Unlock the storage of wealth with self-storage REITs, the booming real estate investment that offers the potential for high yields, low volatility, and recession-resistant returns.
This article explores a unique Real Estate Investment Trust (REIT) sector: self-storage real estate. The self-storage market exploded over the last decade. Experts expect the sector to grow nearly 32%, to 53.92 billion customers, by 2026.
If you’re interested in real estate investing and considering physical real estate vs. REITs, then self-storage may be a good opportunity for your portfolio.
What Are Self Storage REITs?
Self storage REITs are a specialty sector of the Real Estate Investment Trust market that own and operate storage facilities and rent space to individuals and businesses.
Self storage REITs generate income by collecting monthly rent from their customers. The storage facility can also appreciate, further generating wealth for its owners through the disposition of this asset.
Advantages of Self Storage REITs
Self storage REITs offer many significant advantages over other investments, such as generating passive income, low building and operating costs, and strong demand in an up or down economy.
Generate Passive Income
One of the most significant advantages of self storage REITs is their ability to generate strong dividend yields for their investors.
Meanwhile, the S&P 500, a stock market index that tracks the performance of 500 large-cap U.S. companies, has an average dividend yield of around 1.3%, thus highlighting an attractive opportunity for income-oriented investors.
Low Building and Operating Costs
Another advantage of self storage REITs is their low construction and operating costs.
With storage REITs, there are no expensive brick veneers to build or broken toilets to fix.
To further highlight how self storage REITs are reducing operating costs is their increasing adoption of automation technology. Many self storage operators are fully or partially automating their properties. Adopting automation can significantly increase the net operating income of a self storage REIT.
A Cushman & Wakefield white paper on self storage highlights that automation can reduce the need for an onsite property manager, saving a storage operator upwards of $60,000, thus increasing the property’s net operating income.
Strong Demand in Up or Down Market
Lastly, another key advantage of self-storage REITs is their demand resiliency. Consumers need and demand self storage units whether the economy is in an upturn or a downturn – a characteristic largely unique to the self storage business.
For example, when the economy is in a downturn, people downsize. Downsizing often requires rental space to store belongings that can no longer fit in their home or apartment.
When the economy is prospering, consumers commonly purchase more items than they can keep in their homes. And utilizing their extra income, consumers will likely rent a self storage unit to store their extra possessions.
According to the Self Storage Association, the self storage market is expected to grow nearly 32% to a 53.92 billion market in 2026.
Risks of Self Storage REITs
Self-storage real estate investment trusts (REITs) have some risks like any investment. Here are some potential risks to consider before investing in self storage REITs:
Regulatory Risk
Self storage REITs are subject to regulations related to zoning, building codes, and environmental issues. Changes in laws could impact the ability of self storage REITs to operate or expand their facilities, which could affect their profitability.
Limited diversification
While self storage REITs invest in properties across different geographic locations, they are still primarily focused on a single asset class. This lack of diversification may not be suitable for all investors looking to diversify their portfolios across multiple asset classes.
Potential for Oversupply
Because self storage has low building and operating expenses, and therefore fewer barriers to entry 5han apartment REITs, self storage REITs run the risk of oversupply, i.e., more self storage space than there is demand.
How To Evaluate Self Storage REITs
Here are some key factors to consider when evaluating self storage real estate investment trusts (REITs):
Occupancy Rates
Occupancy rates are among the most important metrics for evaluating self storage REITs. This indicates the percentage of units that are currently rented out. A high occupancy rate suggests that the REIT successfully attracts tenants and manages its properties effectively.
Rental Rates
Rental rates are another important factor to consider. Higher rental rates generally indicate a strong demand for storage units and a competitive market position.
Geographic Diversification
It’s important to evaluate the geographic diversification of the REIT’s portfolio. A REIT with properties in multiple locations can help mitigate risks associated with localized economic or regulatory changes.
Property Quality
The quality of the REIT’s properties can impact its competitiveness in the market. Look for properties that are well-maintained, secure, and have modern amenities.\
Financial Performance
Review the REIT’s financial performance, including revenue, net income, and funds from operations (FFO), a key metric for evaluating REITs. A history of strong financial performance can indicate a well-managed and financially stable REIT.
Management Team
The experience and track record of the REIT’s management team can also be an important factor. Look for a management team with a proven history of success in the self storage industry.
Valuation
Lastly, evaluate the valuation of the REIT relative to its peers and the broader market. Consider factors such as the price-to-earnings (P/E) ratio and dividend yield.
Popular Self Storage REITs
If you are interested in self storage, below are some of the most popular publicly-traded self storage REITs.
Public Storage (PSA): Public Storage is the largest self storage REIT in the United States, with over 2,500 facilities in 38 states. The company was founded in 1972 and has a market capitalization of over $47 billion as of September 2021.
Extra Space Storage (EXR): Extra Space Storage is the second-largest self storage REIT in the United States, with over 1,900 facilities in 40 states. The company was founded in 1977 and has a market capitalization of over $21 billion as of September 2021.
CubeSmart (CUBE): CubeSmart is a self storage REIT that operates over 1,200 facilities in 38 states. The company was founded in 2004 and has a market capitalization of over $9 billion as of September 2021.
Life Storage (LSI): Life Storage is a self storage REIT that operates over 950 facilities in 34 states. The company was founded in 1982 and has a market capitalization of over $7 billion as of September 2021.
National Storage Affiliates Trust (NSA): National Storage Affiliates Trust is a self storage REIT that operates over 800 facilities in 35 states. The company was founded in 2013 and has a market capitalization of over $5 billion as of September 2021.
These self storage REITs have grown in popularity due to the growing demand for self storage units and the stable income generated by renting out these units monthly. They offer investors a way to invest in real estate without buying property.
The Bottom Line
Self storage REITs can be a good investment option for income-seeking investors and those looking to diversify their portfolio with exposure to the real estate sector.
Self storage REITs also offer the potential for long-term growth and diversification in a portfolio. However, as with any investment, it’s important to conduct thorough research and seek the advice of a financial professional before making any investment decisions.
Acorns is a micro-investing app that helps you grow your wealth with just a few cents at a time – By rounding up purchases and investing the difference.
Quick Summary:
Acorns is a micro-investing app that helps individuals invest small increments of money through round-ups. When you open an account with Acorns and opt-in for “round-ups,” debit card purchases are rounded up to the nearest dollar. They also offer retirement accounts and custodial accounts if you have a family.
Overall Rating:
Tools & Features:
Ease of Use:
Price:
PROS
No minimum investment
Simplicity
Micro-investing
CONS
Limited investment options
High fees
Lack of control
Price:
$3 – $9/mo
Features:
Rounds up transactions to the nearest dollar and invests the difference
In our Acorns Review 2023, we’ll dive into the ins and outs of this beginner-friendly investing app so you can decide if it’s the right investment tool for you.
What is Acorns?
Imagine if your spare change could grow into a thriving investment account. That’s the magic of Acorns, a smartphone app that allows beginners to start investing with just a few dollars. Acorns helps users grow their wealth over time through its unique feature of rounding up transactions from your linked accounts and investing the difference. Once the rounded-up transactions reach $5, Acorns invests that amount in a portfolio and ETFs and Bonds based on your pre-selected risk tolerance.
Note: The average Acorns user rounded up $46.82 in spare change in 2022, according to Acorns research.
Acorns is designed for people who want a simple, hands-off approach to investing. The app offers the following features:
Links your credit card and checking account
Rounds up each transaction to the nearest dollar
Invests the difference in a pre-selected Acorns investment portfolio
This helps you to start building your nest egg effortlessly. Acorns also offers custodial investment accounts for kids through Acorns Family, making it a great option for the whole household.
How Does Acorns Work?
Acorns is a micro-investing app that helps individuals invest small increments of money through round-ups. When you open an account with Acorns and opt-in for “round-ups,” debit card purchases are rounded up to the nearest dollar.
Once the round-ups reach five dollars, Acorns automatically invests the money on your behalf, making it a truly seamless investing process.
The investments are made based on a pre-selected portfolio based on your desired risk tolerance – from aggressive to conservative.
Round-Up Example:
You buy a coffee for $3.50
Acorns rounds up the purchase to $4.00
The difference: $0.50 is set aside
Once your round-ups reach $5, that amount is automatically invested based on your investment selection.
