In this article, I’ll review everything about Mylo, what it is all about and will compare the pros and cons, then will dive deep into the topic.
First of all, what exactly is Mylo? Why do you need it? Whats the use of the app? Let’s get started.
What Is Mylo?
Table of Contents
- 1 What Is Mylo?
- 2 History Of Mylo
- 3 Why Mylo?
- 4 What is the Mylo App all about? How to use it?
- 5 What Is Mylo Roundup?
- 6 Case Study – Example
- 7 Are Mylo Services Free?
- 8 How to Open a Mylo Account?
- 9 Why Does Mylo Charge a Monthly Fee?
- 10 How Do They Invest Your Money
- 11 The 5 Investment Portfolio Types at Mylo:
- 12 Mylo Monthly Charges – Breakdown and Review
- 13 What Is Mylo’s Socially Responsible Investing?
- 14 What is Mylo’s SRI Fund?
- 15 Mylo Case Study: Examples
- 16 What Is Mylo Advantage?
- 17 Is the Mylo App Safe for you?
- 18 Conclusion
- 19 Top 10 Latest & Popular Posts Of 2019
- 20 Mylo
- 21 Pros
- 22 Cons
Mylo is a Canadian app that helps you save and invest. They automatically round up every purchase you make and invest the spare change. There’s no investment knowledge required, and you don’t have to change your lifestyle.
With this app, you turn your spending habits into saving habits.
History Of Mylo
Mylo Financial Technologies Inc. is a Canadian Financial Technology Company that was launched in 2017 by Phil Barrar.
In June 2017, Mylo acquired investment firm Tactex Asset Management and by January 2018, they had secured over $2 million in seed funding from Desjardins Capital, Robert Raich, and Ferst Capital Partners.
The Mylo app is the first automated goal-based savings and investing app to give Canadians the opportunity to easily invest their loose change and grow their wealth.
Recently, in partnership with CanadaHelps, they also launched “Round Up to Give” an automated way to donate to your favourite charity using the app.
Recent stats show that 32% of Canadians between ages 40-64 have nothing saved for retirement. This is indeed alarming! At 64 years of age, you should either be retired or be planning to do so soon.
Simplifying the savings and investing process is what automated savings apps like Mylo will do.
Using Mylo, there will be no drastic changes to your current daily lifestyle, and you do not get into understanding the nitty-gritty details of portfolio management. The app will pretty much take care of where best to invest your money and they are pretty good at doing it.
Simply set a savings goal and the app does the rest by moving small amounts of money – spare change from your bank account into a diversified portfolio that continues to grow and increase your net worth over-time.
In 2018, Wealth simple, which is Canada’s largest robo-advisor, joined Mylo in offering their users an opportunity to invest their spare change automatically. Their own spare-change-savings feature is referred to as “Roundup.”
What is the Mylo App all about? How to use it?
Here’s the thing right – when I first heard of Mylo, my reaction was: “Spare change? How does that work?”
The idea behind Mylo and meeting your financial goals is very simple.
They invest your money through micro investing which is actually pretty smart.
Can you remember how many times you have given up on a savings simply because you felt you could not afford to set aside enough funds?
With automated savings app like Mylo – all it does is to help you save small amounts of money.
That means you do not need to deprive yourself of savings or radically change your current lifestyle. Mylo will simply round up your purchases to the nearest dollar and save the difference – spare amount.
What Is Mylo Roundup?
A roundup is what Mylo call’s the spare change on your credit and debit card transactions.
Automatically investing roundups is an easy way to save, and they add up quickly! Simply link your checking account (funding source) and your debit and credit cards (roundup sources) to your account, and they’ll automate the process for you.
For example, If you spend $3.25 on a coffee using a linked credit or debit card, we’ll automatically round up your purchase to the nearest dollar ($4.00) and put 75 cents aside in your account.
Every week on Monday, they’ll add up all your roundups from the previous week, withdraw the total from your funding source, and invest the money in your investment account.
If you activate the in-app multiplier, you can accelerate your savings by multiplying your roundups by 2X to 10X.
Case Study – Example
Let’s say you buy a cup of coffee at a cost of $1.30 using your debit or credit card.
