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Monthly Archives: February 2015

Acorns: The Perfect App for Student Investors

Many people think that in order to start investing they need to be able to regularly put away hundreds or even thousands of dollars into their investment accounts. The reason for this is because many online brokers charge a commission per trade (as well as many other fees) and it is not economical to invest small amounts at a time. Well, what if I told you that there is a way for you invest micro amounts of money such as 32 cents at a time? With the Acorns app that is available as a free download for both IOS and Android devices, you can do just that!

Acorns links with your bank account and allows you to invest your “spare change” into diversified ETF portfolios by rounding up your purchases to the nearest dollar amounts. So, for example, if you buy a cup of coffee for $2.15 then Acorns will set aside an additional 85 cents to invest for you. After you have accumulated $5.00 of “spare change,” Acorns will transfer that money out of your bank account and into a diversified ETF portfolio.

Before we go any farther, let’s take a step back and talk about what a diversified ETF portfolio is. ETF stands for an Electronically Traded Fund which is a portfolio of investments that are not actively traded based on decisions of the fund managers, but instead are automatically adjusted to maintain exact percentages of the different securities that make up the portfolio. A good example of an ETF is the SPY 500 which is an ETF whose holdings include all of the companies that make up the S&P 500 index. So, if a S&P 500 firm goes from 5% of the total S&P 500 (based on market cap which is stock price X shares outstanding) to 6% of the total S&P 500, then the SPY 500 ETF will automatically adjust by selling off shares of the firms who’s portion has diminished while buying more shares of the company who’s position has grown.  A diversified ETF portfolio is a portfolio that includes a number of different ETFs.

Specifically, Acorns gives you the option to choose between 5 different diversified ETF portfolios to have your money invested in. They range from conservative to aggressive and have been constructed using modern portfolio analysis and the advice from Nobel Prize-winning economist, Harry Markowitz.  If this all still sounds really confusing, have no fear! Acorns will ask you a series of questions about yourself when you set up your account and will spit out a recommendation of what portfolio they think is the best choice for you.

Now that you have a better idea of how your money will be invested with Acorns, let’s take a look at some more information you need to be aware of before starting an account.

Fees: Although Acorns offers people a chance to invest in micro amounts while avoiding many of the costs of larger online brokers, there are still fees involved. As of 1/1/15 Acorns charges users with an account balance greater than $0 and less than $5,000 a fee of $1 a month. Accounts over $5,000 dollars are charged a fee of 0.25% of assets per year. So an account of $10,000 would be charge $25 a year. You can calculate your fees HERE.

Registration Process: Signing up for an Acorns account is fairly easy. I say fairly because although the app has undergone major renovations and improvements since it was first released, it still has its minor quirks and flaws. Acorns is a real SPIC-insured brokerage firm behind the app and that means in order to create an account with them they must prove your identity and acquire all necessary tax information. The app makes this process very easy, but you will need to have your social security number ready. Acorns will link to any bank account and all you need to be able to set that up is your bank login information and your routing/account numbers. Although you need to always be extremely careful when providing this information online or through an app, you can be rest assured that Acorns is legit and uses industry standard encryption and security to protect your data.

**NOTE: make sure and provide the same address as the one that is officially listed on your ID. I made the mistake of using my school address when signing up and had to provide extra information such as a picture of my ID and proof of residence in order to get my account activated**

Bottom Line: In my opinion, Acorns is the perfect app to give people (especially students and millennials) a chance to see the effects of compounding gains and begin to invest without feeling a major burden on their pocketbooks. I also recommend that you think about why and what you are investing for before starting an Acorns account. Personally, I created my account with the intention of a 7-10 year investment at which point I can take that money and move it into a more traditional investment account where I have more control. Another recommendation I make is to “dial-in” the round up amount for your purchases. The default amount is for Acorns to round all of your purchases to the nearest dollar, but that amount is adjustable within the settings of the app. If you find that rounding to the whole dollar is too much, then you can easily dial it back. On the flip-side, if you would like to contribute more to your savings than you are getting through just your round ups then you can have Acorns automatically draft an additional amount from your bank account weekly or monthly.

