Monneybox anyone?

justme111

Not only. I think because investing change rounding numbers of expense does not make much sense as the amounts are bound to be too low to be meaningful . Because it has potential to entice one to spend even rather than save.

masonic

Steve_GP220 wrote: »

Oh, listen you're taking things far too seriously. That was an off the cuff flippant remark - no one, I repeat NO-ONE is enticing or attempting to entice me to invest in MB the company. You should know, its not my shoes that squeak when I walk!

I know that. But there are parallels with this thread.

Steve_GP220 wrote: »

Of course, there are crooks out there, we know that. We are all adults. Life is a risk! What should we all do, crawl under a rock until better days come along?

We don't need to crawl under a rock until better days come along, we just need to practise a little scepticism and consider more than just a single option.

And of course again - MB have no control over outcome for investors - so why are we so down on MB? Because there current pricing structure is a little on the high side? Come on guys!

The other reasons to be "so down on MB" were summarised in post #3 of this thread:

Other than being expensive, it...
- gives you the impression you are saving when you are actually saving token amounts,
- absolves you of any responsibility for managing your financial affairs,
- determines your savings by random events,
- does it completely the wrong way round,
- will likely be counterproductive

I should also add to this, the asset allocation is poor and it conflates saving and investing.

So I make that 8 reasons in total, but who's counting

AnotherJoe

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 going 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.

You are now in a place where you have intermingled your success as an investor with their success as a company. The only place the two are linked is, the higher the charges, the more likely they are to "smash it" and the less likely you are to "smash it"

To be fair their charges are not extortionate but in the long term they are taking money from you that you dont need to pay for an pathetically limited choice of funds. I was shocked to see it is just 3 funds and the main one you can simply invest in direct with Vanguard and save yourself 0.3% a year which doesn't sound like a lot but when you are paying it for literally zero benefit, its one heck of a lot.

Its as if someone said to you "give me £10 every month" and you said "why" and they said "because you can look at it several times a day "

I can see the appeal of a smart app if you had lots of funds you are juggling and want to compare them or look at graphs comparing the different performances or whatever. When it comes down to effectively just the one "fund" eg cautious medium risky or whatever it is, theres no point, you'll be bored after 5 minutes. Heck I'm bored after ten and I've probably got 30 or 40 different investments across my accounts.

masonic

AnotherJoe wrote: »

I was shocked to see it is just 3 funds and the main one you can simply invest in direct with Vanguard and save yourself 0.3% a year which doesn't sound like a lot but when you are paying it for literally zero benefit, its one heck of a lot.

...and one of those three funds is a cash fund, which can almost certainly be beaten by a consumer savings account. I cannot conceive of a justification for investing money in such an account outside of a pension where no alternatives exist.

EachPenny

Steve_GP220 wrote: »

Considering investments made, large or small or in between, the charges for any of these funds and plans are pretty small - and besides I like to think of myself as an 'early adopter'. I could yet have the last laugh! Imagine! And I do appologise if you guys haven't totally brought me round to your way of thinking. Although I do add hastily that I have learnt something here these last few days.

But the principal thing you are doing is investing some of your money in 'stuff' that you hope will return you more money, but at a risk of loss of some of your money if it doesn't work out. In that you are following something that people have been doing for centuries, and thus not an "early adopter".

The secondary thing you are doing is paying someone to look after your investment decisions for you. Again, this is something that people have been doing for centuries, and thus not an "early adopter".

A consequence of the decision you've made to pick a particular provider is you are paying more than you need to to have your investments looked after. You've probably guessed it.... this is something that people have been doing for centuries, and thus not an "early adopter".

The one feature which is relatively novel - the scraping of the pennies - you're not really interested in. So the one "early adopter" thing you could do you aren't so keen on.

No need to apologise.

Alexland

Steve_GP220 wrote: »

the charges for any of these funds and plans are pretty small

The problem is that investment returns for the next 5 to 10 years are also likely to be pretty small especially if the asset allocation is poor. As such even small differences in charges can damage a high percentage of your return.

