You are right, but i's a fair question to ask pertaining to any broker. We used Schwab as the primary example because 25 year old life coaches have raised the topic out there and are generating lots of fear so we piggy backed off of it and asked a question everyone ought to ask. What happens if any financial institution I hold money with goes bankrupt?
I ended up at Schwab because they bought out TD Ameritrade in whom I was far happier. I do not like Schwab's rules and how they have handled the Think or Swim app. TD was better IMHO.
Keith is 100% right. Lots of problems with Schwab with my TD Ameritrade account. If it wasn't for the TOS "better than great platform" I would have moved both of my accounts away instead of just one.
I'm in the same boat. Schwab is hot garbage compared to TD. My profit loss numbers in ThinkorSwim don't make any sense and the response time for in the app is atrocious.
I remember watching a bit somewheres that Robinhood kept giving new members free shares of this random small cap biotech company and then charging the company 25 cents per shareholder proxy material they had to deliver, which caused the company to complain to the SEC about the soaring costs of paying Robinhood 25 cents per the enormous influx of new shareholders. Sounds like the plot to a Coen Brothers movie 😂
You really are by far my favorite finance individual. Everything is broken down. It’s very simple. It’s very skeptical. It’s very no nonsense and there’s no fluff. I think every video I’ve seen that you produced. I’ve always learned something. Thank you for what you do.
Thank you for the kind words! It's comments like this that encourage us to keep doing what we're doing. We aim to follow the KISS technique - keep it simple and straightforward. We're glad that shows. :)
I ended up with a Schwab account because USAA dumped me there. I actually like it a lot better. Before that I had Smith Barney. That was No Bueno. Merril Lynch was okay but that was before the internet, and you had to actually call your broker. LOL.
FYI . If you put your money into several banks just remember after 3 to 5 years if there isn't enough activity in the account, the banks can close the account and hand it over to the states unclaimed assets. Then you have to deal with the state to hopefully get your money back. This happened to my father on 2 accounts he forgot he had. With my emergency cash accounts that just sit in different banks and credit unions I set up a reminder to email me twice a year to take $1 dollar out, and them I put that dollar back. This qualifies as activity. Is it necessary? Im not sure but Id rather not find out ...
Joe here. That's a very useful comment. For older relatives that would be a concern (dementia, for example). For overseas and domestic accounts I login once a month (or year) and that seems to suffice. Any account that's paying you interest should be sending tax forms which is a useful reminder to login. Great point, thank you for the comment!
I have my accounts automatically ACH between each other on a monthly basis and that qualifies as "activity". Also works great for meeting the direct deposit minimums to avoid being charged a monthly fee.
Was the question ever answered? I just heard a lot of words without a definite answer, did I miss it? Example: Chapter labeled "Is Schwab safe?" 4:32 to 9:12 - This is a yes or no question without a yes or no.
I have a Schwab account. If I didn't think Schwab was safe, I wouldn't have a Schwab account. We present the facts. You make your own decisions. Joe P.
@@Nanalyze Right on, I also have Schwab and really like it. Was just thinking I missed your answer somehow, but I watched it twice and didn't fine a definite yes or no so figured I missed it and thought I'd ask. Watch all of your videos BTW, great stuff. Thank you for the reply.
Yes we try not to say things like "Schwab is safe" because then when they run into financial trouble we'll hear no end of it. :) Instead, we assumed the worst and then looked at what might happen. Whatever the outcome, investors with assets under certain cutoff points (stated in the video) will be made whole. Another thing to consider that the video mentions is how societal pressures will often force government to step in and make things whole. With such a large number of accounts, Schwab represents a lot of people. Really glad to hear you watch all our videos man! Thank you! That's great to hear :) Joe P.
@@Nanalyze I agreed with the post here that questioned your video. In my opinion, you never answered the question about what happens if Schwab goes bankrupt. I thought your video title makes it sound like this is a video about the consequences for the broad market if a big brokerage firm goes under. You give good basic advice but the title was clickbait for me
“Wall Street is not in the business of making you money it’s in the business of generating transactions” 12:41 . I believe this is why decentralization is so attractive.
Just recognize what a margin account is for - in and out trades and if you want to short stocks. The interest they charge is way too high to hold anything long term on margin. But I do think it's a bit nuts M1 is pushing people to leveraged accounts. That will get people in trouble.
Some a fairly successful retired couple with $2 or $3M basically needs to set up accounts with 5 to 10 different brokerages. What a challenge that would be for tax strategies, RMDs, proper diversification, amongst other issues.
Yes, it does pose some challenges around tax document gathering, required minimum distributions, taking 4% from total assets if you follow the 4% rule, etc. Aggregating your assets in a simple spreadsheet helps a lot.
they wont even disclose why their system was down for 2.5 hours this week . Blaming it on a unknown vendor - how convenient. been with them for many years - no longer
@@Nanalyze other companies have issues to . I tried opening an account with chase this week . Talked with 3 workers at account service center and they could not get an account created for me. They tell me to go to branch to resolve. Sad times in brokerage times
I miss TD Ameritrade. They did great for me all these years. Now I see more than a few videos concerned with Schwab going bankrupt. Makes me feel like I should leave Schwab.
