[brianwawok]

I think this is huge. Retirement is totally full of people reaching in for nothing.

It started with "we will manage your money with secret investments, for 2% fee and 20% if we beat a benchmark".

With enough math and science, people moved into index funds. Except index funds through a 401k can easily be 1%+ extra fees. This is an awesome way to avoid that.

The only irony, is that the founder made taskrabbit, which is part of the gig aka no retirement for you economy. Only other people who can afford task rabbit have a 401k, not the actual doers.

[roymurdock]

Seems like the founder is pretty in-tune with macroeconomic trends and is getting out ahead of them to build solid companies in large, no-frills markets.

Steady employment on the decline? Create a marketplace for contractors and odd-job-doers who need to scrape together some rent money.

Retirement plans getting the fat squeezed out of their returns in a ZIRP world? Cut down unnecessary costs that may have been overlooked previously.

[lsiebert]

I am actually becoming a bigger fan of etfs. Generally lower fees, can set a limit instead of buying/selling at end of day blind, and you actually get the dividends from the stocks for a dividend etf.

I am not at all clear why you wouldn't do this if you are just tracking an index.

[brianwawok]

If you are playing for the long haul, limit orders do not matter. Place a buy once per month for 1/12th of your commitment, and forget about it.

For fees sure - see what fees are lowest for you (ETF vs Mutual fund). Last time I did the math for me, mutual funds ended up giving me more money in my pocket at the end of 10 years, because of no trading fees. I think if you reach a certain point in 1 purchase (100k??) ETF wins. Maybe the optimal strategy is to use a mutal fund, then when that fund hits 100k - sell it all off and put in an ETF for a lower yearly fee. Have not done the math when the exact right place to do this is, would be curious. But I know if you are doing small 400-2000 buys per month, ETF fees add up as a % of the price.

For other references on ETF downsides see http://www.investopedia.com/articles/mutualfund/07/etf_downs...

[loeg]

You should not be paying ETF trading fees. And the bid-ask spread is quite small for most popular ones.

[brianwawok]

Where are you getting ETFs with no fee and no rate increase? And how would company offering said investment pay the staff?

[boulos]

Trading Vanguard ETFs in your vanguard brokerage account is free, because the underlying fees go to them.

[loeg]

Both Fidelity and Vanguard brokerages offer a wide selection of ETFs with no trading fees.

What do you mean by rate increases?

Vanguard brokerage is funded by its ETF expense ratios; Fidelity by kickbacks from ETF ER as well as subsidized by other products they sell.

But I'm also confused why you suggest doing 400-2000 buys per month. That seems very high to me for a long-term retirement portfolio.

[lsiebert]

Schwab has a bunch as well, not just schwab based ones.

[ASinclair]

Mutual funds still throw off dividends. It's just common to reinvest them. If you're investing for the long haul then being able to set limit orders isn't really that important. Being able to buy/sell fractional shares is pretty nice.

[brianwawok]

ETFs have Dividends too. Maybe a tiny difference, but not entirely sure. ETF gets prorated divident vs mutual fund is all or none on dividend day?

[loeg]

I don't think there's any inherent difference between ETFs and mutual funds as far as dividends go.

[lsiebert]

No, the main differences are on the upside, with an etf you tend to get a better net expense ratio, and they can help you avoid some cap gain tax because of how they can handle stock exchanges, and on the downside, bid spread when there is low volume, which an bite you in the ass.