I recently just discovered yet another new financial platform that caught my attention. Perhaps I am spreading myself to thin and over diversifying myself but I am a firm believer in taking advantage of the sources I have access to. I get really bothered when I feel like I am possibly missing out on a situation to make a few cents or save a few cents. In this instance I am saving between $6.99-$9.99 in commission fees through a platform called Loyal3. Loyal3 has apparently been around for at least two solid years since 2013 but this is the first I am finding out about them. As usual like most of the major players in today’s world they are based out of San Francisco. Which is what surprised me because I live in San Francisco and have never heard anything about these guys.
Loyal3 developed a platform free of commission fees for people new to investing, in what is known as batch investing. You don’t sign up with Loyal3 to do margin trading because it simply won’t work. I see Loyal3 as a solid platform for people interested in being able to buy into some of their favorite blue chip companies. I recently just deposited $20 into the App to see what would happen and decided I wanted to buy $10 in Apple and $10 in Disney, two Blue Chips. But I now own .0787 shares in Apple and .0925 shares in Disney. You are able to buy fractional shares in the companies and orders process as soon as a lump sum of money is placed for an order with other peoples funds. Again these are companies I wouldn’t even sell if I was rich I would hold onto these guys for at least 20-30 years. I see Loyal3 as something young and old investors could buy into. They seem to put a lot of stress on IPOs but until I get to experience an IPO with these guys I have no comment. I pay close attention to companies going public so if they are as good as they say they are I should be a happy investor. My journey in LOYAL3 has just begun though and I will continue to track my progress and thoughts on the platform in my blog.
A more recent company to launch a similar platform but still different platform to LOYAL3 is Robinhood. Robinhood is another commission free platform designed for younger millennials and new investors trying to get into the market. I signed up for Robinhood on the pre sign up list a long time ago and was granted access upon its official release awhile ago. I linked my bank account to the app quickly and transfered a $1 into the platform just to see what would happen and to have my account verified and linked. I have not actually used Robinhood yet but know I will in the future so I keep the app readily available for me to use. The problem I have with Robinhood is the user interface could be a bit cleaner and when comparing it LOYAL3 I think it fails in the aspect that Blue Chip stocks are still unattainable for younger millennials who don’t have more than $2500-$5000 to even look at if they are lucky. I would be curious to see where most of the users on Robinhoods platform live because I am assuming most of them live in the major tech cities like San Francisco, Seattle, Los Angeles, and New York. While many of Loyal3’s users can be found in many suburbs and smaller cities. But Robinhood excels where Loyal3 fails in the fact that you have access to any single stock on the market. So buying smaller companies floating between $2-$50 is something millennials can happily buy into free of commissions.
Both companies are helping disrupt the way we invest and on a side note I thought it was funny finding out that Charles Schwabs min. investment for the new Intelligent Portfolios was $5000.
I placed my first deposit into Lending Club on December 31st for $100 so I was able to start the 2015 new year off fresh on an entire year for Lending Club. I am still exploring Lending Club but pretty comfortable with the platform and happy with the returns I am receiving. I have been in Lending Club for almost 4.5 months now and have put a small sampling of $250 into it so far. Just last month I decided it would be ok for me to start allocating a monthly $25 deposit into the platform on the 1st of every month. While $25 may not seem like a lot it buys me one investment note which is perfectly fine with me currently. My objective with Lending Club is to keep on growing my portfolio on a monthly basis know matter what, even if I somehow forget to deposit some sort of funds into my account I will automatically have $25 placed into the account so I can create growth. While my sampling is still extremely tiny on Lending Club I quickly realized that Investing into A and B loans was a waste of time for me and that I need to just focus on the mid tier loans which are C, D, and E loans. I have yet to invest into an F or G loan and doubt I ever will because I never look at them due to the fact that they can create trouble for me in the future. But I will say I saw a glorious F loan with what I thought was a 25% interest rate but I was on my iPhone and the loan was only $25 away from being filled. I managed to click on the loan and take a glance at the appliers monthly income which showed up as over $12,000 a month but I clicked refresh by mistake and lost the loans info. I am currently recording a 12.72% return which is pretty solid, but determined that I can raise that up to an annual of 15%. All payments have been received so far and I enjoy nerding out looking at the large selection of Loans I get to analyze. I put most of my focus onto what state the person is from, if the loan has been approved by lending club yet, the job title, gross income, but I pay the most attention to the Credit Utilization. Credit Utilization is the biggest thing I look at when I am looking at the loans. You can find some golden loans even if they have a public record on file. A lot of people on Lending Club exclude people with Public Records on file which is understandable but Im in Lending Club to make money. I will give people with 1 record on file a look but if you have two or more it’s an automatic pass. Again though I put a lot of stress into the fact that my sampling is extremely tiny still and my averages are still really skewed. Truthfully I don’t think I will have a full grasp on the platform until next January when I have been in the platform for 1 full year. I do plan on making a larger deposit in the next couple of months to start kick starting my portfolio. But I am still at least two months away from doing that. An insane feature I wish we as investors had access to seeing would be being able to see what credit cards these people owned. If I was able to see the types of cards the people seeking loans owned that would solve a lot of risks for investors. I get enjoyment out of selecting my loans manually. I saw a company called Lending Bot created a robo platform for Lending Club and Prosper but I feel like you lose to much value with a platform like that. If you are a millennial joining the program you almost certainly have a smart phone and will be able to select your loans on your phone. I hope to participate in the SOFI IPO when they decide to go public and decided to take a pass on the ONDK IPO which went public about 4 months ago.
