Robinhood offering a 3% transfer. What is the disadvantage of this move? I have 80K on Vanguard Target fund 2045. I am sure I am not going to move around in next 5 years. What am I missing?
What do you plan on investing in? I don’t think you can invest in mutual funds at Robinhood, but they have ETFs and stocks. Robinhood has had a number of problems in the past including the app not working every now and then, and Robinhood providing incorrect information on account balances, and other issues.
I personally wouldn’t mess with them and would keep my money at Schwab, Fidelity, or Vanguard. 3% may be tempting, but I still wouldn’t go through the trouble for that.
I am planning to get a mix of ETFs and stocks. 3% ($2400) transfer and 1% match for the contributions. I’ve been using Robinhood for the stock trade but I didn’t have any issues with me. It seems that Vanguard’s target funds are pretty low in return.
Target Date fund returns compared to what? Make sure you’re comparing apples to apples. Target date fund returns will differ depending on which date they are as they get more conservative as they get closer to their date.
In the end, if Robinhood works for you and you get the perks that you outlined, then just make sure there aren’t any hidden fees that could eat up the 1% match. Other than that, go for it.
Tempting, but Robinhood seems sketchy. Not trying to get locked out of my account.
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I forgot about all of those things. I wouldn’t move money to them either.
Ask yourself… “Who’s paying the 3%”?
Or as I like to say… The end user always pays.
I understand the skepticism; how do I pay the 3% at the end?
My bet is higher fees somewhere else.
So what is the difference between target fund vs EFT or stock? All I understand about the target fund is that the funds move around automatically by the reach of the target year.
Not apples to apples. A Target fund is a collection of stuff which includes stock and bond mutual funds or ETF’s. The target fund starts out more aggressive and then gets more conservative as the date of the target gets closer. Many think they get too conservative too quickly, although they are easy in that you don’t have to think about it. You can build your own target date fund by selecting a collection of stock and bond ETFs, mutual funds, and/or stocks to meet your goals and risk tolerance.
The basic difference between a mutual fund and an ETF that has the same stocks in it is you can trade the ETF like a stock where you can’t with a mutual fund. You buy and sell a mutual fund based on the price determined at the end of the day, thus you have less control.
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