Loose change could add up to a house

A new investment app, Acorns, will help young people looking to save by letting first-time investors put their loose change to good use.

The app works by allowing customers to gain shares, using the loose change from their spending, in a portfolio built by Nobel-winning economist Dr Harry Markowitz.

“If you spend $3.30 on a coffee, (Acorns) will round up that 70 cents extra and invest that into the market for you,” Acorns Australia MD George Lucas said.

“It’s designed to help people invest their money into the markets by linking what we do naturally – spending – with saving or investing.”

Yay @acorns I finally reached equilibrium in your app. 🙂 #investing pic.twitter.com/bnCFROat6Y

— Nathan Morales (@SFNGM) July 29, 2015

Beta testing of the app will happen in October or November.

In the lead up, Lucas outlined four investment strategies people aged 18 to 35 can use to set themselves up for a comfortable working life.

Lucas’ tips to get ahead in investments

1. Have a separate savings or investment account that is difficult to access.

2. If you’re trying to save for a long-term goal, like a house, leaving a bank account may not get you there.

3. If you’re in the stock market, build diversified portfolios – 10 or 20 different stocks.

4. A lot of value is from asset allocation. “You can get more value out of managing which asset classes – property, fixed income, the share market – are going to perform better,” he said.

Sam Lally, with Buyer’s Advocate, said any technology that can help anyone become a more efficient investor is worthwhile and should be looked at.

“Everyone’s time-poor these days so (it’s good to have) as much technology as possible to make it easier for everyone, rather than flicking through the newspaper,” Lally said.

Since father-and-son pair Jeff and Walter Crittenden founded Acorns in California in 2012, 900,000 people have become members of the app, according to the company.

The full Acorns product launches in Australia early next year.

Screen shot of the Acorns website