Addicted to Loyal3 Investing

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My investing hobby started with a few hundred dollars of fun money after maxing out my Roth to invest in individual stocks and ETFs to better understand the stock market. This same Sharebuilder account is now worth $101k and is filled with dozens of stocks and funds. Selling them will be a tax nightmare. I plan to hold them for the long run and sell during a few frugal years in early retirement so they get fairly decent capital gains tax rates.

One thing that always bugged me about my Sharebuilder investments is the trading fees. They used to have a better system where you could pay $12 for 12 auto trades per month — $1 trades weren’t bad, but even with the $1 trades you had to pay $8 or so to trade each individual stock/fund out. Now Sharebuilder got rid of the auto-investing plan and made the cheapest auto trade be about $4. That’s not so bad, but it is bad when you consider the whole premise of Sharebuilder is to build your shares slowly – by investing a little bit at a time. When you really start doing the math you realize these fees are massively cutting into your prospective earnings over time. I often wondered – isn’t there a better way?

The good news is – now there is. Loyal3 (not getting paid for this promo, I genuinely am excited about this company) makes it possible for the average everyday investor to invest directly into companies whenever they want for 100% free trade in and out. The companies are footing the bill to help everyday investors buy their stock. While generally speaking investing in index funds is the best bet, if you’re going to be a hobbyist investor and want to pick up a few individuals stocks without getting jipped on fees, now you have a great resource to do so.

So I got a little carried away tonight and purchase 6 individual stocks. They are limited in what stocks are available – but it turns out about 50% of my existing sharebuilder purchases are available. Unfortunately they don’t allow transfers in (bummer) so I’d have to sell my current shares in order to buy them again and trigger a capital gain just to consolidate my shares, not worth it. But the good news is now instead of wasting $4 per transaction on buying more shares of companies from Coca Cola to McDonalds to Apple, I can just buy however much I want to buy at whatever time and never have to worry about fees again. At least for the companies available to buy… which, granted, is limited at this time, but I bet will grow in the future.

I’m also testing the water for some new investments — I stopped adding new individual stocks to my sharebuilder account because the list was getting ridiculous and I couldn’t justify all the diversification¬†with fees cutting away at my gains… but now diversification is easy, fun, and free. My investments aren’t showing up yet (they take 3 days to transfer in) but tonight instead of splurging on a new pair of jeans I bought some stock for $10 here, $25 there. I’m impressed.

*Note if you are new to investing I still recommend buying Vanguard Index funds!!!





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4 thoughts on “Addicted to Loyal3 Investing”

  1. Diversification buy purchasing individual stocks never works. I’m speaking from experience and most fund managers can’t beat an index fund either.
    Just buy an index fund unless you really plan to do the hard work required to understand the industry, the companies, its financial shape, and its future prospects. If you’re willing to do the work, then invest in maybe 4 to 6 stocks max and go big on all instead of nibbling at them.

  2. This is pretty neat. Thanks for sharing. I’ve always wanted to buy shares of individual stocks in small quantities just for the hell of it, but figured that it didn’t make sense to spend transaction fees for such small transactions. But now I can. Like you, most of our money is invested in index funds, but there’s nothing wrong with a little play money in individual stocks. I don’t think James above gets that that’s what you’re trying to do.

    1. Exactly. It’s 1%-5% of my total networth that’s “play” money. It’s a hobby. And most of the companies available are big brands anyway, I’ve been investing in them on Sharebuilder and paying ridiculous fees to buy them, so now I can just buy some when I feel like it and build my ownership over time. Love the idea!

      1. In that case, you can trade Amazon stock since it’s so volatile as I told commented previously. After I sold it back around August somewhere around high 320s I I bought back after it fell below 300 and then sold again at mid 320s.recently only to see it jump back to 330. It’s fallen to low 310s, probably will buy again if it goes lower than 300 again.
        Better play money bet is Apple, just keep buying and hold onto it. The demand for new iphone is incredible and wait til their watch comes out. Here comes 150!

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