Before I start, I am obliged to remind our viewers that this is not advice only general commentary from my extensive research in this area.
In recent times, investing has been made more accessible to society as companies such as RAIZ and Spaceship Voyager have made investing platforms that are very accessible and transparent. These managed funds allow first time investors to get a feel for what it is like to invest while taking out the tricky steps of picking the correct stock at a good price or getting charged broker fees every time you buy and sell. From personal experience, I used RAIZ for the last month to see what sort of return (if any) I could achieve as well as how much money I could save with its purchase roundup features ect. In theory, these companies are revolutionising the way everyday people save and invest their money, in turn helping them improve the overall quality of life. Now say you are interested in using one of these platforms, which one should you use?
Raiz ticks all the right boxes
I recently wrote an article on RAIZ and it’s share price potential in the coming years and I must say after doing my research I decided to see for a month how much I could save using the app itself. The incentive RAIZ offers includes its partnered deals that allow you to shop online through their affiliates and get 2.5-5% back into your RAIZ account. These affiliates range from Adidas, Apple, Ebay, Kathmandu, Nike and even Uber Eats. These are all expenses that you may as well get a return on as you probably use at least one of those companies above let alone the hundred to choose from on the app. The best aspect of Raiz is its innovative way of rounding up a purchase by 45 cents ect. and adding this to your managed fund. After a few months of doing this you will establish a very strong RAIZ balance.
If we break down the portfolio performance we know that the average person would make 11.1% return each year since it’s launch. Raiz charges $2.50 monthly fee for maintenance which equates to $30 a year. If you do the math this means if you assume 11.1% annual return, you must have at least $300 to cover fee charges and make a profit. I also recommend keeping your account under $10,000 as anything above that will get charged a 0.275% commission fee, which holds substantial unsystematic risk. If you intend to invest $10,000 or more you should look into ASX broking partners to obtain a higher ROI. CEO George Lucas quotes that RAIZ is not so much a fund manager or ETF provider, it is a platform to help people save which YIG believes is a strong ethical practise/vision for the company.
Spaceship Voyager educating next gen Investors
The major difference between Raiz and Spaceship Voyager is that the Spaceship fund alerts users of current news that affects their portfolio. What this does is builds the understanding of a new investor and helps them understand why certain news would affect a share price, therefore their own portfolio. The issue I had with Raiz was that I could not do my own research on the ETFs they had bought, as they do not specify this information. Currently Spaceship has 50,000 current members which is a third of the RAIZ community however it was only launched in April last year. It will be very interesting to see whether Spaceship can develop a lead on RAIZ with better ROI. Now Spaceship has averaged their ROI as 6% almost half the average person receives when using RAIZ. The question is, does using Spaceship as a means of education to reach an end goal of investing in the stock market effectively over ride the potenial loss of 5% ROI.
The final verdict
The final decision is simple, if you want to make a better return on your hard-earned money and you already spend a lot on G&S then RAIZ is the perfect app for you. However, if you are new to investing and eventually want to build your own portfolio using a stock exchange independently such as the ASX then Spaceship Voyager is the platform for you. This information is my personal opinion, and is a result of indepth research to help young Australian’s invest. We recommend all our viewers to conduct extensive research before putting money in any security or managed fund.
Here is our free, uncomplicated, and extensive ASX portfolio
You can use this link to get started on your RAIZ app with a free $5 –https://app.raizinvest.com.au/invite/YN45KK
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Tyger Fitzpatrick, founder of YIG.