I kept forgetting that I have the Acorns app on my phone. I suppose that’s the whole point. That I was investing money without even trying.

Go to any personal finance blog and we’ll all tell you why investing is important and why you need to start doing it as of yesterday. But most of us (including me) drop the ball when it comes to the execution.

Like, if you want to actually invest, which websites do you go to and which buttons do you press? And how much money do you need to start? Is it…a gazillion dollars I’m never gonna have?

When I opened up my first investing account, I suffered through the clunky websites on my own, blindly navigating by pressing a bunch of buttons and seeing what happened. Times have changed since then–online investing has not only gotten a much-needed digital makeover, but can now be done by answering just a few questions. And one of the easiest ways to get started today is with the help of robo advisors–an option that I didn’t know existed when I was a new investor.

If the word ‘robo advisor’ made you pause, let me stop and explain. It costs money to invest, and how much it costs depends on how involved you are. Here are the three common methods:

$$$ / Hire someone to do it for you.

Most of us probably know someone who walked into their local bank and told the banker, “Here’s some money. I want you to make it grow.” Handing over your money to a financial advisor to manage is the easiest option, but it’s also the most expensive. Remember, every time you involve a human in anything it costs money.

$ / Do it yourself.

On the opposite spectrum, the least expensive option is if you do everything yourself. From deciding which investment company to go with, to creating your own portfolio from scratch, everything’s on you. This is what I do.

$$ / Use a robo advisor.

And finally, there’s automated investing, or robo advisors–a mix of both worlds. You open up an account with a robo advisor, answer some questions, and a computer (instead of a human) chooses your portfolio for you. With their user-friendly designs, quick setup time, and cheaper fees than hiring a human, robo advisors are fast becoming a popular option, especially with young people. Some well-known robo advisors include Wealthfront, Betterment, and Acorns, just to name a few.

Investing already is intimidating to most people. And they know they should do it.

But seriously, what’s the easiest way to get started?

Definitely not the DIY method that I personally use. For many people it’s an app like Acorns, a popular robo advisor for first-time investors without a ton of money.

Since some readers asked for my opinion about Acorns, I downloaded the app to test it out myself.

If you’ve ever felt mystified by investing, but were interested in how to do it, then keep reading about my thoughts on Acorns: how does it work, who is it really for, and is it worth it?

*Affiliate links below*

How I Tested the App

I tried to use Acorns like I was a first-timer with little money or knowledge about investing. But my review takes into account personal experience investing on my own. To get a real feel for the product, I used it for 15 months. However, it’s important to remember that investing is really for the long haul (decades, not years!). For that reason, this experiment is going to be inherently limited.

Who Is Acorns For?

Acorns is for first-time investors who want an effortless way to save money but don’t want to choose their own investments. Further down below, I’ll expand on who it’s really for.

As for where it’s available, sorry international folks, but as of this post, Acorns is only available for people who live in the US and Australia.

How Acorns Works

One of the biggest barriers to investing with big companies like Vanguard or Fidelity are the required minimums. You generally need at least $1,000 to get started. A thousand dollars can be really hard for people to save up.

With Acorns, that problem goes away. You can get started with as little as $5.

And with a tagline that touts “investing your spare change,” Acorns also promises to be effortless. You can set up recurring deposits (up to $20 a day), but what makes Acorns unique is its Roundup feature.

How Roundups works: you first link up checking accounts, debit cards and credit cards to the your account. Every time you swipe a linked debit or credit cards, Acorns will “round up” the spare change to the nearest dollar and set it aside. Say you buy a coffee for $2.56. If you have Roundups enabled, Acorns will round that amount up to $3.00 and set aside $0.44. Once you have at least $5 in roundups, Acorns will invest that money for you.

Choosing what to invest in can be paralyzing, especially if you’re not familiar with the different options. Acorns takes the guesswork out of that, too. When you set up your account, you answer six basic questions about your financial situation and goals and Acorns then assigns you one of its six pre-defined portfolios, or mix of investments.