Alex.

cloud_dog

Steve_GP220 wrote: »

Moneybox told me today, they've invested a lot of money, and its early days. So for that reason its understandable why the fees are high to some. I think it will change -

Yes, they will go higher.

You do understand why it is soooo costly to get a new starter up and running, why they all tend to try to buy market share by, I don't know... gimmicks, or lower prices?

Steve_GP220 wrote: »

...and MB have just secured £Ms in extra funding very recently. If they float, I'm going to buy in

Someone asked you before if you were associated with MB, and your gung-ho positive approach to MB (bearing in mind that you've already said that you're not that interested in one of their main USPs), and your eagerness to dismiss any points raised by posters is really starting to give off a slightly bad smell.

If you just want to say "I'm happy to pay some additional money so I can have a funky app on my phone to look at my investments", then just say so and we'll all stop trying to dissuade you.

Malthusian

Zola. wrote: »

The only people who will benefit from this are the app creators who will scoop monthly quids off of those who (for whatever reason) think this is a worthwhile app..

The client list is also going to be worth a fair few bob to the right buyer.

These unworthy thoughts wouldn't previously have entered my head, but after Chip's business plan of "1. Compile list of financially naive people with few assets 2. Tap them up for venture capital investment", who knows.

Steve_GP220

Steve_GP220 said:

As subject line - has anyone here tried Moneybox? I'm tempted - its basic but I love the round up of credit cards etc and you still get the three levels of risk to choose from - and all accessible from the nifty app on your phone. What's not to like?

Update to this thread.....

Heading for 2 yrs into Moneybox S&S ISA.

I like the app, its in the main, easy to use. There are some horror stories over various forums regarding withdrawing, transferring, and closing down accounts but I have done none of this so cant comment. I have stopped using the round-up facility simply because the hassle of updating banking details every 12 weeks, something that through the app is not straightforward by any means, is just a waste of minutes I'll never get back, and for a just few quid.

My problem, if it is a problem, is (and this probably is Covid related). My current earnings performance is -1.38% and my fees over 20 mths or so is £61.00. So I am definitely in the negative and with almost £10k in there and built up over nearly 2yrs, that doesn't feel right to me. I would expect 'something' in returns by now even if I have planned this to be a 10 year journey. There have been times when the EP has been 6, 7, 8% but in March obviously that changed. I kind of understand that. Global markets were hammered and will take time to recover. And now, if reports are to be believed, we are heading for a second wave of the dreaded virus. Who knows how that will pan out?

To add to my agitation MB changed their plans to the Cautious, Balanced and Adventurous, a whole different set of funds, which by all accounts is doing  better. Search of forum comments do have quite a few posts that say their 'S&S ISAa are doing well and they are very pleased'. So why am I not completely pleased and over the moon?

So Now, I'm in a dilemma. I don't think my dilemma is anything covered by this thread when I started it back in 2018. I think on reflection MB is a company operating on outdated banking practices which in this day and age is pretty close to unforgivable - but I don't distrust them. But do I take the cash out and put it somewhere else, do I change to the new set of risks within the app?  I know I know, I can hear MB customer service saying "I'm sorry we do not give financial advice." But something is niggling at me and I can't pin it down. It could be a general investment thing as opposed to MB so don't want to be unfair to them. Still.... I am pondering.

bowlhead99

Thanks for coming back with comments as it's always good when people revisit their own threads to let us know the outcome. 

The returns (ignoring the fees, which we told you would have been quite a lot less by going elsewhere, but are only about half a percent of the total amount of money you now have in there) are not too surprising. 

Investing is a long term game, and you are only two years into it. What you have been doing is increasing your investments as you went along - which is something that all of us who are saving from monthly salaries etc will do - but it means that most of your money has not been invested for two years.  The first £1000, yes, that's been invested for nearly two years, but the last £9000 hasn't, because you only fed it in bit by bit. You told us that you built it up over the two years, so you didn't put it in at the beginning. There will be thousands of pounds that you put in during the second half of 2019 when markets were pretty flat, or early 2020 when prices for shares went a bit higher, which did not get any real time to grow and then went through a big crash down in values this March. Much of that has recovered since, back towards where it was in Feb, but if you look back a year from now there hasn't been much growth on a typical mixed asset fund. 

