Can Credit Unions Help People Invest?
As I've matured from an angsty teen to a curmudgeonly Old, I've become very aware of the necessity to invest.
"INVEST OR DIE ALONE WORKING YOUR SECOND JOB AT WAL-MART AT THE AGE OF 83!" the headlines scream, which is not my idea of fun in old age.
So I've bought into it, starting with my company's excellent 401k plan. However, when it comes to actual investing (portfolios? bonds? stocks? CNBC?) I have no idea what I'm doing.
A new app called Acorn aims to give low level prospective investors like myself an easy entry into the world of investing. The idea is pretty simple - it rounds up every transaction that you make with your debit card and automatically invests it. It takes out a lot of the guesswork for you - you can chose to be very conservative with your investments or extremely aggressive.
Many financial institutions have long had programs in place that round up purchases and place the excess in a savings account. The first bank account I opened in college offered it for free, even matching 5% of deposits up to $600 the first year. Because saving money wasn't a concern at that stage in my life, it gave me a glimpse of the benefits of actually saving money, and I've had a full savings account ever since.
The same way banks and credit unions can bake programs like that in directly, imagine if a credit union offered this service directly to it's members? Acorn charges a monthly $1 fee, plus a small percentage of the money made. Depending on how much you're spending, that can take a bite out of your profits - thought probably not more than having a broker or making a trade would.
Apparently, Gen Y is the most fiscally conservative generation since the Great Depression. We like to save money, yo.
Financial literacy extends to all aspects of smart money management. In addition to teaching the next generation about proper budgeting and saving, why not show them how to make their money grow?
What say you? Is this something that any credit unions have implemented right now? Any obvious drawbacks? Let us know in the comments!
DeAndre Upshaw is a former Young & Free Texas Spokester. He's a marketing professional living in Dallas and a Beyonce enthusiast. DeAndre is the host and executive producer of The State of Awesome. Follow him on Twitter and check out his personal website.