Instant analysts on RU-vid often spout nonsense because there is no barrier to entry these days. What formal source do you have that speculates Schwab is going bancrupt? Haven't seen this but have seen plenty of people spreading rumors.
@@Nanalyze No formal source. So far they seem solvent while making some odd changes to the banking side of their business. I don't care for them as much as TD Ameritrade. I don't see why these videos are even popping up questioning whether Schwab is going bankrupt. I don't see these videos for other brokerage firms like Fidelity or Vanguard. I definitely don't see them for other big banks like Chase. Why are they even being made? Even if wrong, it gives the "If there is smoke, there is fire" feel to Charles Schwab. If they had no problems, no one would be making videos like this one.
"Videos" aren't reliable. What is reliable is the number or morons posting clickbait junk to get attention. I haven't seen any legitimate concerns being raised about the health of Schwab's business but we'll always be keeping an eye out for that. Joe P.
@@Nanalyze I haven't either. I looked at Schwab's fundamentals and they seemed solvent. I tell you, you do hate seeing a brokerage you use even being talked about in the same breath as bankruptcy after you watched the 2008 burn down. Doesn't feel great at all.
I have accounts at the 3 top brokerages. Schwab was my client in the 80s when they had 300 employees. I met chuck, that’s what the company called him. What I don’t like about Schwab. They have been making money sweeping accounts cash every night and make money. If you want the current 5 % on cash these days you have to direct money into an account. The other 2, when I have a settled account it just sits in an account that makes the current 5%.
I’ve talked with several investment advisors and I still don’t use one. I just use my Roth and 401k and I buy bonds. I can’t get I’ve the fees, and paying them to lose money. I want to use a investment advisor, but I just don’t know.
The three fund portfolio approach is extremely simple and effective for those who understandably don't want to navigate the financial advisor minefield: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-1LYR3hD8VFA.html
I'm currently thinking about opening a new account and can't decide between a high fee legacy platform and one of the low fee mobile first platforms. The low fee platforms really lend themselves to my approach when I'm investing small amounts every month.
Charles Schwab is not going bankrupt as the clickbait beckons. This company has over 11 trillion under management including some of my assets. Now all these other online only entities, I would worry about them a smidge.
@@Nanalyze You're right there is no way of knowing for sure, but they're the largest brokerage in the world and there's never been a negative story about Fidelity having any financical problems. I guess I assume they're fine, but who knows Anyway; maybe you could do a follow up video sometime and actually explain what would happen if Schwab or a Fidelity goes bust; both to their clients and to the financial markets. Would they be another Lehman or would it need to be a BOA or bigger?
@@888strummer Trying to anticipate the effects of a large brokerage failure is rather pointless because the financial industry is quite complex. This video looked at failure from the perspective of clients and beyond that would be quite speculative. The interest is noted though.
I've had an M1 account for over three years now. No fees, zero problems, 5% APR on cash accounts. I've had another account in TD Ameritrade, which was bought by Schwab. Not only did Schwab liquidate all my assets during the transfer (which is a taxable event), but I've had to call them multiple times, email them, and upload documents to get my money out. This whole process took over three weeks. Fidelity (much better than Schwab, IMHO) offers the same pie/percentage portfolio option as M1 but for a substantial monthly fee. Finally, M1 offers margin as a sort of a loan for unexpected expenses (instead of selling your positions). It's not the best idea, I agree, but it's better than what most banks will offer.
Things are always working well until they're not. Systemic risk has a habit of blindsiding people. It's hard to see why offering margin to everyone is a good idea.
Hey that's great to hear! To be honest I haven't read the book, just pulled some quotes from it. I suspect it will be good though and fully intent to read it. Joe P.
While the book "Fooled by Randomness" was a long and arduous read/listen, it speaks of some of the same truths you profess! Thanks for your excellent information and commentaries!
@@pastmyprime6330 It was. We talked about societal pressures on government to make things whole that come with being part of a group of 30 million account holders.
Schwab wasn’t user friendly imo. Etrade (Morgan Stanley) seems to work best for me. I did open an account with interactive brokers but never ended up using it. Robinhood was my first “brokerage”. Transferred out of there.. New subscriber. Appreciate your style 🤜🏻🤛🏼
The amount of scams is measured in billions - annually - and an entire company (Chainalysis) has been created around reporting on the illicit activities that happen in the crypto world. Until the trilemma problem gets solved the entire space needs to be treated with extreme caution. The whole "democratizing access to wealth" spiel was a dead giveaway that anything but that is happening in reality. Many don't like when we say that but it's the truth. Joe P.
I have been learning all I can about stock investing this last month or so, and I keep coming back to the same thought. Big money wants me to give them my money and pay me back pennies called dividends. Because of a bad marriage, I'm 61 and just now putting aside to retire when I can't work anymore. I thought stocks were the answer. But , as an example, if I have 10K to invest now, big money will give me about $100 a month back. Sorry but I don't see the point. What am I missing?