There are also round-up multipliers – you can adjust your round-ups to be 2x, 3x, or even 10x, the rounded amount to magnify your investing.
I have my round-ups set up to 3X.
Once you open and select your account type ( I opened an Acorns Personal), you connect your account, choose a level of risk tolerance, and let the app do the rest. I was able to open my account in a matter of minutes.
When I opened my account, I selected an “Aggressive” account comprising 55% VOO, 30% IXUS, 10 % IJH, 5% IJR. I also set my round-ups to 3X and recurring cash deposits to $30 daily.
Who Should Use Acorns?
Best For:
Beginner Investors: If you’re unsure how to get started, Acorns makes it easy by automating the entire investment process.
Set it and forget Investors: Investors who want a way to invest without thinking too hard.
Investors with a tight budget: If you don’t have hundreds or thousands of dollars to invest, the round-up functionality of Acorns makes it easy to start investing with just a few cents at a time.
Key Features
The secret sauce behind Acorns lies in its innovative approach to investing. The app simplifies the investing process and aids in wealth creation by rounding up transactions from your linked accounts and investing the surplus, all without your active realization.
We’ll explore further how Acorns facilitates this.
Round Up Transactions
Acorns’ “round-up” feature is the heart of its micro-investing strategy. When you make a purchase with a linked debit or credit card, the app rounds up the transaction to the nearest dollar and moves the difference from your linked bank account into your investing account. Hence, without active effort, you consistently investing small amounts of money.
To boost your investments further, Acorns also offers “Round-Up Multipliers,” which allow you to multiply your round-ups by two, three, or even ten times. This means you can invest even more spare change with each transaction, accelerating your savings growth. You can turn on and off round-ups as you please.
Account Types
While Acorns’ primary feature is micro-investing, the platform also offers 3 account types with various features to suit different needs. From personal investment accounts to family plans, there’s something for everyone, including the option to have a linked account.
Whether you’re looking to save for retirement, build a college fund, or just
Acorns Personal
For just $3 per month, Acorns Personal gives you access to a comprehensive suite of financial tools. In addition to the Acorns Invest platform, this tier includes Acorns Later – a retirement account offering Traditional IRA, Roth IRA, and SEP IRA options. You’ll also get Acorns Checking, a cash management account with direct deposit, mobile check deposit, over 55,000 free ATMs, and a debit card that applies Acorns and Acorns Later investing to every purchase.
Acorns Personal Plus
Investing
Personal, diversified investment account
Round up your spare change
Retirement account with tax advantages
Investment accounts for kids
Add stocks to your diversified portfolio
Acorns Premium
For $9 per month, Acorns Premium provides access to a full suite of investing tools for you and your family. When you open a premium account, you can invest in individual stocks – a feature unavailable at the Personal and Personal Plus levels.
Investing
Personal, diversified investment account
Round up your spare change
Retirement account with tax advantages
Investment accounts for kids
Add stocks to your diversified portfolio
Banking
All digital banking with no hidden fees
Debit card that invests with every swipe
Auto-invest a piece of each paycheck
Save with an Emergency Fund
Education
Basic courses to get you started
Live Q&A with financial experts
Regular market reports to stay in the know
Live onboarding guidance
Earning
Earn bonus investments at 15K+ stores
Up to 30% invested while you shop
Shop with our Chrome & Safari extension
Extra bonus investments on qualifying rewards
Benefits
GoHenry debit card and learning app for kids
Complimentary will, valued at $259
$10,000 life insurance policy for eligible customers
Investment Options
When you invest through Acorns, you must select a “theme” – either core portfolios – which gives exposure to a wide range of ETFs and bonds, depending on your risk tolerance. The other theme is “ESG” portfolios. These portfolios provide returns similar to traditional investments, with the added benefit of exposure to socially responsible companies. You can invest in bitcoin ETFs through the ESG portfolios.
Select a Theme – Core Portfolios or ESG Portfolios
Select a level of Aggressiveness Ranging from Aggressive to Conservative.
Once you select your level of aggressiveness, Acorns will automatically invest in stocks and ETFs that fit the risk profile.
To provide context, an aggressive portfolio is comprised of primarily large cap stocks, while a conservative portfolio is comprised of short term government and corporate bonds.
In my opinion, the “aggressive” portfolio isn’t that aggressive because 55% of it invests in VOO, which is simply an S&P 500 index fund, but perhaps this is intentional because Acorns is targeted toward beginner investors.
User Experience
Acorns is available for desktop and mobile devices, and both offer a sleek design and easy-to-use interface.
Desktop
When you log in to the Acorns website, your accounts are neatly organized, and it shows the available balances in each account.
I did find it slightly annoying that despite only opening a “Personal Account,” the homepage showed the option to set up a “Later” account and an “Early” account instead of hiding them from view.
You can also see “bonus” amounts earned from places you can shop at. Although I find it somewhat odd that they advertise Acorns as an investing and savings app, but, in my view it encourages you to spend by showing you what stores you can earn cash back at.
Mobile
Most Acorns users, including myself, use the mobile app more frequently than the desktop app.
The mobile app is nicely designed and has a similar feel compared to the desktop. I could log in to my Acorns account using facial recognition to avoid fumbling with long passwords.
Like the desktop, I did find it slightly annoying that despite only opening a “Personal Account,” the homepage showed the option to set up a “Later” account and an “Early” account instead of hiding them from view.
PROs and CONs Explained
PROS
Low Minimum Investment: You can start investing once your round-ups reach just $5, meaning you don’t need hundreds of dollars to buy just 1 stock.
Simplicity: The beauty of Acorns is its simplicity. Many users like the “set-it-and-forget” approach to investing and are often overwhelmed by constantly having to make investment choices.
Micro Investing: For those who don’t have the financial means to invest large amounts of money or don’t want to invest right away, Acorns’s micro-investing strategy is a great way to get started.
CONS
Limited investment options: The investment options available through Acorns are limited to a pre-selected set of ETFs, which may not be the best fit for everyone’s risk tolerance and investment goals.
Lack of control: With Acorns, you do not have the option to choose which specific stocks or bonds you want to invest in. You also can’t control your risk by adjusting your allocation or by choosing different funds.
High fees: The fees associated with using Acorns can be relatively high, especially when compared to other investment options. The app charges a monthly fee of $3, $5, or $9, depending on the plan, which can eat into your returns over time.
Pricing and Fees
While Acorns’ unique investing approach is undoubtedly attractive, it’s equally important to reflect on the platform’s fees and its competitiveness in the market.
Acorns offers three subscription tiers: Personal for $3/month, Family for $5/month, and Premium for $9/month. Each tier provides a range of features, with the higher-priced options offering more extensive benefits such as access to Acorns Early and Acorns Grow.
Acorns doesn’t charge any other management fees or commissions. However, you will have to pay any fees that are charged by ETFs you have invested in. In addition, there is a monthly fee depending on which subscription tier you have:
Personal: $3 month
Family: $5 month
Premium: $9 month
Management Fees: Varies depending on the funds you are invested in.
Withdrawal Fees: None for investing accounts. Fees may apply for retirement accounts.
Fee Comparison
On an absolute basis, Acorns fees aren’t high $3 – $9 per month is nothing to most people.
Compared to other robo-advisors, Acorns’ fees can be relatively high for users with small investment balances. For example, a $36 annual management fee on a $1,000 balance equates to a 3.6% fee. This is considerably higher than the standard management fee of 0.50% charged by many robo-advisors, according to Investopedia.
However, as your investment balance grows, Acorns’ fees become more competitive. At a $10,000 balance, you’d be paying a more reasonable 0.36% fee per year. Reflecting on your investment balance and comparing fees is crucial to ascertain whether Acorns aligns with your financial needs.
Acorns
Robo-advisor
Amount Invested
$1,000
$1,000
Average Fee
0.50%
$3/month
Fee over 12 months
$5.00
$36
Fee %
0.50%
3.60%
Acorns Earn: Boost Your Investments
In addition to its core investment features, Acorns also offers a unique rewards program called Acorns Earn. This program helps you boost your investments by earning extra cash through cashback partnerships and a browser extension.
Because credit card points can be so lucrative days with many top cards offering up to 3% cashback, by offering a cashback program Acorns aims to attract users who might be otherwise turned off by losing credit card points.
Cash Back Partnerships
Through Acorns Earn, you can shop with over 12,000 brands, including:
Airbnb
Blue Apron
Macy’s
Warby Parker
And receive cashback rewards directly into your Acorns account. This means you can grow your investments simply by shopping with participating brands.
