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Hey I like this idea, I think the tax management is a nice value add too. I don’t know why nay-sayers are freaking out about this aside from calling it a check

Hey I like this idea, I think the tax management is a nice value add too. I don’t know why nay-sayers are freaking out about this aside from calling it a checking account. Most HSAs (like Health Equity which I use) have a threshold cash balance (say $500), and then allow you to invest the rest, even in equities. No one seems to yell at them for being irresponsible because a medical emergency may coincide with a market downturn. Maybe this is inappropriate for a Launch HN, but do you see a path to profitability for this that isn’t based on selling advertising / marketing data? Is there sufficient income or a sufficiently large addressable market here to make this work on just cash management / tax planning?

naturalauction 5y ago
> No one seems to yell at them for being irresponsible because a medical emergency may coincide with a market downturn. It’s not just coincidence for a checking account, people often need access to cash during market downturns as unemployment generally increases.
- nmhancoc 5y ago
  Sure, I can see that line of argumentation, but you’re paying a constant opportunity cost for having cash around In some sense this is a form of self-insurance rather than paying a “premium” in opportunity cost to the bank each month / year. Also: I know recommending options to novice investors is considered heresy, but in my experience 1 year puts insuring 50 or even 70% of market value via strike price are often considerably less costly than a 6-8% assumed annual opportunity cost between SPX and some 0/1% saving’s account. Something that’s automated like this could easily just buy puts with a 1 year window on deposit and paired sell them with equities on withdrawal.
konne88 5y ago
We haven't really considered the path of selling ads or marketing data. Our current thoughts around business model are closer to Wealthfront (which charges 0.25% of assets under management) or Acorns (which charges up to $5/month for advanced services).

naturalauction 5y ago

> No one seems to yell at them for being irresponsible because a medical emergency may coincide with a market downturn. It’s not just coincidence for a checking account, people often need access to cash during market downturns as unemployment generally increases.

nmhancoc 5y ago
Sure, I can see that line of argumentation, but you’re paying a constant opportunity cost for having cash around In some sense this is a form of self-insurance rather than paying a “premium” in opportunity cost to the bank each month / year. Also: I know recommending options to novice investors is considered heresy, but in my experience 1 year puts insuring 50 or even 70% of market value via strike price are often considerably less costly than a 6-8% assumed annual opportunity cost between SPX and some 0/1% saving’s account. Something that’s automated like this could easily just buy puts with a 1 year window on deposit and paired sell them with equities on withdrawal.

konne88 5y ago

We haven't really considered the path of selling ads or marketing data. Our current thoughts around business model are closer to Wealthfront (which charges 0.25% of assets under management) or Acorns (which charges up to $5/month for advanced services).