So if you split your money into chunks, and some of the money at the start has grown a bit (but that was only a small amount of money), and the money put in the middle is pretty flat because it went up but then down again, and the money put in six months ago went in when shares were at high prices and didn't go up at all, going down instead... then overall you could be at a loss overall, or at least from where you were a year ago.   

That's not necessarily a fault of Moneybox, just a consequence of phasing your investment so that the amount of money that had been put in the account to be invested by Moneybox for you was the highest during the most recent year (when markets were doing badly), and the lowest in the previous year (since when markets have done OK, but most of the money wasn't with Moneybox then, it was in your own bank account or potentially in your employer's bank account because you hadn't even earned the money two years ago let alone invested it with Moneybox).

Example: - if I have £1000 that grows by 5% a year for two years I would make over £100 on it, but if I have another £9000 that falls by 1.5% over a year I will lose more than I had gained on the initial investment. When you keep going with the £10,000 ish from todays values for another decade, you will have given it enough time for all the money to get a mix of the up years, down years, and nothing years, so overall you would expect to make money, but you can't really say after a short time period that it's not what you would expect - you know that you had a lot of invested during a bad time for markets, and a relatively small amount invested during a better time for market, so you wouldn't expect a spectacular overall return.

For example, just to make the point more obvious, you mention the fees so far have been £61. We know it is £1 a month flat fee and you've been going about 20 months, so that means about £41 has come from the percentage-based fees of 0.45% a year on your asset value.  So we could work backwards and try to figure out how long each pound of your cash has really been invested, on average...

We could say that to pay £41 on what is now £10,000 at 0.45% a year, then although the headline amount invested is £10,000 it must have only been 'at work' for less than a year - something like 11 months (because £10,000 x 11/12 x 0.45% would produce £41 of charge). Investing £10k for 11 months over a period when markets went up for a bit and then had a massive crash and are now not really any higher than they were before, is not going to give you great gains. While you think you ought to have had some gains by now, unfortunately you have not, and we can understand why. Bad luck with the timing of when you were investing.  By the time the money has been invested for 11 years, rather than 11 months, it will hopefully have more growth.

That doesn't mean the rest of the years it needs to stay where it is though - you could relatively easily move it elsewhere.

Steve_GP220 said:

So Now, I'm in a dilemma. I don't think my dilemma is anything covered by this thread when I started it back in 2018. I think on reflection MB is a company operating on outdated banking practices which in this day and age is pretty close to unforgivable - but I don't distrust them. But do I take the cash out and put it somewhere else, do I change to the new set of risks within the app?  I know I know, I can hear MB customer service saying "I'm sorry we do not give financial advice." But something is niggling at me and I can't pin it down. It could be a general investment thing as opposed to MB so don't want to be unfair to them. Still.... I am pondering.

As was mentioned earlier, it is not a particularly cheap platform and doesn't offer a wide selection of investments. That suits some people who don't want to have to make a lot of choices on their investments, but it is still better to use cheaper options if you can (this is a money saving expert site, after all). Your platform fees were costing £1 a month and 0.45% a year. Vanguard's investment platform costs £0 a month and 0.15% a year, so instead of costing £62 it would have been under £15 to use the platform, and although they don't use the 'round up gimmick' you now know you are not really bothered about that gimmick anyway, you just want to focus on investing real money. 

Changing the fees to <£15 instead of £62 is not the sort of thing that would have made your investment a success or not, though it can help. Ultimately whether you move elsewhere or stay, the success comes from whether you are choosing to invest more conservatively or more adventurously and whether the markets are going up (when adventurous = good) or down (when cautious = good) and you will of course get up and down periods over the decade so you just need to keep plugging your money in at a risk level you're comfortable with, and cross your fingers, and check back in a decade (which is why you don't really need somewhere with an app to monitor daily).