Investing Platforms

The learning process

When I first started my journey to investing, there was a lot of information there. I was not sure what to do at that time. There are many brokers available for investors to choose and it was a tough choice to choose which one. It was not an easy task back then compared to the current time when I can find lots of useful information on different information sources, podcasts, and youtube videos. So, my only choice at that time is just to start with something and build up my experience along the way. People always advise that you should ask a professional or a mentor for advice but for me, that’s just lazy work. I prefer finding my own solution and learning the process instead of asking for other people’s help first. I probably think this mindset comes as part of my software development habit, where I need to find a solution for a problem before giving up and asking for a senior’s advice.

With that being said, I accept that I will make mistakes, and mistakes are awesome. The trial-and-error method is the best way to learn things in my opinion. It might not be applicable to others, but hear me out. I easily forget things and to this day, I still find myself in trouble when it comes to my short-term memory. Memorizing things is not my style of learning and honestly, I really hate it (even though during my high school back in my country, all I had to do back then was to memorize things and repeat those things to get a high score but eventually I learned nothing at all as I forget all of them). Since then, I have developed my own learning methods that help me now:

Write down things multiple times if I am required to remember things that I must keep for later usage.
Trial-and-error, learn from my mistakes, and keep moving forward.

I told myself to start with something and learn along the way. The mistakes that I made would be useful in the future for helping my friends or family members who wants to join the journey.

My Current Platforms

Raiz

Raiz is the first app that makes me hooked on the investment world. It’s a micro-investing app that allows you to invest frequently in a portfolio of your choice. You can invest any time and with any amount of money that you have. To read more about the app, you can visit their website at https://raizinvest.com.au/blog/how-raiz-works or a short review from this article at choice.com.au.

As a beginner, this app is a good introduction for someone who wants to tip-toe your feet into the financial world. I have learned a lot since I started using Raiz for small investments. There are similar apps, for example, Spaceship, which does pretty much the same but with different portfolios. You will learn most of the basic concepts and knowledge about investing – an ETF, risk management, and many things.

One question people will ask is that “What if they go bankrupt?”. I have seen these questions countless times on Reddit and Raiz has explained them in this article. Raiz uses a Custodian to hold the assets and your assets will be safe even if Raiz is out of business.

To sum up, this platform is:

Easy to use and user-friendly.
A good introduction to investing as you will invest and learn at the same time.
Contribute as small as you can to the portfolio.
Different portfolios that a customer can choose.
The only downside is the maintenance fee but for me, I don’t worry much about this.

At the time this article is made, I have used different brokers for my investment but Raiz still remains in my portfolio. There are two reasons for this:

I don’t want to sell any assets in my Raiz portfolio at this time. I want to accumulate more, and maintenance fee is not so much of my concern. I have read posts on Reddit regarding withdrawing the money out of Raiz and buying ETFs directly instead. The concern is the fee structure after $15,000 will be 0.275%. I don’t see my investment in Raiz will reach $15,000 at least until next year. For that reason, I will keep investing a small amount in this app and keep tracking its performance.
Raiz is all about micro-investing. It does not need much to invest. I want to do my own experiment on this by investing $100/week + any round-ups. The purpose of this is to see how consistently investing a small amount can make a difference in the future. Everyone has been talking about DCA-ing for a long time is the best thing you can do for a retail investor. I want to lead by example so that if my friends or relatives ask, at least I can show them the progress during what period of the market. A solid argument is an argument backed by real evidence and examples.

And thanks to Raiz, I started looking at other platforms that I could use to invest directly in an ETF. The next app that I found out was the Vanguard Personal Investor.

Vanguard Personal Investor (VPI)

I am pretty sure I will get people looking at this post and goes like: “What? You are using VPI?”. I understand that VPI has a different structure compared to other broker platforms but there are things that I like to share about my experience with VPI.

First, why I registered an account at VPI was the time I started researching information about ETF. The subreddit r/fiaustralia is the primary source of information and I was introduced to a website called https://passiveinvestingaustralia.com/. Back then, the recommendation for a beginner who wants to invest is to invest in VDHG ETF because of its simplicity. As the name of the ETF contains Vanguard, I went to their website and started my research. At that time, I have no idea that you can buy ETFs in different brokers at all. This is my first mistake. After I have done my research on the VDHG ETF, I started investing immediately only to be recommended by a co-worker about a different broker (which I will talk about soon).