It all comes down to whether a person is an investor or a trader and the size of their portfolio. If someone wants to invest under 50K, then M1 is a perfectly good choice. Zero fees and limited trade windows may be helpful remedies for overreacting to every tick or supposed "market crash." If someone has over 1M, Fidelity is a better choice for your peace of mind. IMO, Robinhood (simple, intuitive, and lacking in more advanced tools) is more for beginner traders than investors. Finally, if you found yourself watching and reacting to the latest news daily, then perhaps a sack of gold on the remote island would be more of your thing. 🙂
Retail "traders" have their asses handed to them predictably so that leaves us with discussing investing. Robinhood pushes their customers who they "value so much" to invest in shite so that says a lot about their values. Yep, daily news is just noise. As someone once said, the stock market is just a giant distraction from the business of investing.
Your brokerage assets are protected under rule 15c3-3. All fully paid long securities must be under control or possession. In other words, locked up in a vault for lack of better terms. These shares cannot be lent out, this would cause a segregation violation. These firms are constantly shifted and they test for this.
@@richarddelotto2375 I too can't figure out the shwabb thing, I haven't made a trade dine it changed . I love ameritrade. Is fidelity simular to that? Also how had was it to transfer funds?
Something for you to understand. Shitty little fees are irrelevant. What matters most is the trade execution. If you are buying 5,000 shares of stock, do you care more about the $7 fee or the fact that one platform acquired the stock at $10 per share and another acquired the stock at $10.10. First platform acquired those shares for $50,000. The second platform acquired the shares for $50,500. Saving $7 on stipulated fees when you paid $500 more for the stock is a bad deal. Focus on expert trade execution, not on irrelevant little fees.
Until Vanguard starts dabbling it seems to be speculation. Robinhood makes their money off options and crypto so clearly they're going to push their consumer base towards asset classes that ultimately lose investors' money.
I was with Schwab for less than a year in '22. For active traders their platform is painful to use. I spent many hours on the phone with the children they have in customer service. NO MORE!
You got someone on the phone in customer service? Unheard of these days. :) Customer support is quite important when you need it. That's where IB seems to lack.
I trade options primarily. I make 1-10 trades per day. Schwab has several different platforms (Schwab. Com/edge/central etc) & they all perform different functions so I needed to keep several screens open at the same time & bounce around for different trades. WHY can't you pick a platform you're comfortable with and use only one? I spoke with them several times about this. Their answer was " well when we purchased this company we inherited that platform and this company got us that platform. In other words they purchased a majority of their customers and never consolidated them into their own . There was also an incident where one of my positions closed when it shouldn't have. They sent me an agreement maybe 10 pages long and reimbursed me. It was maybe 9 months of that & I had enough
How about Meet Kevin / House Hacks? Pro tip: Never invest through brokerages that are not insured. And do not exceed the (FDIC or other) insurance limit.
The cash part on Schwab was interesting. If you leave up to $250K cash in your brokerage account, that falls under SIPC and not FDIC?? Hidden diversification tactic unlocked. Possibly.
Good question. To us, that would fall into the "fintech" category that we'd steer clear of. We prefer to use publicly traded firms for brokerage accounts :)
😏-Sooo.....Because we are a data driven economy borrowing large amounts of Yen to purchase stocks, Hedge funds and digital currency is out of the question because it would be detrimental to our fragile economy wouldn't it?
Whether or not retail investors should use an advisor is a different convo really. Using a simple three fund approach you can pay a whole lot less in fees (described here: ru-vid.com/video/%D0%B2%D0%B8%D0%B4%D0%B5%D0%BE-1LYR3hD8VFA.html ). Jones charges, what, like 1%? Then whatever products they push you towards will likely also have fees. They say that fees are the single biggest predictor of performance in the long run. Try to pay as little as possible.
Stopped watching when you called the best performing asset in the last 15 years "Crapto". I'm 54 and will be retiring next year because of "Crapto" lol. Do some research buddy.
If you don't like it when pundits warn people about asset classes with scams measured in billions then Nanalyze probably isn't for you. Thanks for the man bites dog story but crapto has fleeced more retail investors than anything else in recent memory.
That's not something I've heard before since we really keep things tight as it is. Thank you for the feedback and we'll look to continue providing a fire hose of insights as opposed to the rambling talking heads you find on many channels. Joe P.
your brokie is insolvent, then you wait minimum 1 year to solve your reimbursement. for the moment stay away from markets. go for food, cooper, silver gold, cigarettes, or whiskey.
I cant say how but someone very close to be opened his business and within 1.5 years its valued half billion already . It’s easier than one might think 😂. Ofc luck to get into a good business is important
The harder you work, the luckier you get. ;) Creating a business that goes from nothing to half a billion in 1.5 years is extremely tough to do. What you don't see are all the founders who fail to even get off the ground - and there are loads. VCs vet companies for a living and they still lose money on nine out of ten startups. We have a piece coming out Tuesday that touches on this.
