What's up you guys, sasha here i get asked a lot of questions around, which is the best passive investment platform out there. Is it nutmeg? Is it wealthy fire? Is it wealth, simple or is it money farm? All of these companies have become incredibly popular. The market and sustained their customers saying that this is the easy way to do investing. This is the way that you can go and earn money without knowing anything about the market.

You can let their experts, you can let their artificial intelligence and you can let their amazing unique funds. Do all the work for you. You just have to sit back, put your feet up, watch the money grow and then collect the proceeds at the end. Sounds pretty good right so which one out of those would i choose? Well, the answer is none of them.

Let me explain just before i go any further. Let me do a really brief disclaimer. I am not a financial advisor. I can't provide financial advice to you and if you do need financial advice, please make sure you go and seek it from a suitably qualified professional now that that is out the way.

Let me tell you a bit about these platforms. In my personal humble opinion, all of these platforms are a massive waste of money. You can go and invest your money via other ways that can also be completely passive without you having to do anything at all, but more on that later. First, let's talk about their fees.

Now all these companies charge you management fees, for the privilege of being able to invest with them and they're slightly different, but almost exactly the same. Wealthify charges not point six percent per year. Nutmeg charges, not 0.75 percent. Well, simple, not 0.7, a money farm, not 0.68, and then on top of these fees, you also have to pay about 0.2 for the funds that the money is invested in for a total of around about 0.9 per platform.

The worst part is, as your money grows. These fees grow as well, because they are a percentage of the total amount of money managed there isn't actually any extra work to do. There isn't actually anything that they have to pay for and once your money's invested it just sits there and there's funds there isn't any real extra cost, but it's nice to charge people who have more money invested even more in these fees. Isn't it? So if you go and do the basic mass, if you take a basic index like the s p 500 over a long period of time, it's been doing considerably better more recently, but if you average it out over a long period of time, you would probably expect It to earn somewhere between seven and nine percent per year, including all the big down years, and these fees alone are going to be charging about 10 of that money just for the privilege of managing your money.

So, whatever money you get in terms of gains, however, much money grows. You're gon na be paying 10 percent of that ish to those companies unless they do much better than the index. Do they? Let's have a look. First up we have wealthy fire and these guys have data starting from 2017 and if you're, on their most aggressive highest earning adventurous plan, your investments would have earned 5.46 percent per year over this period.

Just so that you can get an understanding. The s p. 500. Grew by about 14 per year during this exact same time frame next up, let's have a look at nutmeg.

Nutmeg has a choice of different risk levels with the highest risk option, delivering a massive 55 return over the last five years. That's an average of just over nine percent versus just fifteen point: eight percent for the s p 500 index over the same period um. You can see the pattern developing here right remember these are the riskiest portfolios that each of these investment platforms offers? If you don't go for the highest risk that they offer, if you go somewhere down the middle, the returns are going to be considerably lower than the ones i'm mentioning i'm giving you the absolute highest that you can earn with each one all right. Next, let's look at wealth, simple, their basic investment package for poor people like you and me who don't have a hundred thousand or more to invest in a complex mix of investments.

This busy package still allows you to invest in methodology, backed by noble prize winning research. Yeah, for some reason they don't even publish the results on their website. It must be so good, but if you go to the help center, if you go to the help center and you dig around and you search eventually, you can get to this page that i found where you can find out that their 90 equity portfolio has returned 25.22, over the last four years - that's 5.8 per year. Now money farm does seem to top the lot.

They have earned a whopping 60.7 return from 2016 to 2020 in their highest risk portfolio - number seven that's 9.9 per year, which is pretty good. It's only about one-third. Actually, just over one-third less than if you just had all your money invested in the s p 500 index before all the fees of course. Now there are many reasons why i don't use any of these platforms and i am a relatively active investor which isn't the kind of approach that most people will take.

I do get it, but let me tell you what i think people should do, and this is not advice. Just my personal opinion. You know just sharing some random guy in the internet's thoughts on this. This is what i think people should do if they want to invest passively and actually earn the sort of revenue the passive income, the passive investments should pay them.

