We all know that investing in shares is a smart way to use our money (to make more money).
If you’re like most people however, you get stuck. You don’t know which shares to buy, you don’t have the minimum amount to invest (often $500+) and you simply put the concept of investing into the ‘too hard basket’ at the peril of your future finances.
Raiz Invest is a company that is looking to change that (pardon the pun); it’s sole focus is investing your spare change to remove the above barrier(s) to entry, making it easy for even the most inexperienced investor.
It’s an app that takes the round up method of budgeting a step further.
What is Raiz Invest?
Raiz Invest used to be called ‘Acorns’ – they decided to change their name to break away from their American owner and focus on Australia.
Quick note: You can get $5 credited to your account for FREE by signing up to Raiz Invest from this post.
You simply link your everyday bank account or transaction account to the app and put your investment strategy on autopilot.
For instance, if you purchased a coffee for $3.50 each morning – the app would automatically round the transaction up to $4 and invest the 50 cent difference into shares. You can even toggle the settings to round up more or less, depending on how aggressively you want to start investing your spare change.
What is the cost of investing with Raiz Invest?
The app is 100% free to download.
There is a yearly investment fee of $15 if your portfolio is less than $5,000. If your investment is more than $5K, you will be charged 0.275% of your total investment yearly.
So as an example:
- $5000 invested = $15 per year
- $10,000 invested = $27.50 per year
These fees are very cheap compared to most share buying services. For instance, if you were investing via a major banks online share trading platform – you would likely be charged $20-$30 to simply buy any shares, no matter how much you have to invest.
Using the Raiz Invest app (review)
Download the Raiz Invest app
Simply download the app from the Apple App Store or Google Play store.
Setup your account and personal details
The app will then require you to setup your personal details and create an account. In doing so, the app will ask you a range of questions to help understand who you are, what you want to achieve and use this information to suggest what type of risk you should consider when investing.
Link your bank account or credit card
Once you’ve created your account, you will be asked to link your bank account or credit card (credit cards cannot fund your investments however, this is just for monitoring your spending). The app covers all the major and minor banks in Australia, making it super easy to get investing.
Tweak your settings and round up methods
Upon connecting your bank account, it’s then time to choose the amounts you wish to round up on common transaction types. You can choose what to do if you’re purchase is an uneven number along with what to do if it’s an even number. Roundups can be between 1 cent to $1 – the choice is yours.
Select how you want your change invested
Choose from five different fund types. Ranging from super conservative (cash for example) through to aggressive (which focuses on high potential long term shares).
Choose the threshold by which your spare change gets invested
Every time you make a purchase, Raiz Invest will now be rounding the purchase upwards and debiting your account the difference. A transaction for $15.44 will see Raiz Invest round up to $16 and debit your account 0.56 cents.
This 0.56 cents will then sit in your Raiz Invest app until it reaches your investment threshold; by default this is $5. Upon having $5 in your account, it will automatically invest this into your fund.
Through the settings you can set this threshold to be higher, such as $50 if you wish. Given there are no fees each time your money is deposited into the fund, it probably makes sense to leave the threshold at $5 to quickly get your spare change into the fund and working hard for you.
How do you withdraw your money from Raiz Invest?
You can simply withdraw your funds, directly into your bank account, at any time. No strings attached.
Can you make bigger once off deposits?
You sure can. You can do an opening deposit or regular bigger deposits; view Raiz Invest as simply quick access to investing in the share market via regular round ups and occasional deposits (if you so wish).
My 30 day trial – how has Raiz Invest worked for me?
Since downloading the app 30 days ago, I have managed to save $196 through rounding up my purchases and an initial deposit of $50.
The money is invested in an aggressive fund (as I have a lot of time before retirement) and is currently showing good growth results.
Like any investment, it’s about patience, long term investing and not worrying about the day to day. So I try not to worry about going down 5% or something on any given day, it’s about how my money will perform over the next 5-10 years.
Growth of my money aside, at my current trajectory I will have saved and invested $2,400 in 12 months, or $12,000 over five years. Add the returns I may (or may not) make, and I can quickly see this app as a great way to consistently buy shares with low cost.
I love that my $2,400 a year is getting spread across a range of shares that I should probably invest in, yet never did because it was too hard.
My final thoughts on why I love the Raiz Invest app to save and invest money? Raiz Invest App lets you invest the money you’ve already earned, into shares, to help you make more money and diversify your personal finance. Get the app, give it a go and set a portion of your investment strategy to autopilot.