However, with all being said, my experience with VPI has not been bad at all but there are a couple of things people should be aware of when choosing this platform. I go first with the good sides:

They have just changed their fee structure to a one-time off fee when buying an ETF. $9.00 fee is a fair price, compared to the previous model based on the portfolio amount and they would take a percentage for the maintenance fee. I say this is a good thing.
They generate an annual tax statement for ETFs so that’s another thing to consider.
They have recently introduced a mobile app. It’s a nice addition to the platform to maintain your investment.
The buying process has been smooth so far and I have not experienced any errors.

Now here is the list of things that I gather from other people on Reddit and different forums:

Not CHESS-sponsored. Seems like having CHESS is the safest thing that people would prefer.
No Dividend Reinvestment Plan (DRP) (but since the amount is distributed back to the app, you can use that dividend distribution to buy again in your next buy package).
No Tax prefill on ATO. To be honest, this is the legit reason.

I found this post is a pretty good overview of why people have different perspectives about the VPI platform. There are other platforms that offer lower brokerage fees and CHESS, so why not choose those platforms?

I have asked myself this question lots of times and want to move my VDHG ETF to other platforms. However, there have been no issues so far with VPI, and VDHG is my current main investment so for the time being, I would buy any Vanguard ETF using this account. I might re-consider my choice again in the future, but until then VPI is my main platform for Vanguard products.

If you want to find out more about how Vanguard holds its funds, you can look at this doc from Vanguard.

Selfwealth

It is a popular platform and was recommended by my co-worker. It is also recommended by r/fiaustralia at the Getting Started Guide.

Functionalities are pretty much similar to VPI, but they do provide more things like analysis, comparing portfolios, and so on. The advantage that it has is what Vanguard does not have in the previous section. A $9.50 brokerage fee is fine. I don’t mind too much about these brokerage fees as I often buy in a large monthly lump sum.

I have opened this account and started to buy some of the ETFs. There are 3 reasons that I want to use this account:

I intend to use this account to buy products non-related to Vanguard to easily keep track of different ETFs.
There are times that Selfwealth will allow you to buy ETFs without a brokerage fee. I take advantage of these times and buy a large amount whenever I can. All of the ETFs in the current portfolio are bought during those times.
I also want to do more research on different ETFs and use Selfwealth to keep track instead of using VPI. I might look into trading in the future so having a platform to cover all of this will be a good use.

I have not had any issues so far with the platform. However, there are other broker platforms on the rise with lower brokerage fees and CHESS sponsored. There would be more competitions in the future so I will do more research on different platforms.

Cryptocurrency

It has been quite a journey when choosing a platform to control my portfolio in the cryptocurrency market. I have made lots of mistakes and they are sure costly.

I started to look for a platform where I can buy crypto easily. When searching at that time, CoinSpot was the one on the list so I tried it out. However, after using it for 3 months, 3 reasons make me switch to another platform:

High fee when buying or selling instantly. If you are a trader, this platform would not be a good place to start. I was and am still a semi-trader so it was really bad when my profit was reduced a lot because of fees.
Limited offers on staking or any other products besides buying and selling.
The fee when transferring crypto to a different wallet is random.

CoinSpot is more suitable for people who have just started their own research on the market. The simple UI is the best thing I have seen compared to other platforms. I assume the high fee compensates for the simple UI design.

After that, I found out about Binance from a friend of mine after he started to use the platform. It’s a more complex platform compared to CoinSpot but they offer a variety of products that you can choose from. Staking, NFT, yield farming, saving, and so on. It is not intuitive for a new person but once you get used to it, you won’t change to a different platform. Furthermore, Binance has no longer offered derivatives for Australians, which is a huge deal because it would remove the gambling aspect of the market for Australians. I think this is a yes, and people should only buy spot only.

I have moved all my portfolio on CoinSpot to Binance since then and had not experienced any issues so far. I have also registered different security measures to avoid scams in this market. Anyone who is interested in the crypto market must be extremely careful about who you are talking to. Since it’s a new market and limited regulations, lots of people will take advantage and try to scam new people. Now, Binance is my current choice for managing my crypto portfolio and I keep doing more research to ensure I don’t expose to any risks.

Conclusion

It has been a year since I started to use this setup. I made mistakes and might have missed some opportunities, but I am happy with what I have got so far, and as long as it works, I won’t complain about anything. Please do not use anything I have listed here without any research. What works for me might not work for you. Start with something that you trust and learn from it. Once you know what is missing, I am sure you are more likely to choose platforms that are suitable for your own circumstances. I keep learning and updating more about my current platforms in the future.