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!