More incremental than revolutionary
THEO’s newsletter was interesting the other day. Their number of clients seems to be up roughly 6x on what it was last year, but they still only have just over 13,000.
I’m a big fan of THEO (you can read all the blog posts on them here), for the following reasons:
1. solid product
2. simple interface
3. low(ish) costs -could be lower, but this is Japan 😉
They are a fantastic solution for beginners (and non-beginners) and make it really easy to invest regularly and sensibly (they design and run your portfolio using low-cost ETFs).
Earlier this year they started a new service where they will take a monthly amount from your bank account, eliminating bank transfer fees and making one less thing you need to worry about.
Now it seems they are going to reduce the minimum amount to open an account with them from 100,000 yen to 10,000 yen.
This is good news, and I hope it encourages more people to open THEO accounts.
How about you? Are you one of the 13,189? If not, why not?
The website still shows 100,000 yen, so they don’t appear to have changed things as of yet.
Quick question – do you know if any of the robo-advisor services have English interfaces or websites? My wife is always so busy after being with our kids all day I’m not sure I can get her to sit down and trawl through these kinds of websites and explain the intricacies to me. I can get by in Japanese, but I’d rather be safe than inadvertently over commit or something like that.
Hi Brian
I think it’s something they are announced they will do, but haven’t done it yet. Didn’t see a date on there either.
Apart from Shinsei Bank I don’t know of any financial institutions with English interfaces.
THEO is super-easy though. There are only a couple of things you can do (change your portfolio, put money in, and take money out). Once you set the portfolio up it’s only two things.
I need to set up something like this, as well as J401K. I’ll have to arrange a sit down with the wife and sort it out.
Thanks for the reply, anyway. I really enjoy reading your website, very informative!
Well, you’re in luck as iDeCo (J401k) is also pretty simple.
I’m planning to publish an English-language guide to iDeCo at the end of this month -you might find it useful.
Also happy to answer any questions you might have by email or on the forum 🙂
I don’t use it only because I don’t earn enough to max out my iDeCo and NISA. I assume that I should max out those before using THEO. Though I wonder about that sometimes: yes, with NISA you have the tax saving on capital gains, but THEO – unlike me – actually know what they’re doing when they invest…
Great point, Adam. I would definitely recommend maxing out iDeCo first (as long as it makes sense for you, ie you are planning to stay in Japan).
After that NISA makes sense but THEO might also make sense. I need to follow up with them about tax-loss harvesting.
You’ve inspired me to do a ‘how-to’ post for THEO though 🙂
I like THEO and regularly deposit money into it but like Matsui Shoken’s mutual fund system even more as it’s a lot cheaper and I don’t get charged by my bank for transferring money into the account. The interface is only in Japanese and is far more detailed than THEO but once you get used to it there’s a wealth of info.
http://www.matsui.co.jp/service/fund/?mnu=hd
Hi Sean
Thanks for the recommendation. Is Matsui Shoken different from, say, Rakuten Securities’ mutual funds?
Have you seen the new regular withdrawal function with THEO? You can ask them to take a regular amount from your bank account each month -then you don’t have to pay the fees any more and can forget about your account 🙂
Ben – I’ve never used Rakuten so I don’t know.
The new regular THEO withdrawal feature still isn’t intergraded with Yucho Bank so it’s useless for me. Matsui connects directly to Yucho so transferring funds is easy.
That’s a shame! Hopefully they’ll integrate Yucho soon.
After my iDeCo and NISA I invest any extra money through my stockbroking account with Monex. Although I follow the simple rules of investing in low cost index funds and diversification I don’t really feel like I know what I’m doing. The THEO seems attractive but I’d basically be doing the same thing at a higher cost? Does that seem reasonable to say? To reference your more recent post, I don’t think I’m at the obsessions stage, more crushing self-doubt
Hi John
If you are using iDeCo and NISA you’re already well ahead of the game 🙂
I like THEO because it gives me a lot of diversification without really having to think about it.
However, I think it is also correct to say that I am probably paying too much (1% a year!) for that. I could easily get similar results investing in low-cost index funds (which I also do).
Another thing I like about THEO is the fact that it allows you to invest small amounts regularly, cost-dollar averaging month in, month out.
However, if you are comfortable with what you are doing (doubts aside) then I don’t see many reasons to change.
One of the hardest things for me at the moment is to just stop messing with my plan and allow it to work over time. Impatience is the portfolio-killer!
This is what is currently in my portfolio: https://ibb.co/mKdcP5
Most of it is things I wouldn’t otherwise own. Now, is it more effective than owning something like VT?
I’m not sure.
But it diversifies my holdings a bit, means I don’t have all my money with one provider, and allows me to throw in 40,000 yen a month, which slowly builds up over time 🙂