Estimate the potential growth of your Acorns investments over time, considering your initial deposit, recurring contributions, estimated returns, and Acorns' monthly fees.
Understanding Your Acorns Investment Potential
Acorns is a popular micro-investing app designed to help individuals start investing with small amounts of money. It works by rounding up your everyday purchases to the nearest dollar and investing the spare change, alongside allowing recurring and lump-sum investments. This calculator helps you visualize the potential growth of your Acorns portfolio over time, taking into account key factors.
How the Acorns Investment Calculator Works
This tool simulates the compounding effect on your investments. Here's a breakdown of the inputs:
Initial Investment ($): This is the lump sum you start with in your Acorns account. Even a small initial deposit can make a difference over the long term.
Monthly Contribution ($): This represents your regular contributions, which can come from round-ups, recurring deposits, or a combination. Consistent contributions are a cornerstone of successful investing.
Estimated Annual Return (%): This is the average annual growth rate you expect from your investments. Acorns offers diversified portfolios (Conservative, Moderately Conservative, Moderate, Moderately Aggressive, Aggressive) with varying risk and return profiles. A common historical average for a diversified portfolio might be 5-8%, but this is an estimate and actual returns can vary significantly.
Investment Period (Years): The length of time you plan to keep your money invested. The longer your investment horizon, the more time compounding has to work its magic.
Acorns Monthly Fee ($): Acorns charges a monthly subscription fee (e.g., $1, $3, or $5 depending on the tier). This fee can impact your net returns, especially on smaller balances. This calculator subtracts the total fees over the investment period from your final balance.
Annual Inflation Rate (%): Inflation erodes the purchasing power of money over time. By including an inflation rate, the calculator provides an "inflation-adjusted" future value, showing what your money might be worth in today's purchasing power.
The Power of Compounding and Regular Contributions
The magic behind long-term investment growth, especially with platforms like Acorns, is compounding. Compounding means earning returns not only on your initial investment and new contributions but also on the returns you've already earned. Coupled with consistent monthly contributions, even small amounts can grow substantially over decades.
For example, investing $50 per month for 20 years at an average 7% annual return could lead to a significant sum, far exceeding your total contributions. The earlier you start and the more consistently you contribute, the greater the potential for growth.
Important Considerations
Market Volatility: Investment returns are not guaranteed and can fluctuate. The estimated annual return is an average; actual returns will vary year to year.
Fees: While Acorns fees are relatively low, they can have a more significant impact on smaller account balances. Always be aware of the fees you're paying.
Inflation: Always consider inflation when planning for the future. What seems like a large sum today might have less purchasing power in 20 or 30 years.
Tax Implications: Investment gains may be subject to taxes. This calculator does not account for taxes.
Use this calculator as a guide to understand the potential of your Acorns investments, but always remember that past performance is not indicative of future results.
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function calculateAcornsGrowth() {
var initialInvestment = parseFloat(document.getElementById("initialInvestment").value);
var monthlyContribution = parseFloat(document.getElementById("monthlyContribution").value);
var annualReturnRate = parseFloat(document.getElementById("annualReturnRate").value);
var investmentYears = parseFloat(document.getElementById("investmentYears").value);
var acornsMonthlyFee = parseFloat(document.getElementById("acornsMonthlyFee").value);
var inflationRate = parseFloat(document.getElementById("inflationRate").value);
var resultDiv = document.getElementById("result");
resultDiv.innerHTML = ""; // Clear previous results
// Input validation
if (isNaN(initialInvestment) || initialInvestment < 0 ||
isNaN(monthlyContribution) || monthlyContribution < 0 ||
isNaN(annualReturnRate) || annualReturnRate < 0 ||
isNaN(investmentYears) || investmentYears <= 0 ||
isNaN(acornsMonthlyFee) || acornsMonthlyFee < 0 ||
isNaN(inflationRate) || inflationRate < 0) {
resultDiv.innerHTML = "Please enter valid positive numbers for all fields.";
return;
}
var totalMonths = investmentYears * 12;
var monthlyReturnRate = (annualReturnRate / 100) / 12;
var annualInflationRateDecimal = inflationRate / 100;
var futureValue = initialInvestment;
var totalContributions = initialInvestment;
// Loop through each month
for (var i = 0; i < totalMonths; i++) {
// Add monthly contribution
futureValue += monthlyContribution;
totalContributions += monthlyContribution;
// Apply monthly return
futureValue *= (1 + monthlyReturnRate);
}
// Calculate total fees over the period
var totalFeesPaid = acornsMonthlyFee * totalMonths;
// Subtract total fees from the final value
var futureValueNominal = futureValue – totalFeesPaid;
// Ensure futureValueNominal doesn't go below zero due to excessive fees on small balances
if (futureValueNominal < 0) {
futureValueNominal = 0;
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var totalEarnings = futureValueNominal – totalContributions;
if (totalEarnings < 0) { // If fees and negative returns lead to a loss
totalEarnings = 0; // Display 0 earnings, as it's a loss
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// Calculate inflation-adjusted future value
var futureValueReal = futureValueNominal / Math.pow((1 + annualInflationRateDecimal), investmentYears);
resultDiv.innerHTML =
"
Your Acorns Investment Projection:
" +
"Total Contributions Made: $" + totalContributions.toFixed(2) + "" +
"Total Acorns Fees Paid: $" + totalFeesPaid.toFixed(2) + "" +
"Estimated Total Earnings: $" + totalEarnings.toFixed(2) + "" +
"Estimated Future Value (Nominal): $" + futureValueNominal.toFixed(2) + "" +
"Estimated Future Value (Inflation-Adjusted): $" + futureValueReal.toFixed(2) + "" +
"This calculation is an estimate and does not guarantee actual investment returns.";
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