To make the most of these cashback rewards, follow these steps:
Shop through the Acorns app or website.
Use your linked payment method to make your purchases.
Acorns will automatically invest cashback rewards into your account, helping you grow your wealth even faster.
Best Alternatives
Acorns faces competition from other micro-investing apps and robo-advisors, each with its own unique features and pricing structures.
For those seeking a more comprehensive investment platform or wanting access to human financial advisors, alternatives like Betterment or Stash may be more suitable.
Stash
Both Acorns and Stash offer micro-investing features, but there are some key differences between the two platforms. While Acorns focuses on rounding up transactions and investing the difference in a pre-selected portfolio, Stash allows users to invest in individual stocks and choose from a broader range of investment options.
In terms of fees, both platforms charge a monthly fee, with Acorns’ fees ranging from $3 to $9 and Stash’s fees starting at $1 for its most basic plan. However, Stash may offer more flexibility and control over investments for users looking for a more hands-on approach to micro-investing. At the same time, Acorns is better suited for individuals who want a more hands-off approach.
Betterment
Acorns and Betterment are both robo-advisory platforms that offer automated investment management services. However, Betterment provides a more comprehensive range of investment options and lower fees for larger account balances.
Betterment’s annual fee is 0.25%, which is lower than Acorns’ fees for small balances.
For example, you would need more than $10,000 invested with Acorns for a comparable fee rate. For users with larger investment balances, Betterment may be a more cost-effective option, offering more extensive investment options and lower fees.
The Bottom Line
Acorns offers a unique approach to investing, making it an attractive option for beginners and those looking to build a savings habit without too much leg work.
With its innovative rounding-up feature, Acorns makes it easy to grow your wealth without even realizing it. That said, if your employer offers a tax-deferred retirement account like a 401K or a 403B, you may be better off investing through that account as years of tax-free growth can add up.
Lastly, I would not consider myself a beginner investor and don’t find the app’s novelty particularly useful. I can see how some users like the idea of investing micro amounts of money under the veil of not realizing those round-ups are being invested, so there is a specific time and place for this app.
Overall, that app isn’t a bad idea for pure beginner investors, but more experienced investors are likely better off investing independently.
Acorns offers a convenient way to invest money and save for retirement, making it an attractive option for beginners. Its user-friendly app has high ratings, micro-investing feature, and diversified funds that help make investing safe and secure. Whether Acorns is worth using depends on your investment goals and whether the fees are worth it.
What is the downside to Acorns?
Acorns’ fees can be expensive, especially on small balances, and there is no tax strategy available. Additionally, you won’t have access to more advanced features like other robo-advisors offer. All this makes it hard to justify Acorns for those starting with lower sums to invest.
Is Acorns legit and safe?
Acorns is a legitimate and safe app, employing 256-bit encryption, two-factor authentication, and securities protected up to $500,000 with the Securities Investor Protection Corporation (SIPC). All of this makes it an excellent choice for securely managing your finances.
Is Robinhood or Acorns better?
It depends on the investor’s personal preferences: for hands-on investment, Robinhood is the better option for trading individual stocks, ETFs, and Cryptocurrencies. Meanwhile, Acorns offers more features for hands-off investing, such as impact investing and custodial accounts. Ultimately, by comparing Robinhood vs. Acorns, you can choose the platform that best suits your needs.
Mindful Trader is a data-driven swing trading platform that provides stock and option picks with the goal of generating long-term wealth.
Quick Summary:
Mindful Trader is a swing trading platform that provides subscribers with stock and options trades. The platform was built using a proprietary statistical algorithm that was back-tested using over 20 years of market data.
Mindful Trader is a stock and option-picking alert service focusing on swing trading. Swing trading is a trading style that generates profits from small to medium price movement over a short period – typically a week or less.
Mindful Trader was built on the premise that using rigorously back-tested statistical strategies can generate wealth through stocks, options, and futures trading.
The platform was founded and built in 2020 byEric Ferguson, who has over 20 years of stock trading experience. He spent over 4 years and $200,000 of his own money developing the statistical tools used by Mindful Trader. He has a degree in Economics from Stanford University – his pedigree is legit.
How Does Mindful Trader Work?
Mindful Trader is a stock and option-picking alert service focusing on swing trading. The deployed trading strategy is based on a proprietary quantitative strategy developed by Eric using 20 years of backtesting. Without getting too specific, Eric employs an array of rigorous statistical tests to identify stocks, options, and futures that meet his investing criteria.
As a paid subscriber, you will get real-time access to all of Eric’s positions so you can follow along, including when he enters and exits his positions.
Unlike day trading services, which require you to be glued to your computer, Swing Trading provides more flexibility to take advantage of stock picks. And like most people who have busy lives, the flexibility swing trading provides is unrivaled.
One helpful feature not available in many other stock picking services is that you will know the exit parameters up-front. Other stock picking platforms often tell you the entry point – but will only notify you when you are exiting the position – increasing the opportunity for errors and unnecessary stress.
At $47 a month, subscribers get access to all of Eric’s trades, plus educational resources about stock and option trading.
I really like that Eric emphasizes that using the Mindful Trader platform is not a get-rich-quick scheme, and you should probably practice with paper trading before executing using real capital.
How Do The Trade Alerts Work?
Below is a theoretical of how a trade may play out using Mindful Trader.
A Stock is Watchlisted: Before a trade is executed, most stocks start on Eric’s watchlist, which are positions that are close to their entry point. The watchlist includes: the watch date, ticker symbol, potential entry price, profit target, and stop loss.
Trade is executed: Once a trade is executed, it is added to the Main Account page, as seen below. The site has no direct alert features, but you can set up alert features through third-party apps like Watchete.
Holding Period: Swing Trades are typically held for a week or less.
Sells: Once a trade reaches its profit target or stop loss, the position is closed out, and P&L is generated.
The process is fairly straightforward, but you need to get comfortable to ensure you are following the alerts properly.
Upon reviewing the trade activity, most of the positions are long trades, and he appears not to have taken a short position since 2021. Furthermore, most of the options trades appear to be call options, with no put options or advanced options strategies.
Who Should Use Mindful Trader?
Mindful Trader is GOOD For:
Swing Traders: If you’re a swing trader – Eric is your guy. I’m not aware of anything other swing trading services available.
Data-Driven Traders: This stock alert platform could benefit you if you like Eric’s analytical investing approach.
Mindful Trader is Not Good For:
Long-term Investors: Given the short nature of the trades, it is not good for long-term investors. You are likely better off with a buy-and-hold strategy.
Risk-averse Investors: Swing Trading is a risky strategy, plain and simple. Mindful Trader is not right for you if you cannot stomach the downs.
You might also like Motley Fool. 462% Gains since inception.
There are 8 key components to Eric’s trading strategy that, when combined together, create a cohesive trading strategy that aims to give subscribers a statistical trading edge.
Trading Strategy Explained
Many of the techniques described below are common statistical approaches used by professional traders (at banks and hedge funds). However, they often have teams of people crunching the numbers. It’s pretty impressive that this was created by one person.
Raw Edge: This means that the back-tested strategy must work regardless of the specific criteria used, such as a profit target of 3.6%. P.S. He could probably think of a better adjective to describe this.
Backtesting: Every trading strategy undergoes extensive backtesting (historical data analysis) for at least 20 years. This ensures that the strategies are versatile and effective across various market conditions, from bullish to bearish and everything in between.
Monte Carlo Simulation: The Monte Carlo Simulation Eric runs performs 10,000 different random variations of the ordering of the transaction profit results from the backtests.
Statistical Correlation tests: The service conducts statistical correlation tests to ensure that individual strategies within the portfolio are not too closely correlated. This process diversifies the portfolio and shields it against potential synchronized strategy failures.
Out-of-Sample Tests: To avoid overfitting, out-of-sample tests are performed. This means that strategies are not only backtested on one historical sample, but also validated across different time periods to ensure their effectiveness.
Standard Deviation Tests: Once the strategies are live, their performance is continually monitored against their 20-year standard deviation lines from backtesting results. This helps ensure that the strategies are performing within the expected parameters.
Account for Slippage: All backtests account for transaction costs and slippage (the difference between the expected price of a trade and the price at which the trade is actually executed). This leads to a more accurate representation of potential returns.
