âThink and Grow Rich (1937 original Masterpiece Edition) by Napoleon Hill is a book about turning your desires into success, and thus its money equivalent. By researching and speaking with 100s of successful leaders and businessman, Hill collected one of the greatest philosophies on how to turn those desires into money. Now these principles, and this book as a whole, are not just about making money. Likely, there is nothing new in this book which you have not heard of before. However, there are also likely not many books or people who have put together such principles together, in an easy to read and understand format. As Dr. Miller Reese Hutchison, longtime associate of Thomas Edison, states in the foreword, this book should be adopted by all high schools as required reading before graduation. There were so many excellent quotes and nuggets of information, and each chapter provides a good amount of information which you will need to allow to soak in. As Dr. Hutchison also mentions, this is more of a Textbook than a novel, and one of which I will continue to read for years to come.
Think and Grow Rich
For those of you out of the loop, Loyal3 is a trading platform where you can buy and purchase stock. A few features which stood out for Loyal3 versus more well-known brokerages like TD Ameritrade, E*Trade, or even Ally Invest were: the options to buy and sell stocks at no cost, buy fractional shares instead of full shares of stock, and to do so on a monthly basis with as little as $10 per stock! Well sad to say Loyal3 is saying goodbye to all of its faithful investors! So, what do we do now? Well there are a few options you can proceed with, all of which have their own pros and cons: Hold, Transfer, Sell. We will go into details on each option.
Hold on Be Strong!
If you decide to keep the investments you have in your Loyal3 account, then your cash and stock holdings will automatically transfer over to FolioFirst. FolioFirst is a new trading platform, which according to Loyal3 has the following features
Commission-free trading on up to 2,000 trades per month, with over 200 publicly traded stocks and ETFs available to trade! This more than double the number of public stocks available on the Loyal3 platform, which currently has 70. In addition to increasing the number of available stocks to trade, the number of account types is increasing as well. With Loyal3, only individual brokerage accounts were available. With FolioFirst you will now have the option to open Individual Retirement Accounts (IRAs) and Joint Accounts. FolioFirst still provides some of the great benefits Loyal3 did, like the ability to purchase fractional shares, and commission-free trading, however there is one caveat. Although the individual trades themselves do not charge a commission (up to 2000 trades per month), there is a $5 account fee each month, and an annual $25 IRA reporting fee if you choose to open an IRA. Another change, also not a huge deal, is that the minimum purchase for an individual stock is now $25 with FolioFirst instead of $10 with Loyal3. Again, not a huge deal, but if you had monthly plans set to buy multiple stocks per month through Loyal3, then this would increase your minimum in order to keep a similar routine going. If you are an individual who has multiple stocks being purchased each month, one thing you can do is buy them all at once to decrease the minimum required per stock holding! If purchasing at least 10 different stocks at the same time, the minimum purchase per stock drops from $25 to $5. If you choose to go with FolioFirst, your cash and stock will be available on the new platform beginning May 22nd. If do not take any actions to purchase or sale any stock once it is transferred over, a $15 maintenance fee will apply beginning February 1st 2018 in your FolioFirst account.
If youâre a semi-active trader, FolioFirst is still a great option, even coming from Loyal3âs totally free platform, in comparison to other major brokerages. I say semi-active because just like Loyal3, FolioFirst does batch trading which occurs twice daily, which limits the amount of times you can trade one companyâs stock each day. It also limits your ability to control the price at which you buy and sell your stock. This is a great option if you regularly make a few trades per month, like in our Share Repurchase Newsletter. Each month we sell our oldest stock holding (1 trade) and buy a new stock (1 trade). Using a platform like Ally Invest at $5 per trade would cost you $10 each month for your 2 trades, or between $14 to $20 a month in fees with a platform like Fidelity, E*Trade, or Schwab. But, only $5 per month with FolioFirst! If you were to make 2000 individual trades in a month (the max with FolioFirst) with a company like Ally Invest or TD Ameritrade, it would cost you between $10,000 and $20,000 just in fees alone! These are obviously theoretical MAXIMUM numbers which the average investor will not reach, but you get the picture!
Whatâs so great about Fractional Shares? Glad you asked! Letâs say you want to invest $1,000 in Apple ($AAPL) stock, which in the past month peaked at $145.46 per share. With the ability to buy fractional shares, you can invest (not including fees) the full $1,000 in AAPL stock. After making your $1,000 buy, you would then own 6.8747422 shares of AAPL. Without fractional shares, you would only purchase 6 full shares, allowing you to invest just $872.76 of your $1,000 since you canât âaffordâ another full share. Thatâs $127.24 youâre unable to use to invest in AAPL, so you have to either let this cash sit and gain virtually nothing in your brokerage account, when it has the potential to gain value along with the rise (or fall) in Appleâs stock price. This is the case for over 90% of all brokerage accounts, but was not the case for Loyal3 (now FolioFirst). Best of all, if you choose to activate the brokerage features of FolioFirst, you have the option to test out the platform until August 1st 2017 at no charge. The $5 monthly fee is waived!
Transfer: Time to Switch
If you donât like the new changes going on with FolioFirst, you also have the option to transfer your cash and stock to other brokerage funds. To do so you will need to contact your alternate broker to have them send Loyal3 a Transfer Instruction Form (TIF). You have until May 15th to send in this form. One catch with this option is that you CANNOT transfer fractional shares! Referring back to the previous example of owning 6.8747422 shares of Apple stock, the 6 full shares would transfer to your new brokerage account. The remaining fraction is sold, putting $127.24 in back into your bank account. The remaining cash will be transferred to your checking account on May 19th if you have not transferred it yourself by this date. Sticking with FolioFirst will save you the time and energy of filling out forms, as well as allow you to continue to keep those fractional shares invested in the stock market.
There are some positives to transferring to other brokerages. Going to one of the major brokerage firms, like a TD Ameritrade of course, will give you thousands of stocks to choose from, more flexibility in the types of trades you can make, as well as improved user interfaces and trading apps. If you like a full featured trading platform, this would be a good time to make the switch. Another good option, which gives you the best of both worlds: free trading, more features, and ability to trade at specific price points that you choose, would be Robinhood. With Robinhood you have the ability to trade stocks commission-free, select a specific price (Limit Order) for Buying/Selling stock, however you do not have the option to purchase fractional shares. This makes Robinhood a pretty goad alternative for those who enjoy trading at no cost! Robinhood is limited feature wise in comparison to brokerages like Ally Invest, etcâ¦, but allows many features Loyal3 and FolioFirst do not (like Limit and Stop orders). Join Robinhood now and receive One Free Share of Stock!
Sell: I Give Up
Last but not least, you always have the option to sell! Sell all of your stock, the closing of Loyal3 is a sign the market is going to crash! 1999 all over again!!!! Well maybe not, but then again no one saw 1999 coming either. Maybe you can use that cash to pay off some bills, buy yourself or your spouse something nice, or buy yourself some time to think about what's the best route for you to take for your investment preferences and trading style.
There are obvious improvements in trading options, but one blatant difference in going from no fees to some fees, which was the biggest plus to having Loyal3. For more details, be sure to checkout Loyal3âs website, or click here to see Loyal3âs official announcement. What will you do with your Loyal3 account? Will you join FolioFirst if Loyal3 was not previously on your radar? Leave a comment below, and besure to subscribe to the Share Repurchase Newsletter and Blog!
Akeem The Dream
I enjoy discussing and learning about technology, stocks, sports, and beating my wife at Dominoes! As I learn, I love to share with family and friends so that we can share our knowledge. Thanks for being apart of the journey!