Monneybox anyone?

ColdIron

Steve_GP220 wrote: »

I never quite get the 'negativity' that's peddled on forums like this.

Never confuse negativity with objectivity

Alexland

Steve_GP220 wrote: »

You'll see from my posts above that my amounts will be regular.

In which case you would be better with a low percentage charge platform with no trade fees until such time your holdings get big enough to move to a fixed price platform. From what little we know of your situation I would suggest looking at Vanguard Investor if you can contribute at least £100 per month or Cavendish are happy with only £50 per month.

Claiming on FSCS protection is an administrative process that takes time and evidence. In reality it is more likely that if MoneyBox failed the administrators would sell the customer base to another asset manager. Still I prefer to go with providers who are stable accepting there are even more unstable asset managers out there.

scaredofdebt wrote: »

But it's a nice little additional pot for longer term "rainy day" saving.

Rainy day emergency money is better held in easy access cash savings. I don't understand what "longer term rainy day saving" means as a rainy day could happen at any point without notice so building this cash pot should be the first prioirty.

Alex

masonic

Steve_GP220 wrote: »

Yeah, I wouldn't bother opening an account just for the "£5 here, £10 there" to be honest. You'll see from my posts above that my amounts will be regular. And sure I'm going to open an account and see how it goes. Not everyone wants to or needs to forensically examine the percentages.

It doesn't take a forensic examination to determine that £12 + 0.45% is always a significantly bigger number than 0.15%. You came here specifically to ask the opinions of others, yet you've taken each response as an opportunity to try and rebuke anyone for expressing a negative view.

And regarding Moneybox being a loss making business - that's MB not the companies that monies are invested with, surely? Even if MB vanishes the funds are protected up to £50k, no?

Yes, there would be compensation of up to £50k (£85k from next April). But given that MB only invests in 3 fairly mainstream funds, it is likely you would be transferred to another provider's platform (as Alex points out above) without the need to sell anything. But don't expect that to be a pleasant experience.

My point was really that they are offering the service "too cheap" as a loss leader while they build market share. They would only need to raise their £1 per month charge to £2 to break even, but it does rather suggest a price hike is in order. I doubt they'll move to profit just from economies of scale, which they no doubt already have.

I'm sure you've succeeded in scaring the c*** out of people who have accounts though. Well done!

Some people care about whether the business managing their investments is profitable, or whether it is rapidly burning through cash and dependent on inward investment for survival. I would expect those people to be scared off and that's not a bad thing. But the accounts are publically available, so some of those people have probably already checked.

I never quite get the 'negativity' that's peddled on forums like this. And I think primarily MB was a start up aimed at young people and getting them into the investing mindset, which can only be a good thing.

There's already been some confusion between saving and investing in this thread. Most young people should be saving, especially those who cannot spare much out of their income after paying their monthly expenses. Many will be saving to buy a home, which would be their priority. So I'm ambivalent about the appropriateness of an app like this for your stated purpose.

Steve_GP220

Thanks for your response - mine is in bold!

masonic wrote: »

most rational people don't respond to the possibility something might be expensive by seeing how the charges stack up, and then in hindsight deciding if they were throwing their money away. They work out what the charges are going to be in advance and then decide if they will get enough value for money to justify those costs. You seem to be intending to perform an experiment where you monitor the charges you incur in order to work out whether they are worth paying, but by that point it's too late to avoid paying them and going with a cheaper option.

At the end of the day if you can only afford to invest £5 here and £10 there, then moneybox might be your only option, but if that's the case then is this really money you can afford to lose?

Another downside of moneybox, which i don't think anyone has mentioned yet, is that it is a loss-making business. It's last filed accounts show a loss of £942,572, meaning they are losing about £10 per year per customer.

masonic wrote: »

it doesn't take a forensic examination to determine that £12 + 0.45% is always a significantly bigger number than 0.15%. You came here specifically to ask the opinions of others, yet you've taken each response as an opportunity to try and rebuke anyone for expressing a negative view.


I'm not rebuking the opinion of others, i'm trying to cut out the negativity to be honest. I am taking on board everything that is said and then thinking that mb has almost 200,000 or whatever subscribers/accounts, so can all these people be wrong?



Yes, there would be compensation of up to £50k (£85k from next april). But given that mb only invests in 3 fairly mainstream funds, it is likely you would be transferred to another provider's platform (as alex points out above) without the need to sell anything. But don't expect that to be a pleasant experience.


So we have to assume that moneybox will go belly up then because this is the opinion of 'others' and we can't rebuke that? And as to the pleasant experience, its admin, what so hard about that?


My point was really that they are offering the service "too cheap" as a loss leader while they build market share. They would only need to raise their £1 per month charge to £2 to break even, but it does rather suggest a price hike is in order. I doubt they'll move to profit just from economies of scale, which they no doubt already have.


The people behind these startups are pretty smart you know, I'm sure they've got it all worked out, as to when to hike prices etc.



Some people care about whether the business managing their investments is profitable, or whether it is rapidly burning through cash and dependent on inward investment for survival. I would expect those people to be scared off and that's not a bad thing. But the accounts are publically available, so some of those people have probably already checked.


Sure, i get it. But moneybox isnt the only micro-investment platform is it? They've come to the market later and probably have to adjust strategies because of that.


There's already been some confusion between saving and investing in this thread. Most young people should be saving, especially those who cannot spare much out of their income after paying their monthly expenses. Many will be saving to buy a home, which would be their priority. So i'm ambivalent about the appropriateness of an app like this for your stated purpose.


yeah, I'm not young. I just want to play with the app and maybe make a bit of money along the way. Its all good.

robber2

got to ask; Out of interest SteveGP who do you work for? Moneybox by any chance?


regards


Rob

Malthusian

As far as I can see so far, the only downside of Moneybox are the charges involved.!

