Copy new hotness roboadviser interfaces (“delight your users”), provide straightforward index investment advice at the lowest possible expense ratios.

Young investors want to make the best investment decisions with limited financial knowledge. Enable them to do so while stil acting as their fiduciary.

Vanguard’s iOS app is getting there in the above regard, but still has room for improvement.

I do not suggest investing in a REIT in a rising interest rate environment, but if you decided to, I’d invest through a traditional or Roth IRA and balance the remainder of your portfolio through your 401k and taxable accounts (ensure the funds you buy in your taxable account are tax efficient!).

Alternatively, you might try to see if your 401k provider supports in service distributions (exporting funds to your IRAs without you separating from the company). You could then invest in the funds you’d like, not limited to your 401k selection.

But I 100% agree with you. Pretty much every young working person is already extremely over-exposed to the housing market via their rent costs which easily might be 30-50% or more of your after-tax salary and can go up every year. Investing a big part of your savings in your local housing market seems like a smart way to hedge.

REIT's do seem fairly complex and obscure though, and it seems like you usually have to back a single developer or project and put in a fairly large minimum investment. I can easily buy an index fund that tracks S&P performance, why isn't there a simple index fund I can buy that tracks the SF housing market performance? I guess because it's a totally private market?

Not sure I'd buy into REITs when interest rates are set to go up, if you buy into a highly leveraged REIT and their interest payments go up you're going to lose a lot of money.

edit: Open a Vanguard IRA (Roth if you can), max out yearly contributions, buy VOO and VTI and hold until retirement. Add in some bonds as you see fit. Put at least as much as your employer will match into your 401k, more if you can afford it. Take the steady 6-7% return, you'll be hard pressed to beat it on your own. You'll be sitting on millions of dollars when you retire with this strategy.

That's how I felt in 2007 but in 2012 many of those homes were then selling for 30cents on the dollar.

I am not saying that 2018 feels like 2007 (or maybe...), but your are only 27 so there are likely a few 2007s that will occur in your lifetime.

in sf, 2008 saw houses back to 2004 prices, just to skyrocket above the record a year later.

I know it's super difficult to move for lots of reasons, but just in case you're not aware: there are lots of places where you could both get a job and buy a house.

So their entire business model is investing change from transactions into index funds? Why couldn't any major bank or credit card company implement this and blow them completely out of the water?

>Two of the seven ETFs that Acorns includes in its portfolios are run by BlackRock, while the remainder are run by Vanguard.

I guess I don't get who this service is for. People who want to invest but don't want to "invest" any of their time? Why not setup a Roth IRA and get the same thing but tax-free?

As to "why couldn't any major bank or credit card company implement this and blow them completely out of the water", why not ask instead why they haven't successfully done so? They've certainly tried and failed, and for the most part seems like they are turning to investments/acquisitions of companies in this space since they can't build something successful on their own.

I'm sure they'll love it right up until it gets scrapped. Businesses can't run on love alone. Startups need growth to survive, as soon as this product gets big enough to interest the banks or credit card companies they will make their own and it will be better and cheaper since they can eliminate the middleman.

Maybe they're positioning themselves for an acquisition, but anyone who bought them would just be buying the idea of investing change. The app itself would be killed as its functionality would be combined into the buyers existing app ecosystem, and the backend that takes the change and makes the investments would be largely unnecessary as the banks already have the infrastructure to nickel and dime people.

The context of this article was BlackRock trying to get younger customers. To accomplish this, they invested in a startup whose target audience is apparently people who want to invest, but don't really want to put in the effort. To me that sounds like a questionable investment.

You could argue that they're providing the change investment thing as a loss-leader to try to get people interested in investing, but something like RobinHood already gives inexperienced traders the tools with which to bankrupt themselves.

How much can a customer who adds a few dollars a month to his account be worth anything to an asset manager? Won't it take years before even the user acquisition cost is recouped?

I'm not sure they have tbh, not because they couldn't but because it's not high priority even without regulatory and institutional hurdles to cross. Moving additional pennies around doesn't radically alter the fees banks and credit card providers already get from customers they already market savings products to; a neat little app to start building up savings is an opportunity for investment providers that don't do retail services to gain consumer attention and potentially bigger deposits in the long run though though.

But as you said unless they are banking on moving fast and getting the market share first, this is a very low entry product. BoFa and JPM Chase, which has both consumer and IB/trading operations can do this in a week.

They can "do it" in the same way everyone on HN can build a Facebook clone in a week: by skipping all the parts that make it hard.

Banks are huge, bureaucratic, political organisations with fifteen layers of CYA and red tape around everything that moves. They couldn't change the favicon on their website in a week if the survival of the human species depended on it -- to build and deploy a product that actually shuttles consumer cash around in the market, you're looking at years of planning alone.

Also regarding banks it’s likely not high enough ROI?

Now look at customer acquisition costs and lifetime value of customers for investment firms and IMHO it makes perfect sense on why BlackRock would want to become a large stakeholder in a company like Acorns due to the brand loyalty.

[1]. https://drivenxdesign.com/USAPPS14/project.asp?ID=13420

I could get my bank to round up all my debit card transactions to the nearest $1 to $10, and put that money into a savings account. I could then transfer all that money from my savings account at the end of the month into Sharesies [0], an ETF investment platform, where the minimum investment is $5.

It's not quite seamless, but it's close to seamless. I wouldn't want it to be more automatic than that, personally.

[0] https://www.sharesies.nz/

It was designed to move money into a savings account, but there's nothing stopping from getting their massive customer base to start using their MerrillLynch products with an offering that competes with this (across debit + credit cards).

That said, Im not sure how they can sustain rounding up credit card transactions without taking a big financial hit.

https://www.bankofamerica.com/deposits/keep-the-change/

Lastly, the most important thing to me, how you (the platform) makes money. This part should be absolutely transparent. I should know exactly how you make money, how much money you have made off of me etc.

I'd be more than willing to pay a subscription fee for such a service or a commission fee for the hard work put in.

Lastly, you may say, well these are readily available. Not really. These services are fragmented (not as one platform), not available, at least in India.

1 - Early retirement. Not from the "give it to me" perspective but from the make it easy to budget, save, use frugality as a mechanism to retire early and have reliable 4% withdrawals.

2 - Access to Cryptocurrency trading, and intelligence.

A good example is Google Trends. Useful product. But drastically less useful than if you were the only person in the world with access to it.

Ambiguity is unfortunately a 'feature' of English and the main complaint of those non-native speakers who learn it, though I agree a more focused version like 'intel' provided the necessary context to non-native speakers or folks unfamiliar with this usage of 'intelligence.'

Just pointing out that 'intelligence' is accurate in this usage.

Use with Javascript removed/disabled/"Reader Mode"/etc.

https://addons.mozilla.org/en-US/firefox/addon/read-ft-wsj/

The product is already invented, it's called "work".