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Acorns vs Stash
The key to creating a sustainable financial life is to take the money that you are earning and use it to make more money. This is something that has become more and more popular over the course of the last decade or so. The reason being is that it is becoming easier to take control of your own finances. Investing your money today is entirely different than it was just a decade ago. That is making people stray away from putting all of their money into a 401(k).
Additionally, the mass of innovation in the fintech industry has been immense over the last decade as well. In this mix, two companies have come forth to offer some brilliant financial services. These companies are Acorns and Stash. The two platforms have many similarities between them and the basis of both of these apps is long-term investing; these are absolutely not apps for day trading of any kind.
Getting into investing at a young age is an excellent way to generate some wealth down the road. This can be a great benefit to you when you are looking to make a big purchase or retire. With all that being said, let’s walk through the features of both Acorns and Stash so you can decide which option best suits your specific needs.
Let’s get started looking at Acorns vs Stash!
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Key Features of Acorns
Acorns is a robo-advising investment app that takes just about all of the work out investing for you. Robo-investing is the process of automating your asset allocation plan so that it is entirely taken care of for you. This means that you do not have to pick which stocks to buy, which ultimately takes a lot of the painstaking research work out of the picture for you.
Acorns is a great app for people who are brand new to investing and may not understand how to purchase stocks individually. The automated assistance of a robo-advisor is certainly a great way of taking away the uncertainty that comes with beginning your investing life. This makes it so that you are able to invest your money without the pressure of making all of the decisions yourself. That is not to say that there is no risk in investing with Acorns, but instead of you making the decisions there are financial professionals that do that for you.
It’s not surprising that investing with Acorns has become very popular due to their most notable feature, which is the automatic investments of spare change. Acorns have a feature that makes it so every time you swipe your debit card the purchase is rounded up to the nearest dollar and that additional change is put into your investment portfolio.
For example, if you were to purchase a sandwich for $4.50, Acorns would round that purchase up to $5 and then invest the additional $0.50 into your account. This is a practice you’ll hardly notice is even happening and, if done consistently, can grow to be a significant mass of money over time.
The platform even has a feature that shows the potential of your current portfolio with the actions that you are taking right now. This is not something that is guaranteed to happen, but the hypothetical numbers are based on real historic stock market movements. Ultimately, the basis of Acorns investing is the art of compounding, if you allow your money to sit and earn that compounding return, then you are likely going to be sitting on a great mass of money that you can do as you please with.
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Types of Acorns Portfolios
Acorns offer different kinds of portfolios so you can put your money in a spot that you feel most comfortable with. This is essentially the part of Acorns that is going to require the most work as you are going to have to decide your portfolio for yourself.
This is certainly not a hard thing to do though. Portfolio styles range from conservative to aggressive; the more aggressive that you are the higher return you can get. With conservative portfolios, you are putting yourself in a position to not lose any money and still have the potential to some upside.
In order to get a grasp on the different kinds of portfolios offered by Acorns, here is an overview of each portfolio.
- Aggressive: This portfolio is meant for someone who is willing to deal with some volatility in their portfolio with potential at higher gains. In this portfolio, your investments will be diversified by the following percentages.
- 55% Large Company Stocks
- 10% Medium Company Stocks
- 5% Small Company Stocks
- 30% International Company Stocks
- Moderately Aggressive: There is also a higher threshold of volatility in this portfolio so you are going to want to make sure that you can take on a higher level of risk with this portfolio. In the moderately aggressive portfolio, your investments will be spread out with the following allocation.
- 47% Large Company Stocks
- 6% Medium Company Stocks
- 3% Small Company Stocks
- 24% International Company Stocks
- 6% Short Term USD Bond
- 14% US Aggregate Bond
- Moderate: With a moderate portfolio, your investments will start to become more conservative. Almost half of this portfolio is tied up in company stocks which means that there is certainly still a risk, just not as much. The allocation of this plan is as follows.
- 35% Large Company Stocks
- 5% Medium Company Stocks
- 2% Small Company Stocks
- 18% International Company Stocks
- 12% Short Term USD Bond
- 28% US Aggregate Bond
- Moderately Conservative: In the moderately conservative portfolio, you are going to be gearing more towards bonds as opposed to stocks. There is a significantly lower risk assessment with bonds so this is great for someone who cannot afford much risk. This portfolio is broken down with the following percentages.