You see, i have a massive problem with the way that these companies talk to their customers and the way they explain their investments. They say that they use artificial intelligence now as a mathematician and somebody's worked in the financial services industry long enough, that is a total load of bs basic algorithms, that just split up people's funds into some number of different types of investments is not the same thing As artificial intelligence, they also say that they have huge teams working and optimizing the investment portfolios between different asset classes, types of companies etc, and yet year after year and decade after decade. Well, these companies haven't been long enough haven't been around long enough for decades a decade but similar companies to them tend to underperform a basic index of the 500 largest companies in the us all the time, and you can go and look at any research. You like to confirm this in from academia down to nasdaq down to standard and poor's themselves, even those people who don't want to go and actively invest their money.

If they don't want to manage their particular investments in different companies, buy and sell them. If they don't feel comfortable about whatever it is so easy these days to go and invest in the s p 500 index, my two favorite indices that i personally have money invested in and that i think, are really great - are two vanguard ones, vusa and v usd If you're in the us, you can use vuvo as well, but in the uk those are not available and you can go and just literally mimic the performance of the 500 largest businesses in the u.s by just putting your money into them. Vusa is in pounds, and that means that your money fluctuates relative to pounds. So if the dollar to a pound exchange rate changes, your investment value might change as well, but it kind of hedges, your currency fluctuation risk or the usd is denominated in dollars.

If you want to make sure that you're as representative of what's actually happening in the us as possible, now both of these funds charge not point not seven percent, which is ten percent of the basic fee that the others charge and actually a lot less than that. If you go and take into account the extra fund fees that they charge as well and they allow you to go and invest automatically into all of these s - p 500 companies for no extra fees whatsoever. Now you can invest in the s p, 500. By opening an account with either trading to one two free trade or etory trading, two on two have right now, as i'm filming.

This suspended new accounts because they've had a flurry of people applying based on what's been happening in investment markets in the last couple weeks. But i imagine that they'll probably reopen relatively soon with free trade. You can go and invest in the pound-based booster completely for free. You can open the account for free.

You can deposit your money for free and you can then go and invest in that fund without paying anything other than that not points not seven percent fund fee, but you're not even going to be paying it. It's just going to be taken out of the proceeds. If you like, for the dollar-based vusd, you will have to pay a 0.5 exchange fee if you're doing it through free trade, but that's a one-off fee. Once you've gone and invested the money, there's no ongoing annual management fee on top, which is where the money can be sucked out of your investments over time by these investment platforms.

Also, if you open an account with free trade, always trade into one two using one of my links in the description below you will actually get a free share just for signing up and making the minimum deposit, which is one or two pounds depending on which platform It is so that already sounds a little bit better than those other platforms. Doesn't it now? Etoro is another really interesting option and, like the other two, the platform actually runs in us dollars rather than pounds, because it's international, that's the choice i've made and that actually has some big advantages, because if you trade, mostly u.s stocks, if you trade, u.s based etfs Or the commodities or other things like that. It means that you don't have the whole exchange rate between the dollar and pound, affecting the value of your investments. In terms of the numbers that you're looking at and the performance figures.

And although that doesn't make absolutely any real difference, it just makes managing those investments, in my opinion, that little bit easier, you have to pay a 1.5 percent fee to load money into etoro. If your money is not already in dollars, although you can go and use revolut or some other services, if you can to not have to pay even that, but once you've loaded your money in all the trades are completely free and you don't have to pay any Kind of management, fees or trade fees, or anything like that. So once your money is in for the 0.5 percent, you can go and invest in the s p, 500, as well, if you like, or anything else completely for free, which is much much better value. So, if you're interested in checking that out make sure you go and check etoro through the link in my description below as well, basically, you can tell that i'm not a huge fan of any of these new fancy investment platforms.

They don't give you any meaningful choice in my opinion, because having a choice of five or seven proprietary funds, where you don't even really know where your money is actually invested in, is not meaningful in any way. In my opinion, and the worst thing is the funds that you get to choose from will considerably underperform a basic index like the s p 500, that i mentioned a few times in this video already, and not only that, but they will charge you expensive fees for The privilege of being able to earn less. I hope you guys found this useful if you have make sure you smash the like button for youtube algorithm. Thank you very much for watching.

I really appreciate anybody who gets this far in a video. Thank you so much and i'll see you guys later. You.