The app rounds up your purchase to $2.00 and puts the extra 70 cents into your account.
Round up to the nearest dollar value happens throughout the week.
Every Monday, round-ups from the previous week are withdrawn from your checking account and invested into Mylo investment account on your behalf.
The best part is, you can check your investments anytime and withdraw your funds at any time.
In addition to rounding-up savings, you can also accelerate the growth of your investment account to meet your financial goal faster by using:
Recurring Investments: You can choose to deposit a fixed amount every week in addition to the usual roundups.
Roundup Multiplier: You can setup your account to multiply your roundups in multiples of 10.
For example, if you want a 5x multiple on the loose change you invest, a 75 cents savings becomes $3.75 (75 cents x 5).
One-Time Investments: You can make a lump-sum deposit to your account whenever you want to quickly reach your savings goals.
Are Mylo Services Free?
Mylo costs $1 a month and Mylo Advantage costs $3 a month. That’s it. No matter how much you invest. To make investing affordable and accessible to all, Mylo invests in exchange-traded funds (ETFs).
The companies that manage these funds typically charge a Management Expense Ratio (MER) that range from 0.05% to 0.37% for regular portfolios and 0.20% to 0.60% for SRI portfolios. These MERs are among the lowest in the industry.
Mylo does not make any money from MERs and will always invest your money in the most efficient investment vehicles.
How to Open a Mylo Account?
Now let’s talk about opening a new account. The process is pretty easy and straight forward, should take around 5 minutes.
Follow the steps below to open a new Mylo Account:
2. While creating an account, answer few basic questions to build your investor profile and to determine your financial goals and overall risk tolerance
3. Link your bank account to the app – You can link more than one bank here – Example TD and CIBC. One other thing to note – For the same bank, example TD, you can link more than one account type – checking and credit cards
4. That’s it! You are done setting up the account and ready to use Mylo.
Why Does Mylo Charge a Monthly Fee?
Here’s what Mylo has to say about charging a Monthly Free to end-users:
“We Charge a flat monthly technology fee so we can develop Mylo to serve you better.
We never charge hidden fees or surprise costs, unlike other investment services, and we pride ourselves on working hard to keep costs as low as possible”
How Do They Invest Your Money
Every Mylo account out there is managed by a Canadian portfolio manager at Tactex Asset Management, a subsidiary of Mylo Financial Technologies Inc.
So what does the portfolio manager at Mylo actually do? Where does he actually invest you money?
Like I said earlier, Investment accounts opened through Mylo are non-registered by default.
However, they have plans to allow registered plans for your TFSAs and RRSPs in the near future.
At Mylo, the portfolio manager invests your money using a diversified portfolio of low-cost ETFs that is modelled after the Modern Portfolio theory.
The 5 Investment Portfolio Types at Mylo:
Conservative: 100% savings
Conservative-Moderate: 40% savings and 60% Bonds
Moderate: 60% Bonds and 40% Stocks
Moderate-Aggressive: 40% Bonds and 60% Stocks
Aggressive: 20% Bonds and 80% Stocks
Mylo Monthly Charges – Breakdown and Review
In this section let’s take a look if Mylo monthly charges are really worth it and how does it work.
Like I said before, Mylo charges a flat fee of $1 per month to use their financial investment savings platform. Now, this fee is irrespective of the amount of money you have in your account. Be it $100 or $50000; its still going to be a flat fee of $1 per month.
What Is Mylo’s Socially Responsible Investing?
Socially responsible investing (SRI) is the term used to describe investing that supports companies trying to make a positive change in the world. Traditional investing considers factors that have an immediate financial risk, whereas socially responsible investing considers factors related to doing social and environmental good, too.
What is Mylo’s SRI Fund?
The investment objective of the Mylo SRI Fund is to provide long term capital growth by investing in a manner consistent with addressing the world’s major social and environmental challenges such as:
- Climate change
- Gender diversity in the workplace
- Corporate responsibility
- Sustainable development
To achieve this investment objective, the fund will invest primarily in low cost exchange-traded funds (ETFs) and units and/or shares of other investment funds managed by third party managers selected to provide a risk-return profile similar to a well diversified portfolio of Canadian large capitalization equity securities.