- 24% Large Company Stocks
- 4% Medium Company Stocks
- 12% International Company Stocks
- 18% Short Term USD Bond
- 42% US Aggregate Bond
- Conservative: With a conservative portfolio, you are taking on as little risk as possible. This will bring on less capital gain in the long run but there is almost no chance of losing your money with this portfolio. The conservative portfolio is broken down with the following percentages.
- 20% Ultrashort Term Government Bonds
- 20% Ultrashort Term Corporate Bonds
- 20% Ultrashort Term Corporate Bonds
- 20% Short Term Government Bonds
- 20% Short Term Government Bonds
Understanding the different ways of investing with this platform is very important when going into a robo-advisor investing app. When debating on which of these you would like to go with, it is important to assess your risk tolerance. The truth of the matter is that stocks have the ability to drop in value, though, at the same time they carry far more upside potential than a bond does. If you have a high-risk tolerance, then you are going to want to go with either the aggressive or moderately aggressive portfolio.
All in all, making sure that you understand where you are investing your money is a very important part of getting into investing. Luckily, you do not have to do intensive research of dozens of stocks in order to determine which ones you want. The robo-advisor does that part for you.
Since Acorns is an app that offers robo-advising, it is going to charge you some fees. This is understandable due to the fact that there is a legitimate service that is being provided for you. The fees are not something that is really going to break the bank, but they can come out to a high percentage of your portfolio depending on how much you have stored in Acorns.
Services provided by the Acorns app offer flat rate fees as opposed to a percentage of your portfolio. As an Acorns investor, you can expect to pay anywhere from $1-$5 per month depending on which services you are enrolling in. This is a small price to pay for the returns that you are likely to see if you are sticking to Acorns for the long term. If you think of it this way, you’re probably spending triple that amount on Netflix every month, so it is certainly worthwhile to spend a few bucks a month on your future. The downside is, if you have an account that is only at $100 then $5 is 5% of your portfolio.
While it is not something that is going to break the bank, these fees can be a good chunk of your portfolio percentage-wise. The important thing is to shoot to have much more than $100 in your account. If you have thousands of dollars invested into Acorns, then a couple of dollars per month is going to essentially be less than one percent of your portfolio. Overall, the fees with Acorns are entirely understandable for their robo-advisor model.
Other Notable Features of Acorns
Acorns does have some other features that are getting a lot of attention from their users. These features have proven the innovation of this fintech app as they have been growing as a company since the start of the business. Here are the notable features that Acorns offer.
- Spend: With spend, you can open a checking account right on the app. You will receive an Acorns debit card that you can fund with a direct deposit. With the debit card, you can use it anywhere and get the spare change round up and can also use the ATM for free with thousands of ATMs.
- Early For Kids: This feature is excellent for parents who are raising children, with Early for kids, you can set up recurring investments that appreciate over time. Once your child turns 18 you can turn the portfolio over to them.
- Later Starts Today: With later, you can invest money just as you would into your investment account, only with later you are investing in a retirement account. This money cannot be withdrawn until age 59 ½ but can provide a nice lump sum of money later in life.
These features aren’t necessarily the main reason why you would start an investment portfolio with Acorns, but they certainly help make the app an even more useful tool for investors and people looking to improve their personal financial situations.
Everything that Acorns offers is solely for the benefit of their users and they have done an excellent job at satisfying users since the start of their business. All in all, Acorns is a phenomenal financial tool that has made investing simple for everyone.
Keep reading for more on Acorns vs Stash.
Features of Stash
Stash is another innovative financial services app that has set out on a mission to make investing easier for everyday people. It is very similar in the sense that they are looking to make beginners feel less intimidated when first getting into investing.
Stash is a phenomenal tool for those who are seeking assistance in selecting investments. They do this by asking a series of questions to users who set up an account. These questions are meant to determine the would-be investor’s risk tolerance. Once that is determined the user is then given a list of suggested ETF’s and stocks to purchase. They use algorithms to pick out assets that make sense for your specific financial situation.
Stash even suggests how to weigh your investments with an asset allocation plan. They will note which investments should serve as a foundational base for your portfolio and offer you educational resources for you to make an informed decision.
This app differs from Acorns in the sense that the investor is responsible for making the final decision. Acorns will purchase stocks, bonds, and ETF’s for you; with Stash, you can decide if the asset allocation plan shown to you is a good fit, even though it usually is.
