May 15th, 2024 paycheck

Created:

I updated the Time: Mastering the Mundane page on the Mastering the Mundane website.

Still recording and editing the audiobook. Iterating on the recording setup has been educational and fun for the most part.

I have my first coaching client coming in, so that’s exciting.

If you’re interested in coaching or bookkeeping and professional organizing, please schedule a call.

Still no consistent revenue from third parties, and in a decent financial position.

Closing M1 Finance account

Section titled Closing M1 Finance account

For the last year or so, I’ve been waiting for the value in my M1 Finance account to reach an all-time high before closing it out.

Yesterday, I was notified M1 Plus (their subscription offering) is going away.

No big deal. I don’t use M1 Plus.

As I continued reading the message, I realized it wasn’t that M1 Plus was going away; it was that people who didn’t borrow money and had less than 10,000 USD in assets on the platform were being opted into being charged 3 USD a month.

(I’m pretty sure this means if you don’t have cash, they sell your stuff for you. Normal in the grand scheme because internal expense ratios are a thing. But, paying a monthly fee, plus the internal expense ratios of the funds I’m investing in, seems a bit much, especially when it’s because I didn’t get a loan or have a portfolio valued over 10,000 USD.)

Literally as of yesterday (see M1 Finance message).

It’s not so much the 3 USD. It’s the approach to messaging.

I don’t recall receiving what I’d consider a fair warning, but I might have just missed it. It could have been something like: Hey! May 15th is coming. If you don’t have a loan or 10,000 USD worth with us, we’ll start charging you a 3 USD account fee every month.

Most financial institutions I know have a “dormant” or “inactive” account fee. It’s there in part due to legal compliance. If the account is dormant (as defined by the State), those funds get turned over to the State Treasurer, and you can research to see if there are “unclaimed funds” in your name. The financial institution starts feeing the account, which could spark off all sorts of notices: automatically generated letters, paper statements, and low-balance warnings to try and get your attention before turning over whatever doesn’t get feed out of existence to the State.

From an operating cost perspective, this also makes sense because the incremental cost of an account is not zero. There’s bookkeeping and accounting, storage, data retention, and so on.

That said, M1 Finance isn’t a financial institution, to the best of my knowledge, so it’s not bound by this compliance issue. However, even if it is, that’s not my criticism and concern; it’s the game mechanics.

If you want to avoid the fee:

  1. Get a loan (interest working against you).
  2. Have an account with a 10,000 USD or more value (poor people, am I right).

When I worked at the credit union, the mission statement was (something like): To become the financial institution of choice for members in the communities we serve.

When we talked about it (yes, that was a conversation), it was made clear that most people have more than one financial institution they do business with, and that’s okay. Further, we had a specific group of people we could (legally) serve. Finally, we had game mechanics that would incentivize contribution and give privileges to those who contributed more.

That said, we didn’t penalize someone for existing with a “low” balance in their account.

If you had a checking account with a few monthly transactions, you chose us. If you had direct deposit, you chose us. There were also some balance-based perks. These included a free cashier’s check once a month if you maintained an average daily balance of 300 USD a month.

When the credit union decided to introduce these changes, members had a solid 3 months and multiple messages to put their affairs with the credit union in order. Some people closed their accounts. Other people decided to split their direct deposit between the credit union and their actual institution of choice. Nothing changed for those of us who already used the credit union as our institution of choice.

This move by M1 doesn’t seem to be in that spirit.

I started my account there because it appeared like they were going with the subscription model with M1 Plus and issuing a credit card. It was also an experiment in what was out there.

Cool. Perfectly normal, perfectly healthy.

Then they started offering margin trading and cryptocurrency, and I learned about the whole payment for order flow model. They also default to a single trading window and don’t have a way to place limit orders.

That’s when I decided I’d close my account…eventually.

The marketing language around why the single trading window was to minimize “day trading” on the platform. I’m down for that.

Unfortunately, the payment for order flow model as a mechanic means that, as a business, you’d want people trading, even if they took out a loan, purchased unregulated (or under-regulated) assets, or something similar to do it.

For me, “eventually” became today. It just so happens the account was also at an all-time high.

Shifting away from Wave

Section titled Shifting away from Wave

I’ll be shifting away from Wave for my accounting software as well.

I still would recommend Wave to folks, but they’ve also made some choices recently.

  1. They doubled their flat rate on credit card transactions from 15 cents to 30 cents; it’s not the amount, it’s the rollout and the fact it’s double. (The paid tier doesn’t pay the transaction fee—poor people, am I right?)
  2. They introduced a paid tier (which is perfectly normal). Unfortunately, it removed many of the features you once got for free (poor people, am I right?).
  3. The paid tier isn’t based on the root account but on the individual business within each account. So, if you have 5 businesses, you’re paying 80 USD a month for things like account syncing, or (on the plus side) you only pay for the businesses that need it.
  4. A message included the words, “Since I joined, I wanted to make Wave profitable.”

These changes were also introduced without what I’d consider fair warning.

Don’t get me wrong, I’m pretty big on the physical reality behind it: If there’s no margin, there’s no mission. In other words, you will starve to death eventually if you’re not profitable.

That said, how you decide on changes to make and communicate the intent behind those changes also matters. Finally, how you roll out those changes matters.

It often feels like software companies create something “for the masses” to “democratize [some industry]” only to start becoming the thing they claimed to be fighting against, the thing they were trying to disrupt.

The rallying cry is to fight against “the System” while slowly becoming “the System.”

Regardless, I’m starting to feel wedged out a bit regarding Wave. They let me into the club. Now they want me to bring my own drinks, hand them the bottles, and then pay them to serve me those bottles.

So, I’m in the market for a replacement again. As of today, I’ll be making my own.