How Much It Costs

The subscription price changed since I first started using it. Now Acorns costs $1-$3 per month until you have a million dollars invested. But if you’re a college student with a .edu e-mail address (and put ‘Student’ down as your job) then the $1 per month plan is free. Here’s the current tiered pricing and what you get:

• $1/month – Acorns Core  – Invest your spare change
• $2/month – Acorns Core + Acorns Later – The above, plus the option of investing for retirement in an IRA
• $3/month – Acorns Core + Acorns Later + Acorns Spend – The above, plus a checking account

I chose Acorns Core and paid $1 per month. I didn’t see the need for the upgraded options since I already have a checking account and an IRA account elsewhere.

Paying $1 per month to invest feels like nothing, right? After all, it’s just $12 per year. That’s like, two Chipotle meals.

Because they charge a flat fee and not a percentage, how much you invest actually makes a difference in how your money grows.

To give you context, about 0.15% of my DIY portfolio goes to fees. But if I’m investing $50 per month with Acorns and am being charged $1 monthly, then 2% of my portfolio is getting eaten up by the fee. Considering average stock market performance is around 6-7%, that’s not nothing.

Other robo advisors charge about 0.25%. To realize that same fee, you’d need to invest about $5,000 with Acorns, which is also not nothing.

Portfolios

There are six portfolios of various risk levels, and you get matched to one based on how you answer the questions during the account set up. I thought I answered the questions honestly, but I somehow got matched with Moderately Aggressive. I decided to manually change my portfolio to the Aggressive one, so it matched the risk level of how I’d normally invest on my own.

So there’s a caveat, depending on how you answer the questions, you might be matched with a more conservative portfolio that doesn’t exactly align with your real-life goals.

Here’s the breakdown of my portfolio (all stocks):

If I’m being honest about what I’d do on my own, my DIY portfolio would actually be much simpler.

Ease of Use

Let’s talk about what it’s like to use the app. Because most investing websites are horribly non-intuitive.

I liked that I could log into the website to check up on my account. I don’t have a ton of storage space on my phone, and I didn’t need to download the app to set things up. Win!

The charts look nice, but the performance summaries need a makeover, because they really aren’t transparent at all.

That was my biggest beef: I didn’t have much context on how my account was actually doing. Sure, I saw numbers, but what did they mean?

As a “new investor,” it would be nice to have some helper pop-ups so people could learn how investing in the stock market works. For example, dividends are recorded in the activity log, but a new investor might not know what dividends are. And what’s the difference between ‘market gain/loss’ and ‘total gain/loss’?

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There also was a lack of detailed reporting. Each transaction is listed in the activity log, but I couldn’t drill down to see monthly summaries. I couldn’t plug in certain dates to check performance for just that time period. And I wanted to know the breakdown on three things:

• How much I contributed on my own
• How much I paid in fees
• How much I made with market gains or losses

Oddly those totals are scattered around but nowhere to be found on a single screen.

Performance

You invest for the long-term and 15 months just isn’t a long enough time to accurately judge the performance.

But every time I logged into Acorns I never seemed to make any money.

Each time I checked the market performance chart I was in the negatives (see chart above). It’s not a perfect comparison, but during that same time period my DIY portfolio also lost money, since the market kind of took a nose dive in the last quarter of the year. Although there were gains for seven of the months that didn’t seem to happen with Acorns.

So, was Acorns’ portfolio a total bust? Or was it something else?

Let’s start by looking at how much I contributed.

I turned on the Roundups and set a recurring investment of $50 per month. So I was adding around $55 per month to my account. As I mentioned before, I wanted to set it up like someone who’s new to investing and doesn’t have much money to spare.

After 15 months, I had $852.80. -$21.77 in total losses. $12.02 in dividends. And a $5 bonus for signing up.

Let’s dig into that $21.77 in losses. I found a chart that said I lost $8.77 in the stock market. OK, that’s understandable.

But what’s up with the other $13?

I can only assume that it was that monthly dollar fee, my friends. So I may have lost more money paying to use the platform than I did in the actual stock market…

If you are only investing small amounts of money then the dollar or so in fees has a much greater impact on your growth.

To overcome the fee you’d need to invest thousands of dollars with Acorns, but a newbie investor isn’t necessarily going to know that.

Other Ways to Earn Money

Aside from gains in the market, there are other ways to boost your earnings.

Found Money

Similar to how cash back works, you can earn money to invest by shopping through affiliate links within the app. This is pretty genius. What better use of cashback than deploying it to invest?