Sharpe Ratio: Eric checks the Sharpe ratio of the backtested returns of his portfolio of strategies over time. This ratio indicates how consistent the returns could have been by comparing the annual rate of return to the standard deviation of those rates of return. The smoother the distribution, the better.
For example, The Sharpe Ratio is looking for consistent profitability, not 11 months of negative returns and 1 month of positive returns.
Daily Trading Commentary
Subscribers also get access to daily trading commentary provided by Eric. You can also view past commentary on the Mindful Trader website.
Erice provides a high-level update on the markets and provides color around his positions, including any newly closed or open positions. As a subscriber, this commentary helps me keep a pulse on the market and review Eric’s trading positions.
Educational Resources
Mindful trader subscribers also have access to stock and options education developed by Eric. Most of the educational resources are YouTube videos, which are technically available for free. I have watched a few of his basic options videos, and they are fairly easy to follow and not too long.
Mindful Trader educational resources include:
Stock and Option Videos
Options Calculator
Resources about Eric’s Stock Strategy
Returns
Understanding the returns can be kind of tricky. But Eric posts returns across 3 different accounts.
Mindful Trader has 3 types of accounts: 1. Main Account – which is primarily stock trades with some options trades, 2. Options Account – This account is dedicated to options trading. This account might have more potential risk and reward than the Main Account, 3. Double Down Account.
Eric is transparent when it comes to his returns. He doesn’t only highlight the accounts with “good” returns, but also highlights accounts with lower returns. Eric highlights the risk involved in his strategies, and I certainly appreciate his transparency – he quickly points out that this is not a get-rich-quick scheme.
Options Account Returns:-8.2% Since May 2021. All of the options trades are swing trades. Eric lists all the options trades, including ticker, date closed, exit price, and profit. As you can see in the image below, the performance is extremely volatile, and less than stellar. At one point, the returns were as low as -50% and as high as +17%.
Double Down Account Returns -4.1% since inception. The Double Down account shows all the positions, too. This account has stocks and options. The account has a lower trade volume but a larger back-tested edge. As you can see below, the double-down account has had some success, touting returns as high as nearly +21.69% at one point. Like the Options Account, there is also extreme volatility in the performance of this strategy.
Main Account Returns:-48.2% since April 2023 (inception) comprised of equity, options, and futures trades. Not great returns, but it’s a risky strategy. It’s not an apples-to-apples comparison, but during that same time period, the S&P 500 returned 0.82%, according to Y Charts. Furthermore, if you are a subscriber, you view every trade Eric has made since inception.
Eric does note some general commentary about his performance, but it seems quite outdated (from 2021).
The commentary from his main account is outdated.
User Experience
Signing up for Mindful Trader was an easy experience, and I could sign up in a few moments. You can use a PayPal account or credit card.
Once you’re signed up, you can immediately access all of Eric’s trading data and strategy.
The website is simple. However, the website user interface feels quite outdated – serious 2009 vibes. But Eric’s a math guy, not a website designer – so I can’t knock him for that.
One drawback I noticed is that you cannot download the historical data into an Excel spreadsheet – again, not a huge deal – but most stock-picking sites offer that functionality. They could find the lack of functionality slightly annoying. Additionally, there is no chatroom functionality to talk shop with other subscribers – again, a feature many other stock-picking platforms provide.
On a positive note, Eric is transparent and provides details for every trade made since inception, including the details.
I also found navigating between the 3 types of accounts confusing, but maybe that’s because I am new to the platform.
PROs and CONs Explained
Let’s look at the PROs and CONs of Mindful Trader to help you decide if this platform is right for you.
PROS
Skin-in-the-Game: Eric trades with his own money – he has skin-in-the-game. There’s no theoretical portfolio like some other stock-picking services.
Transparency: Eric has winners and is not shy about his losers. He doesn’t claim subscribing to his service will make you a millionaire in 30 days.
Fast Communication: If you send Eric a message, he’ll reply to you very quickly. I sent an email, and he replied within 24 hours. That’s quick for a one-man shop. See below:
CONS
Price: $47 per month isn’t cheap.
No Integrated Alert System: Unlike other stock picking platforms, there is no integrated alert system to notify you of new trades. You will have to use a 3rd party app like Wachete.
No Chat Rooms: There’s no way to communicate with other subscribers to talk shop or discuss recent trades.
Price and Value
At $47 per month, Mindful Trader isn’t cheap, especially compared to some more established stock-picking services like Motley Fool. However, there is no long-term commitment – you can cancel anytime, no questions asked. There are no hidden fees, and there is one pricing tier, which doesn’t force you to make a decision about what the “best value” is.
$47 per month includes: All Stock and Option Picks, Trading and Market commentary, and Stock and Option Tutorials.
Month-to-Month contract
Cancel Anytime
Best Alternatives
1. Motley Fool
Why it Stands Out: The Motley Fool Stock Advisor shines with its specific stock recommendations, backed by detailed analysis and a strong track record of performance. This valuable feature aids investors of all levels to identify potential investment opportunities in the stock market. While Alpha Picks has had tremendous success, Motley Fool Stock Advisor has been around for many years, making spectacular bets on the largest tech stocks. While Motley Fool isn’t a stock alert service like Mindful Trader, their returns are legit, so I thought it was worth noting.
Returns: +462% since inception
Best For: Both novice and experienced investors who appreciate guidance on stock picks and investment strategies
Pros: Provides specific stock recommendations, offers in-depth reports, and a solid track record of performance.
Cons: Requires a subscription; not all recommended stocks may suit every investor.
Why it Stands Out: Stock Market Guides identifies stock and options trading opportunities that may have a historical track record of profitability.. Their trade alerts put the historical performance of each trade setup at your fingertips. Unlike MIndful Trader, this platform offers real-time alerts. However, they don’t actually trade their own money.
Best For: Swing Traders looking for real-time trading alerts
Pros: Real-time trading alerts, Pre and Post Market Hours alerts
Cons: No skin-in-the-game, Stock, and Options Alerts require separate subscriptions, do not tell you when to exit trades
Price: $49/month
Current Promotions: None listed
The Bottom Line
The thing with these stock picking platforms is that traders and investors expect to see immediate results “I canceled after my 2nd month because I lost money.” Making or losing money in the market in 2 months is pretty much a coin flip, but I guess that’s the nature of the beast.
As the founder says, if you expect to become a millionaire overnight, you probably shouldn’t sign up for Mindful Trader. Most people probably sign up for a month or two, either make a little money or lose money – and then opine on whether the platform is worthwhile.
Based on what I have seen through my subscription, Eric is transparent and appears to be an honest guy. He thoroughly explains his trading strategy and highlights that they can certainly make money and lose money – which, in and of itself, says a lot about his stock alert platform and ethical tendencies.
If you’re into swing trading and can afford the $47/month subscription, why not give it a shot. But, if $47/mo is a lot of money for you, and you don’t have the capital to risk, you’re probably better off saving your money.
Frequently Asked Questions
What is Backtesting?
Backtesting is a finance concept to test how a trading strategy would have performed using historical data. By doing this, investors and traders can gauge the effectiveness of a strategy before applying it in real-world scenarios. This process helps identify potential risks and rewards, allowing for better-informed decision-making. Backtesting answers the question: “If I had applied this strategy in the past, how would it have turned out?”
What is Swing Trading?
Swing trading is a type of trading strategy aimed at capturing gains in a stock or other financial instrument over a period ranging from a few days to several weeks. This approach is based on the idea that short-term movements, driven by supply and demand dynamics, can be identified and leveraged for profit.
What’s The Difference between Swing Trading and Day Trading?
Swing Trading and Day Trading sound similar but are different trading strategies. Day Trading is when a position is held for less than a day, sometimes minutes. Swing Trading, meanwhile, is also a form of short-term trading, but positions are often held for a week to a few days.
Our Review Methodology
Investing in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:
Tools and Features
We dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:
What is its main offering, and how does it compare to its peers?
How effective are the risk assessment tools?
Are there any value-added services like educational content?
Price and Value
Price matters, especially when it comes to investing, where every penny counts. We analyze:
Subscription fees
Hidden Charges
Price compared to the overall value received
We’ll let you know if the platform gives you the most bang for your buck.
Ease of Use
User experience can make or break an investment platform. We assess:
Interface Design – Is it intuitive and easy to use?
Mobile app availability and functionality
Customer Support – where applicable.
