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  • FIRST POST
    • BettyBoof
    • By BettyBoof 9th Feb 17, 5:34 PM
    • 234Posts
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    BettyBoof
    Micro Investing
    • #1
    • 9th Feb 17, 5:34 PM
    Micro Investing 9th Feb 17 at 5:34 PM
    Hi, apologies if this has been asked before but a search didn't throw any threads up.

    Do any of you use M0ney B0x or similar to micro invest? You link the app to your debit card and then every time you spend money it gets rounded up and invested. E.g. a 1.80 coffee will get rounded up to 2 and the 20p will be set aside to be invested.

    I'm only just looking into it and I think it's fairly new so wondered if anyone had any experience of investing this way? It sounds like a fun and easy way to save without needing huge sums to get started but I'm wondering if the small amounts will make it worth it?
Page 1
    • enthusiasticsaver
    • By enthusiasticsaver 9th Feb 17, 6:03 PM
    • 3,421 Posts
    • 5,746 Thanks
    enthusiasticsaver
    • #2
    • 9th Feb 17, 6:03 PM
    • #2
    • 9th Feb 17, 6:03 PM
    I would have thought the costs of investing small amounts would outweigh any gains unless you reach maybe a few hundred pound before investing anything.
    Debt and mortgage free and saving for early retirement
    • jimjames
    • By jimjames 9th Feb 17, 7:17 PM
    • 11,788 Posts
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    jimjames
    • #3
    • 9th Feb 17, 7:17 PM
    • #3
    • 9th Feb 17, 7:17 PM
    Far cheaper and easier to setup a DD for 25 per month or whatever. But if you're looking at investing small amounts because that's all you have then surely you want to sort an emergency fund first.
    I said before that 25 was worth starting with but 20p really isn't worth the bother in my view.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • Radiantsoul
    • By Radiantsoul 9th Feb 17, 8:10 PM
    • 1,977 Posts
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    Radiantsoul
    • #4
    • 9th Feb 17, 8:10 PM
    • #4
    • 9th Feb 17, 8:10 PM
    They have a monthly fee of 1 per month and a platform fee of 0.45%. To be fair it seems pretty reasonable, but if you are only investing a few quid a month it is going to be a bit of a killer.
    • AnotherJoe
    • By AnotherJoe 9th Feb 17, 9:45 PM
    • 6,295 Posts
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    AnotherJoe
    • #5
    • 9th Feb 17, 9:45 PM
    • #5
    • 9th Feb 17, 9:45 PM
    These schemes are utterly pointless. Lets say on average you make 20 transactions a month. So on average that would be 10 of "change" saved. Minus the 1 fee of course.

    So, why not just save 10 a month instead and cut out the pointless middleman and the 1 fee? You'd be up more than 10% to start with.
    • Biggles
    • By Biggles 10th Feb 17, 8:54 AM
    • 7,276 Posts
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    Biggles
    • #6
    • 10th Feb 17, 8:54 AM
    • #6
    • 10th Feb 17, 8:54 AM
    It certainly isn't new, as several banks have offered this, free of charge, for some years. And the fee quoted above sounds extortionate compared to the small sums that you would be saving.

    Consider the other options and do it yourself.
    • Malthusian
    • By Malthusian 10th Feb 17, 10:32 AM
    • 2,001 Posts
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    Malthusian
    • #7
    • 10th Feb 17, 10:32 AM
    • #7
    • 10th Feb 17, 10:32 AM
    They have a monthly fee of 1 per month and a platform fee of 0.45%.
    Originally posted by Radiantsoul
    Blimey. If an IFA charged an initial fee of 10% all hell would break loose on these boards.

    But they aren't providing advice so it's all OK.

    The thing about investing is that if you put pennies in you get pennies out.
    • BettyBoof
    • By BettyBoof 12th Feb 17, 5:55 PM
    • 234 Posts
    • 1,480 Thanks
    BettyBoof
    • #8
    • 12th Feb 17, 5:55 PM
    • #8
    • 12th Feb 17, 5:55 PM
    Thanks for the replies. To clarify a couple of points; I do have an emergency fund so that's not an issue. And I meant that the M0ney B0x app was new, not the concept.

    The general consensus seems to be that it's just not worth it, given the fees and small sums - which is the question I wondered about so thanks all for confirming!
    • enthusiasticsaver
    • By enthusiasticsaver 12th Feb 17, 6:07 PM
    • 3,421 Posts
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    enthusiasticsaver
    • #9
    • 12th Feb 17, 6:07 PM
    • #9
    • 12th Feb 17, 6:07 PM
    You would do better to do as jimjames suggests and invest 25 per month if you only have a small amount of disposable income but if your finances are that tight I would hold off altogether as you may need it unless your emergency fund is reasonable. You need to be looking at this as long term, unlikely to be touched money. Do you have a pension?
    Debt and mortgage free and saving for early retirement
    • BettyBoof
    • By BettyBoof 13th Feb 17, 2:45 PM
    • 234 Posts
    • 1,480 Thanks
    BettyBoof
    My finances are not 'that tight' and I do have a pension. I was asking about M0ney B0x as I had just come across it and it seemed like a fun way for a complete beginner to start investing without needing a 10k lump sum, not because I am in dire financial straits!