Noteworthy partners:

• Airbnb
• Amazon Fashion
• Apple
• Banana Republic
• Bonobos
• Gap
• Hotels.com
• Macy’s
• Neiman Marcus
• Saks Fifth Avenue
• Uber Eats
• Walmart
• Zappos

Referrals

You also earn $5 for every new sign up you refer. Although Acorns seems to do referral promotions every month, which can be profitable if you have a lot of friends. For example, I checked back in my e-mails, and I see subject lines that say, ‘earn $500 to refer 7 friends’ or ‘earn $1,000 to refer 12 friends.’ You’d have to get several people to sign up at once, but if you’re savvy, that’s a heck of a lot more lucrative than $5.

Customer Service

I couldn’t find a phone number on the website.

Again, pretending like I didn’t know anything about investing, I e-mailed customer service a message asking why I hadn’t made any money. I think this is a reasonable question from someone who’s nervous about investing and wants to know why they’ve made only a couple dollars in several months. I wanted to see how they would explain it to me.

Acorns responded by giving me a list of ETFs, some that weren’t even in my portfolio:

Hmm, not very helpful.

Closing the Account

Closing the account required a simple click, and the money transferred to my bank account within a week. Surprisingly, there was no extra charge or retention marketing to get me to stay on as a customer. The important thing to note is that the account you open with the Acorns Core subscription is taxable. That means that I might be on the hook to pay taxes on any gains. Since I cashed out the money I received a 1099 statement to report when I file my taxes.

So, Is Acorns Really Worth It?

Here’s a question to ask yourself when you read reviews on the Internet: Is the person writing the review the target audience for this product?

If you asked me if I would invest my money with Acorns, I’d tell you no. But that question is somewhat irrelevant, because I’m not their target customer.

Just because a product isn’t right for me, doesn’t mean it’s not right for someone else.

I can hear more advanced investors screaming right now. How the fees Acorns charge are outrageous. They’ll find some tiny detail to criticize that 99% of the population doesn’t care about.

What they forget about are the emotional and psychological barriers to investing.

The reality is this:

• Some people have a hard time saving up by themselves.
• Some people can’t meet the investing minimums to get the cheaper fees.
• Some will still be intimidated by other apps that are a little more advanced, like M1, Robinhood, or Stash.

And are new investors likely to care about paying $12 per year? In the grander scheme of things, probably not. I mean, people piss away that kind of money on lots of net-negative activities every day.

So, here’s my verdict. Read this sentence:

“Why don’t you just open up a Roth IRA and invest in VTSAX because it’s a 0.04% expense ratio?”

If that sounds gibberish to you, then Acorns is a totally fine way to dip your toes into investing.

Although I will caveat that investing isn’t its true strength at all. To level set your expectations, if you invest small amounts of money, you most likely won’t get amazing gains.

Where Acorns shines is how it functions as an automated savings tool. The Roundup feature truly is effortless and is the real highlight of the app. Not the investing service.

There are two groups of people who I think Acorns is perfect for:

• College kids. The Acorns Core subscription is free for them. And their paychecks might be too sporadic to steadily set aside consistent savings on their own.
• People who’ve ever said to themselves, “I can’t figure out how to save…” Many of these people probably live paycheck-to-paycheck and will find the roundups to be a painless way to save up money.

And to maximize Acorns, I’d be doing everything I can to take advantage of the Found Money feature. For example: Planning a trip? Book your lodging through the Hotels.com link on the app and earn 4% cash back to invest. It’s another way to make your account grow without much work, and helps to counteract the monthly fees.

But for people who can save thousands of dollars on their own, you might want to look into other robo advisors with cheaper fees, like Betterment or Wealthfront. Although I’ve opened accounts at both, and still think both are kind of intimidating for new investors!

For everybody else, Acorns can be used as a stepping stone to save up enough money to invest with another app that has a better fee structure.

And if you’re someone who always thought investing was unapproachable, it’s pretty cool to set up an account in five minutes, look at the performance chart and realize, ‘Hey, I’m investing!’ When it comes to money, any small win is a celebration.

If you thought this review was helpful, and are interested in signing up for Acorns, using my referral links would be most excellent. Sign up for Acorns here and get a $5 bonus.

Have you tried Acorns? If so, what do you think about it? If not, what platform did you use to start investing? Did you use an app or did you go the DIY route?

Feature Image: Unsplash