Nobody wants to navigate a clunky interface when dealing with their hard-earned money.
Stock Breakdown
Good investing is rooted in great research. We examine:
The quality of stock analysis tools
Returns on an absolute and comparative basis
Availability of real-time data
Depth of research
We check if the platform provides actionable insights to make informed decisions.
How We Do It
Hands-On Testing: I signed up for Mindful Trader to provide real insight. This is how I give my unique perspective. We’re unlike some other sites where they simply rehash marketing materials.
Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.
Comparative Analysis: Finally, we compare each platform against competitors regarding features, pricing, and user experience.
Overview: Alpha Picks is Seeking Alpha’s in-house investing group. Alpha Picks subscribers get 2 monthly stock picks selected by their in-house investment team run by Steven Cress, a former Hedge Fund manager
Returns:Alpha Picks has returned 159%, vs. 55%, outperforming the S&P 500 three-fold since inception in 2022(returns as of January 2nd 2025).
Price: $41/mo ($449/year)
Current Promotions: $50 off full price of $499
Pros: Stock market outperformance, investing community engagement
Cons: Limited track record, requires familiarity with the Seeking Alpha Rating system, No skin in the game
Note: Alpha Picks is a stand-alone investing service from Seeking Alpha. You do not get a Seeking Alpha subscription with an Alpha Picks subscription – they are two different services.
When I signed up for Alpha Picks, I was a bit skeptical, given its limited track record. However, the service has continued to outperform the market, so I can’t complain.
2. Best for Buy and Hold: Motley Fool Stock Advisor
Best For: Long-term investors
Overview: Stock Advisor offers monthly stock picks from the company’s co-founders, Tom and David Gardner, who each manage separate teams of analysts. The service recommends stocks from established companies with proven track records and strong growth potential. Stock Advisor also recommends when to sell, a feature differentiating it from many other stock-picking services.
Pros: 2 stock picks per month, High long-term returns, stock research reports
At $99/year, it’s hard to beat the pricing. I’ve used Motley Fool for a while, and while none of their recent investments have been home runs, it’s a good subscription to keep in your investing stack.
*$99 is an introductory price for new members only. 50% discount based on current list price of Stock Advisor of $199/year. Membership will renew annually at the then-current list price.
3. Best for Momentum-Oriented Investors: CNBC Investing Club with Jim Cramer
Best For: Active investors, momentum-oriented investors
Overview: The CNBC Investing Club is a subscription-based investing service that provides stock picks, portfolio analysis, and market news from Jim Cramer and his team. Jim created the Investing Club to help all investors build long-term wealth in the stock market, and the CNBC Investing Club is now the official home of Jim Cramer’s Charitable Trust. The investing club is the only place to view the charitable Trust’s stock picks. It’s not available on Mad Money or any other investing platform related to CNBC.
Returns: 17.06% over the past 5 years (Since 2019).
Price: $49.99/mo
Current Promotions: 20% off Yearly Subscription
The investing club’s performance is largely on par with the S&P500’s returns over the same period. While this isn’t necessarily bad, I wouldn’t expect to see any really unique picks.
Overview: Mindful Trader is a stock and option-picking alert service focusing on swing trading. Swing trading is a trading style that generates profits from small to medium price movement over a short period – typically a week or less. Mindful Trader was built on the premise that using rigorously back-tested statistical strategies can generate wealth through stocks, options, and futures trading. The platform was founded and built in 2020 byEric Ferguson, who has over 20 years of stock trading experience. He spent over 4 years and $200,000 of his own money developing the statistical tools used by Mindful Trader. He has a degree in Economics from Stanford University – his pedigree is legit.
Returns: Varies depending on investment strategy
Price: $49.99/month, no long-term commitment
I used Mindful Trader for a very short time frame and found the constant trading somewhat difficult to follow and the website cumbersome. I’m more of a buy-and-hold investor, not a swing trader.
5. Best for Short Term Trading: Action Alerts Plus
Best For: Short-term traders
Overview: Action Alerts PLUS is a subscription-based stock-picking service offered by TheStreet.com. This service was founded by financial analyst and commentator Jim Cramer, known for his work on CNBC’s “Mad Money,” along with a team of research analysts.
Stock picking services are platforms that offer recommendations on which stocks to buy and sell. They’re designed for investors who may not have the time or expertise to conduct thorough stock research on their own.
What to Look for in Stock Picking Services
When evaluating stock-picking services, it’s important to consider several key factors to ensure you choose a service that aligns with your investment goals and style.
Track Record: Check the service’s historical performance. A consistent record of successful stock picks is a good indicator of reliability.
Investment Philosophy: Ensure their approach matches your investment strategy, whether it’s long-term growth, value investing, or short-term trading.
Transparency: A reputable service should be transparent about their successes and failures, providing detailed analysis to support their picks.
Cost vs. Value: Assess the subscription cost relative to the value you receive. High fees do not always equate to high returns.
Quality of Analysis: Look for services that provide in-depth research and analysis rather than just stock tips. Understanding the ‘why’ behind a pick is crucial.
Diversity of Picks: A good service should offer a range of picks across various sectors and industries to help diversify your portfolio.
Educational Resources: Especially beneficial for new investors, educational content can enhance your understanding of the market.
Frequency of Picks: Ensure the frequency of stock recommendations aligns with your desired level of market activity.
Even the best stock picking services don’t guarantee profits, and investing always involves risk. It’s important to use these services as one of many tools in your investment strategy and not rely solely on them for decision-making.
Conducting your own research and due diligence is always crucial in investing.
Stock Picking Strategies
Value Investing: This strategy involves looking for undervalued stocks that are priced below their intrinsic value. Investors using this strategy believe the market will eventually recognize and correct the undervaluation.
Growth Investing: Growth investors seek companies with strong potential for future growth. These stocks may not pay dividends but are expected to grow at an above-average rate compared to other companies in the market.
Income Investing: Focused on generating steady income, this strategy involves buying stocks with high dividend yields. It’s popular among retirees and those seeking regular income.
Momentum Investing: Momentum investors look for stocks that are experiencing an upward price trend. They buy these stocks and hold them until the trend begins to reverse.
Index Investing: While not strictly stock picking, index investing involves buying index funds that track a market index, offering diversification and reflecting the market’s performance.
Technical Analysis: This strategy uses statistical trends gathered from trading activity, such as price movement and volume
Stock-picking services offer several benefits, particularly for individual investors who may not have the time or resources to conduct extensive market research.
Expert Analysis: Stockpicking services often have experienced analysts who provide expert insights, making it easier for investors to make informed decisions.
Time-Saving: Doing thorough stock research can be time-consuming. These services save time by providing ready-to-use investment suggestions.
Educational Resources: Many services offer educational content that can help investors learn more about the stock market, investment strategies, and financial analysis.
Diversification: Good stock picking services offer recommendations across various sectors and industries, helping investors diversify their portfolios.
Access to Specialized Knowledge: These services often have access to sophisticated tools and data that individual investors may not have, providing an edge in the market.
Risk Management: Some services provide guidance on managing risk, including how to diversify and when to exit positions.
Performance Tracking: Many stock picking services offer tools to track the performance of their recommendations, making it easier for investors to evaluate their investment choices.
Community and Support: Some services create a community of investors where ideas and strategies can be shared, offering support and a sense of belonging.
Our Review Methodology
Investing in the right financial products is crucial for achieving your financial goals. That’s why our review methodology is designed to give you a comprehensive understanding of various investing platforms and tools. Here’s a breakdown of what we focus on:
Tools and Features
We dig deep into the suite of tools that each platform offers. Whether it’s automated investment features, tax optimization, or specialized charting tools, we evaluate how these features contribute to smarter investing decisions. We ask questions like:
What is its main offering, and how does it compare to its peers?
How effective are the risk assessment tools?
Are there any value-added services like educational content?
Price and Value
Price matters, especially when it comes to investing, where every penny counts. We analyze:
Subscription fees
Hidden Charges
Price compared to the overall value received
We’ll let you know if the platform gives you the most bang for your buck.
Ease of Use
User experience can make or break an investment platform. We assess:
Interface Design – Is it intuitive and easy to use?
Mobile app availability and functionality
Customer Support – where applicable.
Nobody wants to navigate a clunky interface when dealing with their hard-earned money.
