier to use).

      • 

        trongy on 02/03/2018 - 09:07

        This means that your net returns after taxes and fees is only 0.66%.

        I calculate it as 2.8%, by subtracting the fees before calculating the income tax. However, Acorns also charges issuer fees which range between 0.288% and 0.428% depending on the fund type. These are the costs of acquiring the ETF shares and are detailed in section 5 of their Product Disclosure Statement.

        A person someone with a small amount of funds is probably going to be better off with a high interest bank account.

• 

  huu on 01/03/2018 - 14:40

  All looks good until it ask you for you bank Login and Password. Intrusive much?

  • 

    dbglt on 01/03/2018 - 14:49

    Hrmm, I can't remember putting that in? Might have forgotten, I've turned off all the "automatic" features (recurring deposits, round up), so maybe that's why?

    • 

      huu on 01/03/2018 - 15:21

      You can skip during registration but have to add one to complete the account opening. It need access to you spending for the round up features. But 2 problem with this, 1. Login and password give access to multiple accounts (may include mortgages and loans and credit cards) which is very intrusive. 2. The terms and conditions of your bank specifically said not to shares you longin and password with anyone. I know in the Acorns website give legal mumble jumple about legally we are allow quoting ACCC etc but do we have the resources to fight this when the banks are after us when our accounts are compromised

• 

  mikmac on 01/03/2018 - 16:01

  I think the point is to actually get you interested in investing moreover than making you lots of cash. So for that, it works.
  Also worth comparing to Betterment, Wealthfront and Wealthsimple if your serious about getting started. The fees are the 'real' difference.

• 

  Chuckler on 01/03/2018 - 18:09

  +1

  Strictly, they buy ETFs, not shares.

  • 

    dbglt on 01/03/2018 - 18:28

    Index of shares a better term? Might even be an index of indexes! (Indices?)

    • 

      Chuckler on 01/03/2018 - 18:38

      +2

      ¯_(ツ)_/¯ something like that.

      I think the better plan is to save $950 and then buy your own mainstream index ETF - STW, VAS, SFY or ILC - and reinvest yourself using a cheap broker. ING also offers a roundup service, dunno how well it works.

      • 

        dbglt on 01/03/2018 - 23:00

        +1

        Yeah definitely, I kind of liked that Acorn would buy into a few different kinds of indexes on my behalf, which would be expensive to enter into on my own (e.g. I picked the Aggressive or whatever it is called portfolio). I think it is very good value to buy a very small share in a range of ETFs.

        Agree though if you have decent amount of funds - 1k plus - and know where you want to put it, better off going directly.

        Acorn solves the "Gee which index do I put it in" (as you can put it in many at once), and does so at relatively low cost. Anyway, I just like the fun part of it, it's kind of like a little savings game - and have made about $5 from the "Found Money" part which has more than covered the fees so far!

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  miq on 02/03/2018 - 01:16

  lol acorns 😂😂😂