I am on a mission to find way to earn interest for every single day of month. I looked at the idea of seeing an average of 30 days a month instead of 31 days and then just multiplied the 30 days by $25 which came out to $750 for 1 loan a day at 30 days. I already receive a few payments from multiple loans on the same day, but will still look at receiving two payments on 1 day as if I am receiving them on two separate days. Timing the loans to land on every single day of the month would be near impossible Im assuming. I am on board with Lending Club and hoping for it to be a continued success!
It has been at least 3 months since I last posted into my financial blog on my journey with Acorns and Betterment. Well I can happily say both have been a large success so far and I am extremely optimistic about what else is to come with the two new emerging platforms. Both are showing gains for me and still showing different characteristics.
When I first started my journey on Acorns I jumped into it pretty quickly but obviously when you get into an investment of some sort your first objective is to find a way to reach $100. That was accomplished pretty quickly as I quickly ran my account up to $250 in the first two months. The second objective or milestone in a platform like Acorns is to reach $500. Reaching $500 took me a bit longer but I kept on depositing and have enjoyed seeing my returns keep getting bigger and bigger. And finally my most recent milestone was reaching $1000. I more so forced the action and pumped in $290 in a $90 and $200 deposit to force the action. And now I am pretty satisfied with the fact that I have over $1000 in this great micro investing tool for young millennials trying to carve a path into the highly complex stock market. I am currently posting $1037.57 with a 4.2% return since opening up my account in September. Quite fascinating to me. I have slowed down my roundups and weekly deposits though. My main objective was to get to $1000 and then start figuring out how I want to recalibrate my thought process on Acorns and how I am going to reach my loftier $1500-$2000 milestone goals. I currently deposit $8 a week and do manual round ups which average out to around $9-$11.50 a week including my $8 weekly deposit. Which is still exceptional in my mind. I signed up for early access to the web based platform and it is extremely crisp and eye appealing they really do have a better web based platform than Betterment currently. All in all Acorns has been great fun and entertaining for me. I do consider Acorns to be my for fun account and take greater care of my Betterment account. I just wish Acorns offered an affiliate program of sort. I love showing people this great tool. I will say though only 16% of my funds in Acorns were accumulated from Round Ups, the rest of the funds were from me depositing the cash into the platform in larger sums than the micro investments.
While Acorns has been great fun Betterment has been on the rise for me also. I joined both platforms at nearly the same time and have been juggling both hand in hand. Betterment has been posting a larger return than Acorns and I even joined Betterment a couple days later. On this day today I recently decided that I was going to shift my portfolio from 90% stock 10% bonds to 95% stock 5% bonds. I decided this was an ethical play on my part because I recently just turned 25 and feel like I have enough time in my mid twenties to make a pretty aggressive play. I also have my Acorns set to its most aggressive feature. My reasoning behind this play is simply because countries like India and China are still growing rapidly and I need to be apart of the BRIC markets while Im still young. So by increasing my risk another 5% I am opening up to more emerging markets. My portfolio should be reset to 95% for tomorrows opening. I took a screenshot of my 90% holdings today and will track the difference between the two portfolios. I am hoping that I can hold my portfolio at 95% stocks until I am at least 28 years old but am hoping to be able to carry it until I am 30 and then think about dropping back down to 90% stocks. Currently I have pumped my account on Betterment up to $1530.23 with a monthly deposit of $100 set. I am currently thinking about upping my monthly deposits to either $125 or $150 but still trying to figure out how I need to allocate my funds with Acorns, Lending Club, and future IPOs that I want to be able to buy into. I opened up a Prosper account also but think I am going to pass on Prosper. Like Acorns I opened up my Betterment account in September and am posting a generous 5.5% in returns! This is currently the highest that my account has ever been at so anything above 5.5% from here on out is a new high for me. Q1 was pretty soft for me on my dividends but It was still better than a savings account.
So if you are curious to know which platform I currently prefer it is equally weighted between the two platforms and I recommend either one. I usually recommend Acorns to more people though simply because you can get into the market for a cheaper price as long as you are willing to place between $50-$75 into your Acorns account every month. I do consider Betterment to my more serious platform between the two but am currently in love with Lending Club and getting ready to make a huge splash with them in the next couple of months, but that will be in another article I write. I would like to also thank Betterment for the sweet shirt they gave me!