Stock Breakdown
Good investing is rooted in great research. We examine:
The quality of stock analysis tools
Returns on an absolute and comparative basis
Availability of real-time data
Depth of research
We check if the platform provides actionable insights to make informed decisions.
How We Do It
Hands-On Testing: I signed up for Mindful Trader to provide real insight. This is how I give my unique perspective. We’re unlike some other sites where they simply rehash marketing materials.
Customer Reviews: What are other users saying? We look at reviews and customer feedback to gauge public opinion.
Comparative Analysis: Finally, we compare each platform against competitors regarding features, pricing, and user experience.
Arrived Homes is a real estate investing platform that lets you buy fractional shares in long-term and vacation rental properties with a low minimum investment.
Quick Summary:
Arrived Homes is a long-term rental and vacation real estate crowdfunding platform that allows non-accredited investors to invest passively in real estate for just $100.
Overall Rating:
Property Quality:
Tools & Features:
Ease of Use:
Price:
Best For:
Buy and hold investors
PROS
Low $100 min investment
Taxed as a REIT
Recreates economics of traditional property ownership
CONS
No dividend reinvestment features
Non-recourse loans tend to have higher interest rates on properties that have financing.
Returns: 2.4% – 8% in annual dividends (historical)
Sourcing Fee: 3 – 6% of property purchase price
Asset Management Fee: 1% of rental income
Account Types: Individual Accounts, LLCs, Trusts, Corporations, Self-directed IRAs, and solo 401(ks) (partners with Rocket Dollar)
Dividend Reinvestment? No
Early Redemption Features: Pending Regulatory Approval
What is Arrived Homes?
Arrived Homes is a real estate crowdfunding platform that enables individuals to invest in shares of long-term rental and vacation properties while passively earning income from rent and potential property appreciation.
This real estate investing platform is backed by serious players in the Venture Capital world, including funding from Jeff Bezos’s VC arm, Bezos Expeditions.
The company was founded in 2019 by tech veterans Ryan Frazier, who is also the CEO, Kenny Cason, and Alejandro Chouza.
Since its inception, Arrived has funded over $65 million worth of transactions across over 185 properties.
Arrived Homes is headquartered in Seattle, Washington.
How Does Arrived Homes Work?
Arrived homes allows individuals to buy shares in single-family long-term rental and vacation homes owned and entirely managed by Arrived.
Instead of buying an entire rental property, investors can buy fractionalized shares of an investment property and receive a pro-rata portion of rental income and potential property appreciation, less expenses, and fees.
Arrived takes full operating responsibility for the rental property, including finding and vetting renters, dealing with maintenance, repairs, payment collection, and any ad-hoc tenant requests or concerns.
Arrived also budgets for ongoing operating expenses, both planned and unplanned. They maintain a cash buffer equivalent to approximately 2% of the property value that can be used for an unexpected tenant vacancy or expense.
In addition, Arrived Homes also budgets for expenses like property tax, insurance, and maintenance. Expected dividends are quoted net of operating expenses.
Who Should Invest With Arrived Homes?
Arrived homes is good for…
Investors who want to dabble in real estate investing without committing large amounts of capital.
Portfolio diversification
Arrived homes is not good for…
Investors who cannot commit to locking up their money for 5 – 7 years
Investment Options
Arrived Homes offers a wide range of long-term rental and vacation properties across the United States while targeting a 5 -7-year holding period.
Through the Arrived Marketplace, you can filter and sort properties based on property location, neighborhood quality, long-term rental vs. vacation rental, return type, amount of leverage used, and much more.
1) Filter and find real estate investments that suit your goals
Property Location
Neighborhood Quality
Long-Term vs. Vacation Rental
Return Type (Appreciation, Balanced, Dividend Focused)
Leverage (None, Low, Medium, High)
2) Once you find a property that piques your interest, you can view a detailed property analysis.
The research includes helpful information like targeted and historical returns for that market, property location, images of the actual property, and offering details, including the purchase price and associated fees.
Arrived does not list information serious real estate investors would be interested in reviewing, like the purchase agreement, inspection report, and appraisal. Hopefully, Arrived Homes will add these details in the future.
Partial Property Ownership Explained
When you purchase shares in an Arrived home offering, you buy ownership in a Series LLC that owns the home.
The LLC protects shareholders from personal liability and allows the investment to be taxed as a REIT, which provides valuable tax benefits for investors. Furthermore, the LLC structure allows Arrived to fractionalize the homes into shares for investing.
Partial Ownership Example If you purchase 1% of the shares in a single home offering, you are entitled to 1% of any quarterly dividend distributions and 1% of any increase in the price per share or proceeds when the property is sold.
Arrived Homes manages all aspects of property management, while investors have no operational responsibility.
The Arrived Homes business model recreates the economics of traditional home ownership without the hassle.
Fees
There are no fees to open an account or other recurring fees; you only incur costs once you invest. Arrived charges main 2 types of fees: a sourcing fee and an asset management fee, plus some ongoing fees.
Sourcing Fee
A one-time fee is charged to investors to help cover the work required to source properties and holding costs incurred while preparing a property for investors. I reviewed a handful of properties, and the sourcing fee ranges from 3% – 6% of the purchase price.
The sourcing fee for each property is listed in the offering details section of each property page.
Meanwhile, other arrived homes reviews did not mention this, but the service fee is reasonable. Another rental investing platform, Here.co, charges up to a 16% sourcing fee.
Asset Management Fee
1% paid quarterly out of rental income to investors. The 1% asset management fee is on par with other real estate crowdfunding platforms like Fundrise.
Property Management Fee
8% of rental income. The property manager does not collect a fee if the property is not rented. Standard property management fees range between 8% – 12% for individual properties, so I thought Arrived would have been able to negotiate a lower management fee due to the volume of properties they manage.
Disposition Fee
If a property is sold, investors will pay a disposition fee of 6-7% of the sale price. The disposition fee covers brokerage commissions, title escrow, and closing costs.
Redemption Options
Real estate, in general, is considered a long-term investment, and Arrived Homes is no exception.
While the company targets a 5 – 7-year holding period, Arrived has plans to offer a redemption program, pending regulatory approval.
If approved, investors can liquidate their shares every quarter if held for at least 6 months.
But it’s important to note that share redemptions may be subject to early redemption fees, and Arrived does not guarantee that redemptions will always be possible. Early redemption fees can significantly eat into potential returns, so I wouldn’t plan on investing without holding until the rental property is sold.
Returns
Since its inception in 2019, Arrived Home investors have earned between 2.4% and 8% in annual dividends, not factoring in any potential property appreciation.
All open investments will list their anticipated returns on the offering details page, and all anticipated dividends are quoted after operating expenses.
Because Arrived Homes are still in its infancy, this real estate investing platform has yet to realize any returns through property sales.
To provide some context, over the last 20 years, single-family homes in the United States have appreciated an average of 3.9% per year.
Many factors determine how much money you can make investing through Arrived Homes. Local market dynamics and general economic conditions weigh significantly on individual property returns.
And while it’s never guaranteed, the historical returns show a 4.7% – 12.8% combined annual return on investment from investing in rental homes.
This potential highlights the unique value-add of single-family homes and a way to add diversification and reduce volatility in your overall investment portfolio.
Opening an Account
Once you find a property that suits your needs, you can open an account in under 4 minutes and start investing.
To open an account, you must be at least 18 years old and a U.S. citizen or resident. But unlike other real estate investing platforms, you don’t need to be an accredited investor with Arrived.
Investments can be made through individual accounts, LLCs, Trusts, and Corporations. Through Arrived’s partnership with Rocket Dollar, you can invest through self-directed IRAs and Solo 401(k)s.
Browse Homes – Investors browse the available Arrived homes open to new investors and already pre-vetted based on their income potential.
Select Shares – Investors determine how much money they want to invest in each home and select shares.
Sign & Invest – Investors review the terms, sign an online contract, and fund the investment by linking their bank account.
Earn Income – Investors sit back and collect their share of net rental income and participate in the property value appreciation.
Best Alternatives
With a minimum investment of just $100 and accessibility to non-accredited investors, the barriers to investing in single-family rentals through Arrived Homes are low. But its limited track record (founded in 2019) could be a reason for apprehension for some potential investors.
Many other real estate crowdfunding platforms offer a wider breadth of investment options with unique and helpful features.