    I think I'll drop out of this discussion now, thanks for the replies.
    • lessavyfav
    • By lessavyfav 13th Feb 17, 8:24 PM
    • 169 Posts
    • 200 Thanks
    lessavyfav
    I have Moneybox! I just got the app a few weeks ago. I think it's a fun/easy way to put money aside without thinking about it or doing much, and you can top up extra when you like so that 1 fee doesn't feel like such a big percentage (also I'm pretty sure the first three months are free).

    I've been saying for at least a couple of years I'll open a stocks and shares ISA and not done anything - my spare change slips through my fingers at the end of the month, so it works for me!
    Emergency fund in regular saver account 1100/1000 (110% there)
    0% Balance Transfer (May 2018) 959.94/2524.94 (38% there)
    Joint house deposit over 100% there
    • lessavyfav
    • By lessavyfav 13th Feb 17, 8:27 PM
    • 169 Posts
    • 200 Thanks
    lessavyfav
    (Mind you, I think eventually I'll open that s&s ISA)
    Emergency fund in regular saver account 1100/1000 (110% there)
    0% Balance Transfer (May 2018) 959.94/2524.94 (38% there)
    Joint house deposit over 100% there
    • jimjames
    • By jimjames 13th Feb 17, 10:02 PM
    • 11,788 Posts
    • 10,145 Thanks
    jimjames
    I have Moneybox! I just got the app a few weeks ago. I think it's a fun/easy way to put money aside without thinking about it or doing much, and you can top up extra when you like so that 1 fee doesn't feel like such a big percentage (also I'm pretty sure the first three months are free).
    Originally posted by lessavyfav
    If you're looking at larger amounts then go for a standard S&S ISA. The whole concept seems a pointless gimmick to me. If you want an easy way to put money aside then using a savings account and wait till you can put 25 plus into a S&S ISA.
    Last edited by jimjames; 13-02-2017 at 10:46 PM.
    Remember the saying: if it looks too good to be true it almost certainly is.
    • AnotherJoe
    • By AnotherJoe 13th Feb 17, 10:32 PM
    • 6,295 Posts
    • 6,667 Thanks
    AnotherJoe
    I have Moneybox! I just got the app a few weeks ago. I think it's a fun/easy way to put money aside without thinking about it or doing much, and you can top up extra when you like so that 1 fee doesn't feel like such a big percentage (also I'm pretty sure the first three months are free).

    I've been saying for at least a couple of years I'll open a stocks and shares ISA and not done anything - my spare change slips through my fingers at the end of the month, so it works for me!
    Originally posted by lessavyfav
    But its not spare change, its entries in a bank account and you could get the exact same effect with no losses by just setting up a standing order to pay into an S&S ISA.

    Its easy but whats fun about it when the money is automatically taken?
    • Anthorn
    • By Anthorn 18th Mar 17, 4:33 AM
    • 3,010 Posts
    • 775 Thanks
    Anthorn
    But its not spare change, its entries in a bank account and you could get the exact same effect with no losses by just setting up a standing order to pay into an S&S ISA.

    Its easy but whats fun about it when the money is automatically taken?
    Originally posted by AnotherJoe
    In Moneybox, it's only automatically taken if the user decides that. One can just invest from 2 a week by direct debit without investing any "spare change" at all.

    The almost ubiquitous promotional phrase used in Micro-investing is, "Look after the pennies and the pounds will look after themselves" and that very aptly describes it.

    Moneybox is actually an established platform almost identical to the very popular "Acorns" in the U.S. Basically aimed at "Millennials" (those who reached adulthood in the year 2000) but can be used by anyone who is cash poor with money tied up elsewhere.

    I have Moneybox in it's stocks and shares variant and find it very useful and very easy to use. It's also a lot cheaper than paying dealing fees and commissions on a regular stocks and shares ISA. In Moneybox there is also the General Investment variant for those who already have a S&S ISA or who don't want one.
    Last edited by Anthorn; 18-03-2017 at 4:42 AM. Reason: Last sentence added.
    • JohnRo
    • By JohnRo 18th Mar 17, 12:14 PM
    • 2,306 Posts
    • 2,046 Thanks
    JohnRo
    The almost ubiquitous promotional phrase used in Micro-investing is, "Look after the pennies and the pounds will look after themselves" and that very aptly describes it.
    Originally posted by Anthorn
    That's fine except that using moneybox isn't doing that, it's wasting pounds on pennies, costing a lot more in fees than would otherwise be the case.

