Worthy Bonds are a fintech startup that offers you 5% interest by “supporting your fellow humans”. You can invest a little bit at a time, even doing “round-ups” of your purchases. However, whenever you see an interest rate well above FDIC-insured accounts, you have to dig deeper! The basic business model is that Worthy will pay you 5% interest and then take that money to loan out to small business owners (inventory-backed loans) at much higher interest rates, with Worthy keeping any difference as their profit. Here’s why I don’t like that structure. You are buying bonds issued by a single start-up. Worthy Bonds are really just 36-month bonds issued by Worthy Peer Capital, Inc. In other words, it’… [Read More...]

You’ve probably heard of the “4% rule” when withdrawing income from a retirement portfolio. I think using such a rule is fine when you are early in the accumulation phase, although I like the “3% rule” better for early (long) retirements. But heck, reach 25x expenses first and then reassess. However, when it’s actually time to spend down that money, the execution can be tricky. If you start out taking 4% on a $1,000,000 portfolio ($40,000) and then the market drops 50%, will you really take $40,000 (8%) out of your sub-$500,000 portfolio the next year? Being flexible in your withdrawals works better with both theoretical backtests and natural tendencies. If my portfolio drops 50%, I’m going to tighten … [Read More...]

Updated July 2019. Webull has tweaked their referral program again. Short version: Newly referred users now get a free share of stock worth more than twice as much on average than previously (minimum $8 value instead of $3), but you get one share instead of two for opening an account and depositing $100 within 30 days. Full post: Webull is a new brokerage app that has unlimited free stock trades with no platform fees, free real-time quotes, and no minimum balance requirement. (Similar to Robinhood.) Webull also has a referral program where new users can get a free share of stock worth between $8 and $1,000 for opening an account and making a $100 deposit within 30 days. I believe the referring user also gets the exact … [Read More...]