Groundfloor is my favorite real estate crowdfunding platform. Groundfloor provides short-term loans to real estate flippers. With an average loan duration of 10 months and average interest of around 10.8%, coupled with a low $10 minimum investment, it’s a way to get your feet wet in real estate investing without committing for an extended period or a lot of money.
Fundriseis another popular real estate investing platform. One of the oldest online real estate investing platforms around, Fundrise allows you to invest in a wide variety of REITs and Funds with various investment strategies, from Midwest REIT strategies to commercial real estate investments; there is an option for everyone.
Fundrise also has a minimum investment of just $10, but like Arrived, it requires you to lock up your funds for at least 3 – 5 years.
Is Arrived Homes Worth It?
Arrived Homes offers a unique business model, unlike most other real estate crowdfunding platforms.
Because real estate crowdfunding is a great way to invest in real estate without becoming a landlord, with a minimum investment of $100, you can give Arrived Homes a try without putting a substantial amount of your capital at risk while also gaining exposure to an unfamiliar real estate market.
But make no mistake, while Arrived markets itself as a hands-off investing platform, you are paying for that “passivity” in the form of management and service fees.
That said, given its limited operating history, I certainly wouldn’t liquidate my 401K or 403B and invest it in real estate, but if you want to explore other alternative investments as part of your diversification strategy, investing with Arrived Homes is worth a shot.
Fight climate change and earn profits by investing in carbon credits, the innovative market-based solution that rewards businesses for reducing their carbon footprint
In this article, we will talk about how to invest in carbon credits. Diversification and asset allocation, in general, are key components of portfolio theory if you want to become an investor.
Carbon credit investing is becoming increasingly popular.
Carbon credits are tradable permits that allow companies or individuals to offset their carbon emissions by investing in projects that reduce greenhouse gas (GHG) emissions.
Each carbon credit represents one tonne of CO2 or its equivalent GHG emissions that these projects have avoided or reduced.
Carbon credits aim to create a market-based mechanism that incentivizes GHG emissions reductions by allowing organizations or individuals to offset their greenhouse gas emissions while encouraging investment in carbon reduction projects.
From an investing standpoint, Carbon credits are an alternative investment like wineor real estate because of their illiquid nature and hard-to-value asset.
Many countries have adopted the use of carbon credits as a part of their climate policy framework.
What Is Carbon Credit Investing?
Carbon credit investing and trading involves buying and selling credits, stocks, mutual funds, or ETFs that represent a reduction in greenhouse gas emissions.
It can allow investors to support sustainability efforts and earn a profit. There are numerous advantages and risks of investing in carbon credits.
And while the carbon credit market is fairly nascent compared to traditional stock and bonds, it’s an industry that is worth taking a closer look at.
What Are The Advantages?
Investing in carbon credits can have several advantages, including:
Environmental Benefits
Carbon credits represent a reduction in greenhouse gas emissions, which can help mitigate the effects of climate change and global warming. By investing in carbon credits, you are contributing to a more sustainable future.
Potential for financial returns
Carbon credits can be bought and sold in various markets, and their value can fluctuate based on supply and demand. If you invest in carbon offsets or credits that increase in value, you can earn a financial return on your investment.
Portfolio Diversification
Carbon credits provide a unique opportunity to diversify your investment portfolio. Because they are not directly tied to traditional financial markets, they can provide a hedge against market volatility.
What Are The Risks?
While investing in carbon credits or companies that invest in the reduction of carbon credits can provide an opportunity for investors to support sustainability efforts and earn a profit, there are several risks associated with carbon credit investing, including:
Market Risk
The value of carbon credits can be volatile and influenced by various factors like regulatory, market demand, and economic conditions in carbon markets.
Regulatory Risk
The rules and regulations surrounding carbon credit markets can change quickly, making it difficult to predict the future value of credits.
Fraud Risk
The carbon credit market is vulnerable to fraud, including creating fake credits or selling credits that do not actually represent a reduction of Co2.
Reputational Risk
Investing in carbon credits can expose individual companies and investors to reputational risks if they become associated with companies or projects that fail to meet environmental or social standards.
Technology Risk
Carbon credit markets rely on accurate measurement and verification of emissions reductions, which can be challenging and subject to errors or manipulation.
Liquidity Risk
Carbon credit markets can be illiquid, meaning that it may be difficult to find buyers or sellers of credits when needed.
How To Start Investing in Carbon Credits
If you are interested in investing in carbon credits, there are numerous ways to get started.
Ways to invest in Carbon Credits include:
Carbon Capture Stocks
Carbon Credit Mutual Funds
Carbon Credit ETFs
Carbon Credit Futures
Carbon Credit Investment Funds
Carbon Capture Stocks
Carbon capture, utilization, and storage (CCUS) is a technology that captures carbon dioxide (CO2) emissions from industrial processes, power plants, and other sources and stores it in underground geological formations, among other uses.
A few companies are involved in carbon capture technologies, including some publicly traded stocks.
Here are a few examples:
Carbon Credit Mutual Funds
Carbon credit mutual funds are professionally managed investment vehicles that pool money from multiple investors to buy a portfolio of securities, including carbon credits.
The portfolio manager decides which carbon credit projects to invest in and manages the fund’s assets on behalf of the investors.
Carbon Credit ETFs
Another great way to invest in carbon credits is through Carbon credit ETFs (exchange-traded funds) are investment passively-managed products that expose investors to the carbon credit market. These funds invest in companies or projects that generate carbon credits through emission reduction initiatives, like renewable energy projects or energy efficiency programs.
ETFs are similar to mutual funds in that they invest in a basket of assets but are passively managed instead of actively managed like mutual funds.
Carbon Credit Futures
Carbon credit futures are a financial instrument that allows investors to speculate on the future price of carbon credits.
Futures contracts are agreements to buy or sell an underlying asset (in this case, carbon credits) at a specified price and date in the future.
Investing in carbon credit futures involves taking a position on the future price of carbon credits, with the goal of profiting from price fluctuations.
For example, an investor may buy a carbon credit futures contract if they believe that the price of carbon credits will increase in the future. If the price does, the investor can sell the futures contract higher than they paid, realizing a profit.
Investing in carbon credit futures requires specialized knowledge and experience in futures trading and is generally not for beginners.
Carbon Credit Investment Funds
Carbon credit investment funds are investment vehicles that enable investors to invest in a diversified portfolio of carbon credits generated by various emission reduction projects worldwide.
These funds can invest in various projects, like renewable energy, energy efficiency, and carbon capture and storage initiatives.
The primary objective of carbon credit investment funds is to generate a return on investment while supporting sustainable development and helping to reduce greenhouse gas emissions.
These funds typically invest in verified and certified carbon offset projects, which means that the carbon credits they generate are real and can be used to offset carbon emissions.
Carbon credit investment funds can take various forms, such as mutual funds, exchange-traded funds (ETFs), or private equity funds. The investment strategy and portfolio holdings can differ from fund to fund, depending on the fund’s objectives, investment style, and asset allocation strategy.
One advantage of investing in a carbon credit investment fund is that it exposes investors to the growing carbon market, without needing specialized knowledge or resources.
Carbon credit investment funds can also provide diversification benefits to a portfolio and help investors to align their investment goals with their environmental values.
The Bottom Line
Investing in carbon credits can be a way to support and promote carbon reduction efforts while potentially earning a financial return, but it is important to approach it like any other investment; with caution and thorough research.
Frequently Asked Questions
Do you need a lot of money to invest in carbon credits?
The amount of money required to invest in carbon credits can vary widely, depending on a range of factors, including market prices, minimum investment requirements, and the goals of the investor.
Currently, in global carbon markets, the price of carbon credits ranges from a few dollars to several hundred dollars per ton of carbon dioxide equivalent (CO2e).
Secondly, the minimum investment required to participate in carbon credit markets can vary depending on the platform or exchange used. Some platforms may require a minimum investment of several thousand dollars, while others may have no minimum investment requirement.
Finally, the level of investment will also depend on the goals of the investor. If an investor’s goalst the carbon emissions of a small business or personal activities, they may only need to purchase a relatively small number of carbon credits.
However, if an investor is looking to offset the carbon emissions of a large corporation or engage in more significant carbon trading activities, they may need to invest much more.
In this UNest review, we’ll dive into the platform’s offerings, costs, and usability to help you determine if this investment service for your child’s financial future.