    If you're prudent and understand the slogan quoted and the need to save wisely then you wouldn't be using 'micro investing' for the very reason you've sited as it's main advantage.

    I have Moneybox in it's stocks and shares variant and find it very useful and very easy to use. It's also a lot cheaper than paying dealing fees and commissions on a regular stocks and shares ISA. In Moneybox there is also the General Investment variant for those who already have a S&S ISA or who don't want one.
    As stated up thread, it's a gimmick.

    12 a year plus another 0.45% p.a. on whatever you've managed to squirrel away is very expensive.

    The alternative is to save in an interest bearing account, perhaps at 3% interest, then transfer into an ISA at a percentage broker for a total cost of typically 0.25% p.a.

    I'd also question the size of their various Blackrock Property Securities Equity Tracker allocations. 35% seems more than just adventurous.
    Last edited by JohnRo; 18-03-2017 at 12:17 PM.
    'We can't solve problems by using the same kind of thinking we used when we created them.' ― Albert Einstein
    'Facts do not cease to exist because they are ignored.' ― Aldous Huxley
    • Plus
    • By Plus 18th Mar 17, 1:13 PM
    • 207 Posts
    • 158 Thanks
    Plus
    I don't like the psychology. It's designed to make you think 'oh, I'll buy that coffee, it's doing me good' - when in fact the best good is done by not buying the coffee and saving the money you would have spent (as argued by eg the MSE Demotivator).

    That said, if you ignore the 'round-ups' gimmick, an app that allows you to make micro-contributions into a S&S ISA isn't a bad thing - and allows you to incentivise yourself. For instance, every time you walk home, tap the app and invest the 10 you would have spent on a taxi.

    So I think it has value as a 'gateway drug' into more serious investing. As their customers aren't going to have multi-million portfolios, it's not hugely surprising it's more expensive. The actual percentage costs aren't too bad (0.45% of 1000 is 4.50pa), it's the 12 fee that's going to drag on returns (and potentially turn off users)

    The asset allocations are just strange though. They have no bonds at all?
    • JohnRo
    • By JohnRo 18th Mar 17, 1:23 PM
    • 2,306 Posts
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    JohnRo
    It is not aimed at prudent savers then but at fe.ckless spenders. Designed primarliy to take advantage and profit from their fe.ckless spending in the guise of an investment platform.
    'We can't solve problems by using the same kind of thinking we used when we created them.' ― Albert Einstein
    'Facts do not cease to exist because they are ignored.' ― Aldous Huxley
    • Anthorn
    • By Anthorn 18th Mar 17, 1:28 PM
    • 3,010 Posts
    • 775 Thanks
    Anthorn
    That's fine except that using moneybox isn't doing that, it's wasting pounds on pennies, costing a lot more in fees than would otherwise be the case.
    Originally posted by JohnRo
    LOL we've already had this in the Moneybox thread in which I posted. The fees are a flat fee of 1 per month plus 0.45% platform fee per year. If I were to do the same as suggested in this thread and save into a S&S ISA I would be subject to dealing fees of around 5.95p plus a platform fee, depending on the ISA provider, possibly every month in the case of regular savings into an ISA. That will reduce a regular 20 per month considerably more than the moneybox app at a flat 1 per month.

    The rest of your post repeats what you've already said to which I've already replied above. You obviously don't understand what it is you are attempting to discuss. For example you say that 12 a year is very expensive on whatever is squirelled away with knowing or even considering how much is squirrelled away. Personally, I squirrel away at least 80 per month almost entirely from rounding up purchases to the next full pound.

    However there is an alternative which doesn't charge a fee for a balance under 10k. That's moneyfarm and that too is micro-investing:
    https://www.moneyfarm.com/uk/
    Last edited by Anthorn; 18-03-2017 at 1:31 PM.
    • TrustyOven
    • By TrustyOven 18th Mar 17, 1:52 PM
    • 516 Posts
    • 596 Thanks
    TrustyOven
    LOL we've already had this in the Moneybox thread in which I posted. The fees are a flat fee of 1 per month plus 0.45% platform fee per year. If I were to do the same as suggested in this thread and save into a S&S ISA I would be subject to dealing fees of around 5.95p plus a platform fee, depending on the ISA provider [...]
    Originally posted by Anthorn
    Wowzer!
    There are cheaper platforms, you know.
    Why would you go for a platform that charges a flat fee for each deal unless you had more in your portfolio than the threshold for going to the fixed fee platforms? And if that was the case, why would you even bother with the micro-investing gimmick?
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