Moneybox

iarniee

Anyone had any experience with this app?

Looking to pump in around £150 a month into it to see what's going on, looks okay from some reviews I've read online.

What growth rate would I be looking at with their aggressive plan?

masonic

For £150/mo there are cheaper options with more choice. In terms of fees, after the introductory period, you are looking at £12 + 0.45% per year, whereas the cheapest funds platform (Cavendish Online) is £0 + 0.25% per year. Over 10 years of investing £150/mo, the potential savings are about £400.

For their adventurous option (or the equivalent elsewhere), you'd be looking at historic average returns of about 5% + inflation, but your actual return could vary significantly from this.

For reference the above option is invested in 80% Fidelity Index World, 15% iShares Global Property Securities Equity Index Fund and 5% iShares Overseas Corporate Bond Index Fund. The same or equivalent funds are available almost anywhere.

iarniee

masonic wrote: »

For £150/mo there are cheaper options with more choice. In terms of fees, after the introductory period, you are looking at £12 + 0.45% per year, whereas the cheapest funds platform (Cavendish Online) is £0 + 0.25% per year. Over 10 years of investing £150/mo, the potential savings are about £400.

For their adventurous option (or the equivalent elsewhere), you'd be looking at historic average returns of about 5% + inflation, but your actual return could vary significantly from this.

For reference the above option is invested in 80% Fidelity Index World, 15% iShares Global Property Securities Equity Index Fund and 5% iShares Overseas Corporate Bond Index Fund. The same or equivalent funds are available almost anywhere.

So in terms of moneybox what would be an investment per month that would be worthwhile?

JohnRo

Why would you choose to invest seriously with this toy, over a simple and well established investment platform?

What's the big attraction with gimmicky stuff like this, if you're serious about investing, it is an expensive way to do something very simple.

You will be charged £1 a month every month (after the first 3 months) so that's 0.67% of your monthly £150 input every month.

Then there is the 0.45% annual charge, billed monthly.

In year one (assuming no growth and ignoring the fee free period) you'd pay something like £4.38 from the 0.45% annual charge. Add that to the £12 from the £1 monthly subs and you'll pay £16.38 in year one.

£16.38 is 0.91% of your annual £1800 input

or to put it another way, nearly 4 times more expensive than the likes of AJBell charging a flat 0.25% annually (billed quarterly I believe)

Can you see how over several years those charges are going to hurt?

Bear in mind it isn't offering anything special, like an investment formula to riches that no one else has access to and which more than offsets their charges.

It uses simple index tracking funds available on most established platforms.

The only thing moneybox offers that's somewhat unique is the round up (to the next pound) service which taps in to your bank card spending habits and hoovers up the small change from rounded whole pound transactions and adds it to your moneybox account.

eskbanker

iarniee wrote: »

So in terms of moneybox what would be an investment per month that would be worthwhile?

£0 would fit the bill nicely, invest elsewhere instead....

iarniee

JohnRo wrote: »

Why would you choose to invest seriously with this toy, over a simple and well established investment platform?

What's the big attraction with gimmicky stuff like this, if you're serious about investing, it is an expensive way to do something very simple.

You will be charged £1 a month every month (after the first 3 months) so that's 0.67% of your monthly £150 input every month.

Then there is the 0.45% annual charge, billed monthly.

In year one (assuming no growth and ignoring the fee free period) you'd pay something like £4.38 from the 0.45% annual charge. Add that to the £12 from the £1 monthly subs and you'll pay £16.38 in year one.

£16.38 is 0.91% of your annual £1800 input

or to put it another way, over 4 times more expensive than the likes of AJBell charging a flat 0.20% annually (billed quarterly I believe)

Can you see how over several years those charges are going to hurt?

Bear in mind it isn't offering anything special, like an investment formula to riches that no one else has access to and which more than offsets their charges.

It uses simple index tracking funds available on most established platforms.

The only thing moneybox offers that's somewhat unique is the round up (to the next pound) service which taps in to your bank card spending habits and hoovers up the small change from rounded whole pound transactions and adds it to your moneybox account.

Hi John, I'm young and don't really have any idea of much of what you said.

I'm just looking to save some money and invest it somewhere that's all.

Thanks

iarniee

eskbanker wrote: »

£0 would fit the bill nicely, invest elsewhere instead....

Like where?

JohnRo

iarniee wrote: »

Hi John, I'm young and don't really have any idea of much of what you said.

I'm just looking to save some money and invest it somewhere that's all.

Thanks

If you're looking to save a regular amount monthly the you really would do better opening a bank account and regular saver at somewhere like HSBC or first direct (or both)

That's a safe way to earn 5%pa on your £150 contributions.

iarniee

JohnRo wrote: »

If you're looking to save a regular amount monthly the you really would do better opening a bank account and regular saver at somewhere like HSBC or first direct (or both)

That's a safe way to earn 5%pa on your £150 contributions.

Okay, thank you.

Guess I was dragged in by the round up feature, very useful for me.

JohnRo

iarniee wrote: »

Okay, thank you.

Guess I was dragged in by the round up feature, very useful for me.

It's a gimmick and as you can see it's an expensive one in terms of investment charges.

The thing is if you don't use moneybox it isn't rounding up your transactions for you and snaffling the pennies into it's expensive investment app. That simply means you don't 'spend' them and they're either still sat in your bank acount or not increasing your CC balance...

If it's apps you're into, all the major highstreet banks have them.

AnotherJoe

iarniee wrote: »

Okay, thank you.

Guess I was dragged in by the round up feature, very useful for me.

You might think so. I think its toxic. What its actually doing is fooling you that you are saving when in fact you are spending.

Instead of randomly saving 75p when you buy a coffee for £3.25 save £3.25 or even £4 by not buying the coffee and saving.

In any case it puts the cart before the horse, it trains you to spend first and save second when you shoudl decide what you want to save, save that, and spend whats left if you must. As it is you'd be in the frame of mind to go buy a bunch of things because you'll be "saving".