That's a bit like saying that the only downside of McDonalds food is that it tastes like !!! and has little nutritional value. It's an investment account. The point is to make money, and high charges mean it is bad at doing the job it is designed for.

I am something of a hypocrite as I use a platform which is slightly more expensive than most. However, I know what I am getting for the premium - the financial soundness of the platform and a reliable standard of service. Moneybox is even more expensive than the platform I use, has neither of those advantages and the only tangible thing you get in exchange is the rounding feature, which as we have discussed is near useless at best and damaging at worst (because it allows you to think you're saving a meaningful amount when you aren't).

And you say this feature isn't actually important to you so that means you are proposing to pay very high charges for no reason. This is not a good investment strategy. If you are throwing money away in this area you may be in others that the thread hasn't covered.

Steve_GP220 wrote:

I never quite get the 'negativity' that's peddled on forums like this.

If you take the advice on this forum (which is what you asked for, no?) and use a cheaper and better platform, you'll pay lower charges, see better returns and have more money. What do you see as negative about having more money?

This is a forum about finance, not cosmic ordering or the Law of Attraction.

Moneybox users are noticeably defensive about their choice of platform (we have had a few over the years). The reason they are defensive is that Moneybox's USP is its 'save the change' feature, which they want to believe (and Moneybox wants them to believe, because as long as they believe it they can sting them for uncompetitive charges) will save them a significant amount of money without them having to think about it or make any tough decisions.

When we point out that it won't (pennies in, pennies out), the thread then generally veers into nonsensical arguments like how we're all negative Nancies for not wanting to chuck our money at a loss making startup.

Someone who wanted advice on the best choice of platform would not defend a particular platform tooth and nail in this way, but this isn't about finding the best platform, this is about defending the choice of platform you've already made to yourself.

masonic

Steve_GP220 wrote: »

I'm not rebuking the opinion of others, i'm trying to cut out the negativity to be honest. I am taking on board everything that is said and then thinking that mb has almost 200,000 or whatever subscribers/accounts, so can all these people be wrong?

Your figure is out by a factor of 5. But if you believe that a product must be good because because many or most people use it, then what about the millions of people investing using other products, can they all be wrong?

So we have to assume that moneybox will go belly up then because this is the opinion of 'others' and we can't rebuke that? And as to the pleasant experience, its admin, what so hard about that?

No, but it is a risk. I suspect you are quite naive and have never gone through such a process before. Speaking with the experience of having gone through it multiple times, it is not something I'd choose to repeat. But as I said above, and you quoted, but seem to have ignored, my main point is that their already expensive service will have to get even more expensive before their current venture capital funding runs out.

The people behind these startups are pretty smart you know, I'm sure they've got it all worked out, as to when to hike prices etc.

I don't disagree, and they know full well a large proportion of their customer base will be too apathetic to move to a cheaper provider - because that is admin. Many startups with incredibly brilliant people behind them still go on to fail in the long term. I suspect this one will limp along for quite some years to come. If they invest heavily in the app technology, perhaps a bigger player will come along and buy them out.

Sure, i get it. But moneybox isnt the only micro-investment platform is it? They've come to the market later and probably have to adjust strategies because of that.

yeah, I'm not young. I just want to play with the app and maybe make a bit of money along the way. Its all good.

Well, if as you say you just want a shiny app to play with and the excitement of watching some small change get invested and go up and down in value, then you can consider it an indulgent hobby. But grown-up investing it ain't, and it encourages bad investment habits, like focusing on short-term performance.

Steve_GP220

robber2 wrote: »

got to ask; Out of interest SteveGP who do you work for? Moneybox by any chance?


regards


Rob

Ha ha, NO!

Steve_GP220

I think a blanket response here due to the fact that the responses above are so long and detailed;


That 'do I work for Moneybox?' post made me laugh! Although I have referred them to this thread to give them (MB) a chance either to respond to me privately (which they have done) and / or on the open forum here to what you all have said.



I do, and have taken in every response. I always remember that replies are basically a bunch of personal opinions, albeit they are based in some instances in financial fact. I just like to try to see it from all angles if I can, to be fair. And I try not to be blinkered. I guess I can be provocative but that is intentional since my MB account goes active TOMORROW. So if I was going to pull out, it would have to be NOW! In light of the reply I have received from MB, I wont be pulling out any time soon,



I think I'm going to go with it for now - just to see. Who's to say that MB isn't gong to really smash it? These guys don't do these start ups accepting that it will be one big failure and as has been pointed out in their response to me, new businesses, almost always lose in the first years because of the heavy investment required. But MB is also backed by some of the country's largest capital ventures. I understand also, they have very recently secured a significant amount in new funding. That doesn't strike me as a 'loser startup' to be honest.


The other thing that MB prides itself on is that its easy to take the money out via a simple online form - so, ok if in 1 year, 2, 3, 10 years I take it out and put it elsewhere, apart from the obvious, no real damage is done.


I guess everyone thinks their way is the best! If every product was the same, there would be no competition and it would be very boring! I'll keep you guys posted though.

cloud_dog

Steve_GP220 wrote: »

I think I'm going to go with it for now - just to see. Who's to say that MB isn't gong to really smash it?

What does that mean with regards to your investments?

Steve_GP220 wrote: »

The other thing that MB prides itself on is that its easy to take the money out via a simple online form - so, ok if in 1 year, 2, 3, 10 years I take it out and put it elsewhere, apart from the obvious, no real damage is done.

Well, the additional cost of the charges over 1, 2, 3, 10 years will actually be real damage but, hey if they smash it they will be enjoying their financial success off the back of your higher charges.

Yup, what's not to like.... mmmm