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Author: sdresser Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 83  
Subject: Folio Fees for the small investor Date: 1/14/2001 12:28 AM
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Does investing 2 or 3 thousand dollars seem to make sense with fee's of almost 300 a year? I really like the concept and would like to try, but would think I would need some nice returns to make it pay. Any thoughts?
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Author: folioman Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 54 of 83
Subject: Re: Folio Fees for the small investor Date: 1/14/2001 6:03 PM
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>>Does investing 2 or 3 thousand dollars seem to make sense with fee's of almost 300 a year?<<

=========

No. You'd have to make 10 to 15% on your money just to break even. However, if you do lots of trades, it could be less expensive than doing that in a regular brokerage account. You do need to be aware that frequent trading could cause wash sales that would have negative tax consequences. In an IRA account, though, capital gains taxes are not a consequence. I'd wait until I could invest at least $6,000 to $10,000 per year before shelling out $295. One advantage, though, to the FOLIOfn approach is that you pay a fee only once on your money. In a fund, you pay a percentage of your balance every year. So, the same money gets charged each year--even if you don't add any more.

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Author: folioman Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 55 of 83
Subject: Re: Folio Fees for the small investor Date: 1/14/2001 6:08 PM
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To clarify, you pay a fee every year on a FOLIOfn account. However, it is the same amount regardless of the balance. With a fund, you pay a percentage of the balance including the same original investment year after year after year. For example, if there is a 1% fee on a fund, you pay 1% the first year, then another 1% on the same money the next year and so forth. After 5 years, you'd have paid 5% on the original year's investment. FOLIOfn's fees don't go up with your balance. So, as your balance increases, your fees fall as a percentage of the balance.

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Author: adamkoehler Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 59 of 83
Subject: Re: Folio Fees for the small investor Date: 3/30/2001 9:49 AM
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I was thinking the same thing but you have to look at it like a cell phone bill or the cable bill. Do you really need cable? No but you have it as a luxury. I was thinking to myself that I can do without some luxury like a cell phone and use the $30 a month to use the Foliofn service. After all does the cell phone company ever make me any money? No! But I can invest in them using Foliofn if I want.

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Author: WrnBuffett Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 65 of 83
Subject: Re: Folio Fees for the small investor Date: 11/20/2003 9:54 PM
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If you go with just one folio instead of three, the cost is less. It's $19.95 per month or $199 per year. There's a number-or-trades limit also. I find one folio to be plenty. Even so, I think you'd want about $25K to do folio(fn).

There's also a "pay-as-you-go" option costing $4.00 per trade. That's per stock not per folio. Good if you don't make many trades.

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Author: lewellen180 Two stars, 250 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 68 of 83
Subject: Re: Folio Fees for the small investor Date: 12/15/2003 11:53 AM
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***
If you go with just one folio instead of three, the cost is less. It's $19.95 per month or $199 per year. There's a number-or-trades limit also. I find one folio to be plenty. Even so, I think you'd want about $25K to do folio(fn).

There's also a "pay-as-you-go" option costing $4.00 per trade. That's per stock not per folio. Good if you don't make many trades.
***

I had switched from BUYandHOLD to FolioFN about a year ago (due to poor service). I really like a lot of Folio's features, including of course the dividend reinvestment and the multiple-folio features; it makes keeping track of things much easier, in my opinion. So, this year at renewal time, I decided to switch to BrownCo.

Why?

Two reasons.

First, and foremost in my thinking, was the fee structure. I had at the time of the switch (still do, for that matter) about $16k invested. $300 per year out of ~$16k is on the order of 1.9% - a heck of a yearly "management" fee. Even if I slimmed down to a single Folio, I'd still be talking on the order of 1% ... and the fees are going up next year. BrownCo costs me $5 a trade, so I'd have to make four (for the 1-folio option) or six trades per month before it made sense to stay with Folio.

Now look at it on the effective-commission side. If I devote about $300 / month to my non-retirement investing, I can also look at the FolioFN fee as the equivalent to a conventional brokerage commission as opposed to a management fee; in that case, I wind up paying 10% (or 5%) brokerage commissions! If my per-trade fee is $5, the commission rate is 1.667%. Much better, if I only trade once per month. I still win if I trade twice per month, albeit 3 1/3% is getting high for my taste.

Second, I find I like buying stocks. I treat (non-retirement) investing as a hobby, which is fine - to a point. The problem is, I find FolioFN to be very seductive ... you know, the "Oh, what a neat idea ... did some research ... yeah, that has real possibilities" method of investing. (Yes, I know, I know; for what it's worth, my day job is a research scientist, so I have some idea what's BS when I read a prospectus for a small research firm, even if it's not precisely my field.) So I found myself with a mess of micro-positions on the order of $50 or $100, as well as some substantially larger positions. Not good; and even worse as the portfolio itself grows large enough to, say, be worth a car or a couple of motorcycles (my other hobby).

The per-trade commission, I find, is making me more honest. I might still trade more than once or twice per month, but I make sure to do it with large enough sums as to make it worthwhile. And it forced me to do some serious housecleaning and thinking. If WhizBangCorp (KAZAP) doubles, great; if it's only 0.6% of my portfolio, I have the same problem as Warren B. trying to improve Berkshire Hathaway's returns ... albeit on a far smaller scale. :-) Bottom line, if I'm not confident enough in KAZAP to invest a significant chunk of my portfolio to it, I won't invest in it at all. And that, really, is the place I want to be, investing-wise.

I have nothing but fond memories and good service of FolioFN; I found their customer service was great and the service itself was pretty neat. It was also a lot of fun ... which was part of my problem, of course.

Of course there's a minimum buy-in of $15k to open a BrownCo account also, so my solution won't work for everyone, especially not new investors. What might work, however, is to start out with a decent index fund, or DSP/DRIP stock, and continue until you have a large enough stake to make a brokerage worth your time and resources.

Good roads,

- Lewellen180

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Author: WrnBuffett Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 70 of 83
Subject: Re: Folio Fees for the small investor Date: 12/19/2003 2:50 AM
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>>>Of course there's a minimum buy-in of $15k to open a BrownCo account <<<

I thought it was 30K. Say, could you find out if they allow all kinds of option trading? I opened an account with Scottrade only the discover that they restrict you from selling puts.

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