This CEO Is Telling Parents That They Could Turn $5 Into $70,000
On Thursday, Acorns CEO Noah Kerner appeared on CNBC and stated that their new program could turn $5 into five figures, according to CNBC.
The company recently released a new custodial account called "Acorns Early" that helps parents save for their children. Kerner went onto explain that this outcome is reached through consistency and compounding. “We try to get people to really commit to regular small amounts, and so they are,” Kerner said. “We know through the power of compounding ... if you do the math, on $5 a day, beginning at birth, by college — based on historical averages in the market — that can add up to $70,000.”
Kerner continued saying that in 50 years the investment strategy could grow to $1 million and in 65 years $4 million. Acorns is a fin-tech company that invests spare change for users. Last month, Acorns Early was launched to help parents save and invest for their kids. Since young investors are able to take on more risk, they are investing in Acorns "Aggressive Portfolio."
Acorns currently has 7 million active users. The majority of users are enrolled in recurring deposits daily, weekly, or monthly. “It’s a really big problem in the country that people aren’t saving, and I think when you think about parents investing in their kids — saving and investing for their kids — that’s also a major problem,” Kerner said.
“It’s really exciting to see this kind of momentum where people are starting to participate, people are starting to take care of their families in a new way, take care of themselves in a new way,” he continued. “And, like you said, we make it so easy, and we condition people to become savers, and we’re proud of that.”