The fund may also invest in securities of non-Canadian issuers. These particular investments will generally be no more than 40% of the net assets of the fund and the fund may engage in derivatives transactions to hedge against changes in currency exchange rates.
The fund may hold a portion of its assets in cash, government bonds, short-term debt or money market securities while seeking investment opportunities or for defensive purposes in certain market or economic conditions.
Mylo Case Study: Examples
Let’s dig into the math and how it works out to be:
Case Study 1: Assuming your account grows by about $30 per month (spare change investments).
At the end of the first year,
Total savings for the year: $360 ($30 x 12 months)
Total fees paid to Mylo remains at $1: $12 ($1 x 12 months)
Annual Mylo management fee = 12/360 = 3.33%
Case Study 2: Now let’s assume you invest $300 per month (spare change plus an occasional lump sum or recurring payments).
At the end of the first year,
Total savings for the year: $3,600 ($300 x 12 months)
Total fees paid to Mylo remains at $1: $12 ($1 x 12 months)
Annual Mylo management fee = 12/3,600 = 0.33% of your net assets.
The second case study is better compared to first right.That’s my point here.
What the scenarios above show is that Mylo is great on fees if you plan to use it smartly.
The more you save and invest, the less you pay in fees, because their fees are flat!
However, In addition to the $1 per month charged by Mylo, your investments will also pay for the management fees (MER) to the individual ETFs in your portfolio.
What Is Mylo Advantage?
Mylo’s premier offering is what’s called the “Mylo Advantage”.
It includes all of the standard features – roundups and savings multipliers and in addition the ability to save and invest using tax-free registered accounts similar to the TFSA and RRSP. Remember, the standard account type is non-registered for $1 monthly fees.
Mylo Advantage was launched in December 2018.
In addition to the tax benefits offered by this feature, you’ll also have access to:
Socially responsible investing: you can invest in line with your beliefs
Cash-back earning from your favourite stores, including Amazon, Starbucks, Netflix, Uber, and more
Withdraw funds within 1 business day via free Interac e-transfer
The question now is how much does this premium version of Mylo cost for you.
BTW, Mylo Advantage is the only premium version of Mylo and comes with a $3 monthly fee.
Is the Mylo App Safe for you?
As per the company, they employ the same security and encryption measures that your bank uses.
In addition, they also indicate that your data is never for sale.
What that means is your funds are insured by the Canadian Investor Protection Fund (CIPF) which means that if they go bankrupt, your investments are protected up to $1 million.
The Mylo App is great way to invest effortlessly without having to think or stress about it.
Anyone can benefit from using the app as part of their savings/investing strategy. You’ll never feel stressed about the small change that’ll grow into one big huge lump-sum corpus into investments.
Also, you have the flexibility to withdraw the funds at any point of time. Do remember that the investments grow over a period of time.
The Mylo app is especially great for you if you find it difficult to put down significant sums of money at once to invest or save. The app is easy to use as there are no minimum amounts you can invest, and by actually investing your spare change, you can reach your financial goals without feeling the pinch in your pockets.
Also, no prior Investment knowledge is required on your part given that your portfolio manager does all the asset allocation and re-balancing for you.
Please leave your thoughts and comments below.
Top 10 Latest & Popular Posts Of 2019
- The Mylo App is especially great for you if you find it difficult to put down significant sums of money at once to invest or save
- As per the company, they employ the same security and encryption measures that your bank uses
- No prior Investment knowledge is required on your part given that your portfolio manager does all the asset allocation and re-balancing for you
- Desktop Version could have been better
- Mylo Advantage is the only premium version of Mylo and comes with a $3 monthly fee
- Could have more Investment Portfolios
Hey, I’m Sagar from Toronto, Canada.
I am a self-taught, motivated Canadian Personal Finance Blogger who loves writing articles about Savings, Investing, Stocks & ETF reviews, Side Hustles, Frugal Living, Credit Cards and Retirement Planning. Husband. Father. Software Developer. Web Designer. Hiking Enthusiast.