Don’t forget, if you have any questions about Acorns or any other financial topic, you can submit them online HERE or contact the SFA Student Financial Advisors via phone, Email, or in person.

Happy Investing!

-Brian

Is it worth it?

Stephen F. Austin State University’s (SFASU) tuition in 2000 was about $2,039 per year; this is not including room and board. Since then, the tuition has increased at a rate of about 4-6 percent per year bringing it to its current rate of $5,756. Inflation and GDP have been growing at about 2 percent so this means that tuition is growing much faster than the standard living. Now, SFA is considered an affordable school with low tuition and low cost of attending. Many major universities have been increasing tuition at a much higher rate and private universities are just out of this world, for example, tuition and fees for Columbia University for 2014 were hovering around $52,000 per year. Also, this is the first time that student loan debt has surpassed credit card debt and it is currently over $1.2 trillion. On average, graduates leave college with over $30,000 in student loans that they owe, up from $18,000 average that students left college just 10 years ago.

Now, the million dollar question that everyone asks themselves, is it worth it to attend college? Well it depends; do you want to major in liberal arts or do you want a major in the STEM (science, technology, engineering, and mathematics) fields? Many individuals believe that in order to get a good job you need a good education from a good school, now in certain situations that may be correct but today the economy is very competitive. Let’s look at a Child and Family Development major as an example; in order to have a decent job you’re going to need more than just your bachelor’s degree, you’re looking at  having your master’s AND experience in the job field that you are trying to pursue. Even with all that under your belt, it still may not pay as high as high demand jobs like a IT Specialist or a statistician. Most people who choose to go that route is because they have a passion for that field and to them it doesn’t matter on how much they’re getting paid. Logic and reasoning would tell us that if you’re not going to make enough money to cover your school debt, you should consider another career. This isn’t anything against the Child and Family Development degree or any other degree; it’s just a simple example that illustrates that some people don’t do it for the money but rather a passion. People usually say, choose something you love to do and you’ll never work a day in your life, now that’s a true statement but we also have to be realistic. Bills are like clockwork, they don’t stop so it’s imperative you find a career that you enjoy and love but also make money out of it.

So, is it worth it? Well, the answer isn’t that easy to answer. One of the first things you need to do is your research, look at the job market and careers you want to do and see if the numbers are where you want them to be. When picking a school, look for the best BANG for your buck but still look for one that has a good program that you’re interested in, don’t go to a school just because of the name. Apply for grants, scholarships and financial aid; there is a surplus of money out there it just needs you to look for it. Here’s some advice, do whatever you can to avoid payday loans, title loans or any other quick cash method because there is no such thing as a free meal, there’s always a catch. Student loans should be used at a minimal and used only for what they are intended for because once those 6 months after graduation are up, you’re going to have to start paying them back, job or no job.

Here is another article from the Economist that talks more about the rising prices of higher education:

http://www.economist.com/news/united-states/21600131-too-many-degrees-are-waste-money-return-higher-education-would-be-much-better

-Antonio

CHOCOLATE COVERED STRAWBERRIES CONTEST

Typically chocolate covered strawberries are way over priced for Valentine’s Day. Why spend double the money for only half a dozen berries?? My suggestion is don’t.

What if I told you that Instead you could watch the video below,make your own, and possibly make a little $$$$ too!? Well, you can!

The video below will walk you through how to make your own chocolate covered strawberries. These strawberries are so easy to make that I’ve made them for several other occasions or just because.

Here are the details for how your chocolate covered strawberries could win you a Kroger gift card.

To be entered into the competition just follow these simple steps.

Step 1. Collect the ingredients for your chocolate covered strawberries. (Make sure to write down the price of every ingredient or keep your receipt(s), you will need this later)

Step 2. Prepare your chocolate covered strawberries. You can follow the instructions in the video or be creative and put your own spin and touch on your strawberries, it’s up to you!