Quick Summary:
Unest is a user-friendly investing platform designed to make it easy for parents to save and invest for their child’s future. Using the app, parents can set up a Uniform Gift to Minors Act (UGMA) account and select from various curated portfolios based on their risk tolerance and investment horizon.
Overall Rating:
Investment Options:
Ease-of-Use:
Tools & Features:
Price:
PROS
Gifting feature
Flexible use of funds
Easy-to-use app
CONS
Limited tax benefits
Monthly Fees
May impact future financial aid
Navigating the realm of investing can be a complex endeavor, particularly when considering long-term goals such as funding your child’s future. That’s where Unest comes in.
What is UNest?
Unest is a user-friendly app designed to help parents invest in their children’s future.
The platform aims to simplify the often complicated world of finance and make saving for your child’s education or other future expenses an accessible and straightforward process. Unest does this by offering a tax-advantaged investment account for kids, known as a Uniform Gift to Minors Act (UGMA) account.
UTMA funds refer to money saved or invested within an account established under the Uniform Transfers to Minors Act (UTMA). The UTMA is a law that allows minors to own property such as securities.
When you open a UTMA account, you’re essentially creating a trust fund for a minor where the assets will be managed by a custodian until the minor reaches the age of majority (usually 18 or 21, depending on the state). The assets in a UTMA account can include cash, stocks, bonds, mutual funds, and other types of property.
One of the key aspects of UTMA accounts is that the funds can be used for anything that benefits the child – not just educational expenses. This could be anything from college tuition to buying a car or funding a wedding.
However, once the child reaches the age of majority, they gain full control over the assets in the account. It’s also worth noting that while UTMA accounts do offer some tax benefits, they may not offer the same level of tax advantages as other types of accounts, such as 529 plans, which are specifically designed for education-related expenses.
How Does UNest Work?
UNest Mobile app is easy to use
UNest makes it easy for parents to set up a saving and investment plan for their children. UNest saving and investment accounts are UTMA/UGMA (The Uniform Transfers to Minors Act) custodial accounts. These offer parents the flexibility to use the money they save and invest for all the life stages their child goes through including college savings.
The money saved and invested in a UNest account can be used for education and other important life stages. UNest also includes a simple gifting feature that makes it easy for family and friends to contribute to a child’s UNest account. Parents can also add valuable rewards to their child’s account when they shop with over 150 UNest brand partners.
Opening a UNest account is simple, secure, and takes less than five minutes. You can download the UNest app in the Apple and Google Play Store
Key Features
Unest provides several key features to simplify the process of investing for your child’s future. Here’s a closer look at these features:
UGMA Investment Account
Unest helps you set up a Uniform Gift to Minors Act (UGMA) account for your child. This type of account allows you to invest in a wide variety of assets on behalf of your child, providing more flexibility than other types of child-specific accounts, like 529 Plans which are specifically for education-related expenses.
Automated Tax Advantaged Investing
You can set up automatic monthly contributions to your child’s account. You have the flexibility to choose the amount and can change it at any time.
Gifting
Unest offers a gifting feature where friends and family can contribute to your child’s account. You can share a link with family and friends who want to gift money, which can be particularly useful during birthdays, holidays, or other celebrations.
Once a UNest gift link is received, it can be used anytime to send gift funds by credit/debit card or ACH. Gifts are sent directly into a child’s UNest account.
User-Friendly Mobile App
Unest provides a user-friendly mobile app that allows you to manage your child’s account, adjust contributions, and monitor investment growth from anywhere.
Cash Back Rewards
Unest partners with brands to offer cash rewards back into your child’s account when you shop.
Investment Options
UNest has multiple 8 investment options for all kinds of investors. Its investment options are based on Vanguard ETFs, and some of the portfolio options include a portion of FDIC-insured cash holdings. Through UNest you can change your asset allocation at any time, but be aware that there may be tax implications.
Conservative Portfolio
Invests in Fixed Income and bond ETFs.
Agressive Portfolio
Invest in 100% Equities through Vanguard Equity Index ETFs.
Aged-based Options
[Conservative, Moderate, Aggressive]
Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older. The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.
Socially Responsible Aged Based Options
[Conservative, Moderate, Aggressive]
Three socially responsible age-based options (conservative, moderate, aggressive). Each of these portfolios includes a mix of fixed income and equity investments which shift the investment mix (what’s called rebalancing) from more aggressive to more conservative investments as the child gets older.
The goal is to maximize growth at a young age and gradually reduce risk of volatility in the account as they get closer to the time they gain access to the funds.
UNest Cost
For its services, Unest charges a flat monthly fee of $4.99 per account, or $39.99/year with an annual subscription – a 33% discount.
plus any While there are no additional trading costs or penalties for withdrawals, keep in mind that the money in the UGMA account does need to be used for the benefit of the child, and any earnings may impact the child’s financial aid eligibility when it comes time for college applications.
Who Should use UNest?
UNest is Good For…
Parents Who Want to Start Early: Given the power of compounding, Unest is suitable for parents who want to start investing early for their child’s future.
Those Who Want to Involve Family and Friends: The gifting feature allows family and friends to contribute to the child’s account, which makes Unest a good option for people who want to involve their extended network in saving for the child’s future.
UNest is not Good For…
Those Seeking Specific Tax Advantages: While UGMA accounts do offer some tax benefits, they do not offer the same level of tax advantages that 529 plans or other tax-advantaged accounts do.
Parents Concerned About Financial Aid Impact: The funds in a UGMA account are considered the child’s assets, and this could affect the child’s eligibility for need-based financial aid when it’s time to apply for college.
PROs and CONs Explained
Unest, like any investment platform, has its strengths and areas that may not suit everyone. Here are some pros and cons to consider:
PROS
Simplicity: Unest provides a straightforward and user-friendly platform, making it easy for parents to start investing for their child’s future.
Gifting Feature: Unest allows friends and family to contribute to the child’s account, which can be particularly beneficial during birthdays or holidays.
Investment Options: The platform provides a range of diversified portfolios to choose from, accommodating different risk tolerances and investment horizons.
Flexible Use of Funds: Unlike 529 plans which are specifically for education-related expenses, funds from UGMA accounts can be used for any expenses benefiting the child.
CONS
Fees: Unest charges a flat monthly fee of $3 per account. For those investing smaller amounts, this fee might be proportionally higher than the percentage-based fees charged by some other investment platforms.
Limited Tax Benefits: While UGMA accounts do offer some tax advantages, they may not provide as many tax benefits as other options like 529 plans.
Impact on Financial Aid: The funds in a UGMA account are considered the child’s assets and can affect the child’s eligibility for financial aid when they apply for college.
Alternatives to UNest
If you’re looking for alternatives to Unest for saving and investing for your child’s future, you have several options.
Below are some popular alternatives:
EarlyBird
Overall Rating:
EarlyBirdis a mobile app that allows parents, family, and friends to invest in a child’s future through a UGMA account, similar to Unest. The app also has a feature where gift-givers can record a video message for the child.
Account Type: UGMA
Minimum Investment: $5
Monthly Cost: $2.95/mo for one child $4.95/mo for multiple children
Processing Fee: 2% per gift (charged to the giver)
Backer
Overall Rating:
Backer is a platform that allows you to create a 529 college savings plan, and then provide a unique link to family and friends where they can contribute easily.
Account Type: 529 College Savings Plan
Minimum Investment: $5
Monthly Cost: $5/mo,
Processing Fee: $1.99 (charged to the giver)
Is UNest Worth It?
The value of Unest largely depends on your specific needs and financial goals. If you’re looking for a simple, easy-to-understand platform that enables you to regularly set aside money for your child’s future, Unest offers a straightforward and user-friendly solution. The ability to involve friends and family through the gifting feature also adds a unique element that can help accelerate your savings goals.
However, it’s worth noting that Unest is not the only option for child-specific investment accounts. There are also 529 plans, which are specifically designed for education expenses and offer their own set of tax advantages. Additionally, while Unest’s flat fee structure is simple, it may be more expensive than percentage-based fees for those investing smaller amounts.
529 plans and UTMA accounts both serve to invest for a child’s future, but they differ significantly. 529 plans are specifically for education expenses, remain under the control of the custodian even after the child reaches adulthood, and offer tax-free growth and withdrawals for education expenses.
On the other hand, UTMA accounts can be used for any expense benefiting the child, control transfers to the child at the age of majority, and while they offer some tax advantages, they don’t have the same tax-free benefits as 529 plans.
