Which app should you use to invest betterment or acorns? What are the pros and cons of each app
And which one makes the most sense for you? I've been using both of these apps for about two years now
So watch this video for a detailed honest review. What is that everyone? I'm rose and welcome back to my channel
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both of these apps make investing really easy and they'll both help you invest your money safely whether you're an
Experienced investor or you're a total beginner. That being said there are important differences for each app that I want to point out
So I'll go over these differences one by one the biggest difference by far is with funding options
Acorn's offers roundups, which is a feature that lets you invest with your spare change by rounding up
Your debit card purchases betterment doesn't offer round ups, but if you're pretty good about sticking to your monthly savings goals
I don't think you really need round ups anyway as you can see with acorns
I've only saved a couple bucks over the last month with round ups because I
First of all, I don't really spend on my debit card or credit card much
I do a lot of cash but also because I'm really disciplined about doing recurring deposits and not
Changing that because let's be real. You're not gonna get rich just from investing your spare change
It's really just the way to help you get started
So you can just add a little bit a few cents here and there to your investments in the background of your life
so while the roundup feature is what attracted me to acorns in the first place the fact that betterment doesn't offer it is not a
Deal-breaker for me now
Both apps give you the option to make recurring deposits on your own schedule
Whether it's weekly bi-weekly monthly on a chosen day of the month or day of the week now
Let's compare the investment options at betterment vs
acorns both of these Robo advisors invest your money in fractional shares of ETFs or
Exchange-traded funds and that gives you diversified exposure to hundreds of different stocks and bonds
They both offer good investment portfolios that are designed to maximize your returns while minimizing your risk
So in that sense, they're very similar. That being said. I do prefer betterment approach to investing
that's because betterment does what's called goals based investing where as acorns has a more basic and traditional approach to
investing goals based investing is a relatively new approach that
emphasizes investing with the objective of achieving specific life goals
So rather than keeping all your money in one general investment portfolio and having all your money in to in one big bucket
Betterments approach separates your money in two different buckets and has a different investment portfolio for each bucket
For example, this is my betterment account
I have different life goals and they each have a different timeline and different target amount
I have a goal to have $5,000 to take my parents on vacation in two years
I also have a goal to have a hundred thousand dollars of annual retirement income in thirty years
And I also have a goal to build an emergency fund of twenty thousand dollars in three years
so everyone has different financial goals in their life and you can see why it doesn't really make sense to have all of
Your money in one bucket the way you'd have to do at acorns. So for my goal to take my parents on vacation
betterment has a
32% to 68 percent split between stocks and bonds
But for my retirement goal betterment has my money in ninety percent stocks and ten percent bonds
That's because the longer my time horizon the more I should have in stocks. You see it's all about your time horizon
How you should invest your money? It depends on how much money you need for your goal
and when you need it and Federman really gets that now at eight corns their investment approach is not as
specific or targeted you only get five portfolio options ranging from
conservative to
Aggressive and they don't ask you what you need the money for or when you need it by all they care about is what risk
Tolerance level you're comfortable with but you know what? It doesn't matter what your risk tolerance is
The real question is are you gonna have enough money to actually buy your house in five years?
or are you actually gonna be able to
Have enough to retire when you turn X age
So I think that acorns cookie-cutter five portfolios approach to investing
It doesn't really fit into how most of us actually live our financial lives
Because the reality is we all have different goals with different timelines and our money should be bucketed and invested accordingly
Something else that betterment offers that acorns doesn't have is a wider range of account types
For one Fetterman offers a savings account called with smart saver
I got really excited about the smart saver account because it pays a 2% yield with no minimum balance and because the interest comes from
US government bonds you don't get charged federal taxes on the 2% either whereas at acorns
Although you have the option to link your checking account
They don't offer an in-app savings account for you betterment also gives you the option to open joint accounts
So if you have a significant other and you want to both be owners on your investment account
Then you won't be able to do that at acorns. I also like that with betterment. I can name each of my goals
So I'm always reminded what I'm saving for
This not only keeps me motivated and on track
But I just love when things are organized and clearly labeled even in my house
It makes me happy when I know where everything is and what it's for and everything is all nice and organized
So it's no different when it comes to my money. Ok
Now let's talk about cost ever since these Robo advisors came on the scene
It's totally made investing a lot cheaper and affordable for the average investor
Which means that rather than having an actual human manage your money and make decisions for you
You have algorithms doing it all for you
So both betterment and acorns are going to be way way cheaper than hiring a real-life financial adviser betterment
They have a fee of 0.25 percent
So if you have $1,000 with betterment
You'll pay 2 dollars and 50 cents annually with acorns because they have a flat fee of $1 per month if you have
$1,000 with but with acorns you'll pay
$12 annually, so $12 is almost five times more than betterment for the same amount of money
So this is the downside to acorns fee structure
If you don't have a lot of money invested
Then that flat fee works out to be a big percentage of your assets once you have $5,000 or more
That's when a flat fee versus percentage fee starts to be a better deal for you
So what's the verdict if you need a lot of hand-holding then go with acorns, even though the flat fee isn't great
The app was designed
specifically for novice investor
so the interface and the features are as pared down and dumbed down as possible and it'll make
Investing or get to get started investing really easy for you
If you need an app with robust features to help you with multiple
Financial goals and needs and you want a more fine-tuned approach to investing then go with betterment think of acorns as the training wheels
It's good for getting started. But as your life gets more complex, and you need a better way to organize your finances
You'll probably outgrow acorns and move your money to a place like betterment at the end of the day
Which app you choose isn't going to make or break your financial future
Just go with your gut and give one of these apps a try the sooner. You start the sooner
You can start putting your money to work to learn more about money and investing make sure you also check out these two videos
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Always remember to go after your dreams
unapologetically and to live life on your terms
Cheers