By James Rufus Koren
Los Angeles Times
WWR Article Summary (tl;dr) Los Angeles-area startup “Acorns” hopes to help people save by making saving and investing not only simple but virtually invisible.
It’s a common refrain: If you want to save money for retirement or a down payment for a house, stop buying pricey coffee. Or there’s the more recent admonition: Lay off the avocado toast.
Fat chance on that. For most people, the link between long-term financial health and a few bucks spent here or there just isn’t strong enough, even though every little bit socked away can help.
So instead of urging customers not to buy stuff, Los Angeles-area startup Acorns has a different suggestion: Save a little bit every time you spend.
The company, through its app, rounds off customers’ credit or debit card purchases to the nearest dollar and invests the difference into stocks and bonds.
The notion is to make saving and investing not only simple but virtually invisible.
“We’re not trying to preach austerity to the client, because that’s a bummer,” said Manning Field, the company’s chief commercial officer. “Some people will say, ‘Don’t have the cup of coffee.’ We’ll tell you to have the cup of coffee and invest along the way.”
That pitch has been appealing, with the number of accounts growing from 1.1 million at the end of last year to 1.8 million this month. Most accounts are small, though _ about $230 on average as of last year, the last time the company released such a figure.
Now Acorns has released an update of its app with features aimed at boosting how much customers save. And it’s looking ahead to offering more than just its saving and investing tool amid stiffening competition in the emerging business of automated money management.