Acorns – Found Money (Actually Rebates), and a Basic Conundrum

The New Offering

I have to say I’m feeling pretty good about myself now.  If you have read this blog for a while, you’ll know that I tabulate all rebates I receive (i.e. 5% cash back when I shop at Target with my Red Card, or when I get a rebate from Ebates.com) and invest an equal amount in our investment accounts (usually the Prosper.com account – currently returning 6.23% Y/Y).

Now Acorns offers a rebate program through its partner retailers and service providers.
Now Acorns offers a rebate program through its partner retailers and service providers.

When contemplating this strategy, I decided that while you only receive a rebate when you spend money, and therefore it would be unwise to categorize them as earnings, they are still a source of money that didn’t exist before.  If a $20 purchase actually costs $19 due to a 5% rebate, then I have one extra dollar I wouldn’t have had otherwise.

I could just leave it as that and count a $19 instead of a $20 debit on my cash account, but that would imply that I simply bought a cheaper product.  Comparison shopping is something I already do, so if I’m purchasing something, I’m getting a good market price for the product.  Rebates are special…they aren’t just a pricing difference, they are a special gift – a thank you from the retailer to the customer for the customer’s patronage.  For that reason they are more like getting an unexpected or exclusive bonus.

As a bonus, or an unexpected windfall, rebates are more like finding money on the street.  Therefore, I treat all rebates as “found money” and invest them – so that my find prospectively grows my windfall.

Wouldn’t you know it, but Acorns agrees with me!  They recently launched a program wherein companies pay money into your Acorns account after you shop with them.  Acorns doesn’t call it a rebate, they call it an investment…but that difference is just a “six of one, half a dozen of another” distinction.

Better yet, guess what they call it?  Found money.

The Condundrum

Today I signed up for Blue Apron, which I’ve been wanting to try for a long time.  By signing up through Acorns, I received a $10 rebate on my first order, and also $30 from Blue Apron deposited into my Acorns account.

That’s $40 in found money which cost $49.99 – an 80% rebate.

More importantly though, how long will it take to make up the difference and have that rebate/found money working proactively for me?

Currently, each $1.00 I have in Acorns returns an additional $0.0869 Y/Y (this can of course go up and down, and inflation is about 2%, but lets keep that discussion for another time).  Assuming no change in performance, $40 will generate ~$3.48 in a year, so I’ll be paid back my investment cost in just under three years.

Is that worth it?  Being relatively young, yes it is.  Once I’m paid back then I’ll still have many many years for that money to work for me.

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