Step 3. send an Email to student.financial.advisors.sfa@gmail.com and include the following:

a. picture(s) of your chocolate covered strawberries. (presentation counts!)

b. A list of ingredients used, how much you paid for each ingredient, and a total amount spent.

c. 1-3 sentences on why your strawberries should win. You should share any money saving techniques you used to purchase ingredients, tips that make your strawberries better, etc. Be creative!

We will be accepting submissions from Wednesday. February 2 until midnight of Monday, February 16. This means that you can enter your strawberries into the competition AND enjoy them with someone special for Valentine’s Day. Each submission will be judged for 3 equally weighted criteria: The appearance/creativity of the strawberries themselves, budget efficiency (did you get the most bang for your buck?), and your write-up of why you think your strawberries should win. There will be a 1st and 2nd prize. One will receive a $25 dollar gift card to Kroger and the other a $10 gift card to Kroger. We will contact the winners via email within 24 hours of the submission deadline.

Enjoy!

-Jenny Rosales

P.S. There are no bonus points for sharing your strawberries with the Student Financial Advisors, but if you obliged to do so you can always come visit us in suite 162 of the Mcgee Business Building.

Amazing Marinara

So in case you don’t already have a recipe chosen for your special someone,  I’ll share with you one of my favorites! It’s very easy and the longer you simmer the sauce the better the flavor. In the video recipe she does not add meat to her sauce but I do.

I cook about half a pound of sausage and the other half ground beef. Season the protein as you like just go easy on the salt because the marinara calls for it too. Once fully cooked and the grease is drained add to your marina and let it simmer.

Serve with your favorite pasta and enjoy!

http://www.cbs19.tv/story/25084851/favorite-cookbook-recipe-featured-on-fresh-ideas

-Jenny Rosales

If You’re Celebrating Valentines Day….

For those who will be celebrating someone special on Valentine’s Day this is for you. I have a few tips on how to create a memorable V-day without breaking the bank. Beware this year it lands on a Saturday, so make sure to have reservations if you plan on having dinner at a restaurant. However I have different solutions to avoiding a high priced menu. This is your chance to earn some brownie points with that special someone and show them how much you really know.

Solution #1: The DELUXE

Buy their favorite bottle of wine or bubbly (if of age of course) prices vary on where you go but some liquor stores offer cash and or student discounts. Next, off to the grocery store. Buy the items you need to prepare their favorite meal. If you can’t decide on what that is I will be posting a recipe for the best marinara sauce! What’s more romantic than Italy’s most romantic food…pasta!! While you’re there pick up 1 box of strawberries and a bag of chocolate chips and this will solve dessert ; plus give you the chance to enter to our Best Budgeted Chocolate Covered Strawberries Contest.  I’ll share how to make chocolate cover strawberries in another post along with the rules to submit for a chance to win a $25 gift card to Kroger! Do you have a good movie and popcorn? If not rent one and have snacks. Another option go to the theater but buy tickets ahead of time even if the showing isn’t until 8pm (there is a theatre on campus too that is less expensive). Whether y’all stay at home or go out don’t check your phone during a movie. Sometimes all you need is to be disconnected from the world while you sit next to that special someone.

Solution #2: Outdoor Fun  

SFA has a cute pond over by the football stadium that is a home to serval ducks. An inexpensive date doesn’t mean it isn’t thoughtful or sweet. Depending on the weather take a thermos with hot coco or something that is not in a glass container. Also be sure to bring bread with you to feed the ducks. Jimmy John’s sells day old bread for 50 cents a loaf. End your valentines date with flowers that you stashed in the back seat for the final surprise.

Solution #3: Natural Beauty

SFA has one the most beautiful arboretums. You will find a variety of plants and flowers. Take a stroll through the gardens as you play soft romantic music on your phone. You could buy a bouquet of flowers and hide them somewhere in the arboretum and then when you get to that spot surprise them! Chocolate work great too!

I wish you all a very happy and special Valentine’s Day!

If you have a unique way of celebrating without breaking the bank feel free to send it in!!

-Jenny Rosales

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