Everything is Laid Out
When given a list of assets to invest in, Stash will give you a full overview of what you are buying into. They will first walk you through a synopsis of the investment and what the goals of that company are if it’s a stock. Then they will assess the level of risk that comes with that asset, which is basically showing you how volatile that investment can be.
In regard to ETF’s, they will provide you with a full list of the investment’s holdings as well as the proper expense ratio. Ultimately, what they do is put everything on the table for you to see exactly what you are investing in.
There is an underlying benefit of all of this. With Stash, you are being given all of the information necessary to make an informed decision, but you are also learning what criteria are needed in order to analyze a stock of your own. This will make it so that a year into investing with stash, you will be very comfortable assessing your own stocks and ETF’s.
Plans and Pricing
Stash offers a few different plans that can all be a good fit, depending on your particular needs. The best part about it is that you can start with a lower-priced plan and then grow into bigger plans with more features as you need more functionality to grow and manage your portfolio. With that being said, let’s take a walk through the different plans and the prices that come with them.
- Beginner: With the beginner plan, you are set up to start investing and are able to use their banking system with a debit card. You’ll also get savings tools, investment advice, and an offer for $1,000 in life insurance provided by Avira. The cost for the beginner plan is $1 per month which is a great price for all of the value that you are getting.
- Growth: With the growth plan, you get everything from the beginner plan and then a few extra amenities. You are able to take your investments to the next level with their smart portfolio. You’re even able to save for retirement through either a Roth or Traditional IRA. This will in turn give you the tax benefits of saving for retirement. Then, in addition to the investment advice offered in the beginner plan, you also get personalized retirement advice. You are able to enroll in this plan for only $3 per month, which is a phenomenal price if you look at all of the benefits you will be receiving.
- Stash+: This plan is their most valuable plan; it offers everything from the growth plan and adds some great benefits that you can receive even more value from. With this plan, you can invest in your children’s future through their children’s investment platform. You’ll also get exclusive stock back bonuses and investment and retirement advice that goes beyond what they offer in the other plans. Then, to top it off, you are offered $10,000 in life insurance provided by Avira. The cost for this plan is $9 per month, which is much more expensive than the other plans offered, but it comes with some excellent benefits.
If you are just getting started with the world of investing, then you are likely to get what you need out of the beginner plan. This will have you steering yourself in the right direction so that as you gain some experience you will be able to move to the bigger plans. Overall, choosing the right plan is simply understanding your current situation and what your goals for the future are. Getting started now will certainly have you sitting in a better financial situation a year or two down the road.
Acorns vs Stash. Which is Better?
Acorns vs Stash? Both of these apps provide some excellent ways to break into the world of investing, but one is going to be more suited towards what you are looking for specifically.
The robo-investing model that Acorns offers is ideal for those who are looking to invest but are a little wary about being able to purchase stocks and ETF’s on their own. So, if you are someone who would like all of your investing to be passive then Acorns is an excellent option for you. There is nothing wrong with automating your investments in this way, if you put your money in Acorns for the long term then you are likely to see great amounts of money come your way down the road.
On the other hand, you may be looking to learn about investing and how to choose stocks so that you have more control over your portfolio. If that is something that sounds viable to you then Stash is likely going to be the best option for you. If you follow the advice that is given by Stash for a certain period of time, then you are going to better understand how to analyze stocks to see which ones you’d like to buy. Basically, what you are getting with Stash is more control but with more control comes more responsibility.
Each of these is a great option and there is nothing stopping you from opening portfolios with both accounts. You could have peace of mind knowing that Acorns is doing great things with your money while building up a portfolio that you have total control over with Stash.
Acorns vs Stash: Parting Thoughts
Investing your money has become an essential part of life, especially as traditional pensions have largely gone away. Growing wealth and saving for retirement by investing has become more important than ever. There are now more options to invest and save than ever before, especially for people who are not wealthy to start with. Acorns and Stash are definitely great financial services platforms that are worth checking out if you want to start building your portfolio right now.
It’s also important to note that while both these companies are terrific institutions, neither Acorns nor Stash is built for day trading or getting rich quickly. However, if you can consistently work towards growing your portfolio over an extended period of time then you are certainly going to be in a better position financially down the road. The key to utilizing these apps is sheer persistence, you have to be in it for the long run.
All in all, Acorns and Stash both offer innovative services that are geared towards helping you get into the stock market and steadily build your wealth. If you are just starting out and aren’t sure where you should go to invest then either of these two options is certainly going to suit your needs and propel you towards your financial goals.
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