Just saying the word “investing” instantly draws to mind some old, working-stiff accountant. Besides, managing portfolios and 401(k)’s and 123(4)’s and whatever kinds of financial jargon out there isn’t for the average college student. We don’t even want to think about investing for retirement — we haven’t even graduated yet!
But what if I were to tell you that putting off investing now could cost you hundreds of thousands of dollars upon retirement? But wait, what if I also told you there was a way to invest effortlessly now and without even doing anything?
All this and more could be yours if you just… download an app? That’s right! In today’s thriving technology landscape, companies are making it easier than ever to invest. This is great for us college students who might not even know where to start!
An amazing new company simply called Acorns has developed an app that rounds up each purchase you make on credit or debit card purchases to the next dollar. It then invests this spare change into a balanced portfolio.
This portfolio can even be fine tuned by you if you have some knowledge on investing or added to whenever you want to throw some extra money into it.
This might not sound that revolutionary, but it really is as far as changing the way young people think about investing. Sure, programs like this have existed for years on debit cards, rounding up purchases and putting it in a savings account.
However, Acorns allows you to invest into something much more lucrative than your savings account without even thinking about it.
This is a huge deal for a generation of consumers who are hesitant to invest or even hesitant to think long term about their finances. So why is investing something you should think about now and not when you’re 40 or 50?
In order to explain how important investing now can be, I’m going to use a really simple example. Say you invest $5,000 per year into an investment that yields 8 percent average return and everything else held constant. You start saving at the age of 25. Just this one investment alone will be worth $1,295,000 when you retire at age 65. That’s not too shabby.
But what if you didn’t start investing until you were 30? That same investment is only worth $862,000. You could say it costs you almost $87,000 per year to not invest early!
It’s simple when you look at the math that investing early pays off and I mean REALLY pays off. So for an app like Acorns to get students comfortable with investing money (as in not just simply putting it into a savings account or spending on beer), by the time students have settled into their careers and have extra income, they will know that investing their money is their best option for success.
Unfortunately, Acorns is only available for iPhones right now, but it will soon be on Android as well as on a fully-functioning website.
While Acorns might not be for you, it is crucial to know that whether you understand every angle or not, investing early is the best way to financial success in life.
While it doesn’t take a Wall Street broker’s knowledge to be able to start investing, it does require discipline. I applaud Acorns for what it sets out to do — make investing simple and effortless for anyone.
Now, what are you waiting for? Go download the app and start making your money work for you today!
