Saturday, September 12, 2015

NEW Loyal 3 Account !!

Now that larger investors like banks and investing companies are investing in peer-to-peer (P2P) lending, it appears to be losing its luster among us small time investors.  Like everything else in this world, money talks.  Because larger investors can throw huge chunks at P2P notes, my guess is that they are given priority over the smaller investors.  When we first started investing in P2P over 2 years ago, granted there weren't as many notes, it seemed easier to find notes that met our investing criteria.  In both Prosper and Lending Club, it has been our recent experience that good quality notes are now harder to find these days!!

Investing in P2P notes was a way we were diversifying our money.  Rather than put everything in the market, we found some peace knowing that our money was placed in different pots.  Although we still have roughly $18K total investing in P2P notes, we are looking to slowly move some of that money out of the P2P accounts (Prosper and Lending Club) since we feel that too much of our money remains idle each month and not working for us. After looking around, we have decided to open a Loyal3 account and slowly funnel idle cash from our P2P accounts to build a portfolio in Loyal3.

Loyal3 Account Snapshot:
To get our feet wet, we recently invested $100 into three companies (FTR, DIS, WMT).  Also, since we were investing $25 to purchase P2P notes, we decided to keep things familiar and invest in increments of $25.  Below is a quick snapshot of our account.  As you can see, we are up 2.08%. Yay!! 

About Loyal3:

Launched in 2013, Loyal3 provides an entirely new model of investing.While the site doesn’t cater to experienced traders with sophisticated tools and expert advice, it does hope to make the stock market accessible to the general public via an easy-to-use platform. With Loyal3, all trades are completely free – no commissions, no fees. All customers are automatically enrolled in its DRIP program.

  • Loyal3’s corporate partners agree to use it as a go-between for direct-purchase to individual investors. In exchange, these companies pay all transaction fees and pass extra on to Loyal3 for each investor they sign up. Though most companies have had direct-purchase options for years, Loyal3 allows investors to put as little as $10 into whole or fractional shares of stock, or as little as $100 in an IPO. For stock IPOs, you do need a minimum $350 account balance.
Because it needs to have an agreement with each company, its offerings are limited. At this time, Loyal 3 offers only stocks, no mutual funds, bonds, etc. This obviously makes it harder for investors to create a truly diversified portfolio. And while the platform (just pick from a page’s worth of brand logos, select your investment amount, and confirm) is incredibly easy, the site offers a limited set of educational content. One still needs to rely on another site to fully research a particular stock. No advance purchasing options like limit orders, options, etc.  

  • Active, experience investors are generally less interested in Loyal3, but they are not the target market.  Then again, inexperienced investors could benefit from the educational resources and broker access offered by other sites. All things considered, we still think Loyal3 might still be a good, temporary introduction to the stock market, before moving on to a more traditional broker.  Or in our case, to invest small amounts of money into the market, and avoid paying a commission, which would otherwise have a significant impact on the cost basis. 

Quick Facts:
  • Minimum initial deposit: $0
  • Stock Trades: $0
  • You can place a one-time order or schedule monthly investments.
  • You can buy factional shares.
  • Currently, you can invest a maximum of $20,000 per stock, per month with a $10,000 maximum per transaction.
  • Must sign up with a valid bank account, investing through credit card no longer permitted.
  • Mobile access (Apple iOS support for iPhone and iPad. Android is currently planned for in the future).
  • No Check Writing or Debit Card.
  • No advance purchase options.
  • No broker-assisted orders.
  • Loyal3 does not have physical locations or provide advice. This is a trading account for those who want to make their own investment decisions.
  • Obviously, since you are purchasing stocks there’s no guaranteed return and your investments are NOT FDIC insured.

Do you use Loyal3? Please share your opinions in the comments section.


  1. Yay on Loyal3!! I love my Loyal3 Account, even if its got a very minimum balance right now. Its so easy to just toss a little cash, and acquire fractional shares with no commission...

    Love hearing about the progress, and seeing what you are up! Keep up the good work! Cheers!

    1. I agree Andy, definitely a great way to build a portfolio through small purchases. Ten dollars here, twenty dollars there, slowly but surely the passive income will still grow nicely over time. Glad to hear we are in good company.

      Thanks for following us on our journey. Regards. AFFJ

  2. Glad to see you on board. Although Loyal3 is not FDIC insured it is SIPC insured which protects up to 500k and 250k cash.

    I love Loyal3. I've been buying UL on a weekly basis lately. I bought $30 last week and this week UL+WMT paid me $ I bought $10 of UL. Every bit counts especially when there is no trading fees. =)

    1. Thanks for the clarification BDI. I wasn't sure if it was SIPC so didn't want to mention that in my post. Great to here so many people out there are using it and seem to have many good things to say.

      Awesome to hear your dividends were immediately put to work with a new purchase of UL. Keep that compounding effect going!

      Best wishes. AFFJ

  3. AFFJ,

    Nice, nice. Any feedback on dividend reinvestment? Are you allowed to do this?


    1. Sorry for the late reply. Looks like Reno Ryan has already answered these questions for you. @Reno Ryan - thanks. Still just getting my feet wet so I am hoping to learn as I go myself. :)


  4. If I was just starting out today I would open a Loyal3 account. It's quite popular among the DGI bloggers and for good reason. $0 commish and being able to buy quite a few solid dividend payers makes this a great place to start investing and get your feet wet. Thanks for sharing.

    1. Total agree...great place to start for beginners. But I would have to say that its not a bad place to more seasoned investors to buy up certain stocks with little cash and no commission. Maybe slowly build up a position in a company that you might otherwise want to invest a larger chunk of cash. :)

      Regardless, the overall concept of investing as little as $10 with no commission is awesome. Can wait to see more options as Loyal3 becomes more an more maintstream.

      Thanks for stopping by and commenting. AFFJ

  5. @DivDiplomats. I emailed Loyal3 customer service when I first started and only a couple do actual reinvestment. FTR and HNZ are the only ones so far that reinvest divs. Everything else goes straight into cash balance. The dividend received is then used as a discount to your next Loyal3 purchase. Ex: I receive 25 cents from Starbucks from div, then if I am doing a $10 purchase, $9.75 is taken out of my checking for the $10 stock purchase.

    Overall, I love Loyal3 because it has very strong companies.. Brk.B, Goog, Amzn, etc. I have been using for 11 months.


    1. Thanks for clarifying Dividend Diplomats questions so quickly. I appreciate the extra hand. :) It hasn't been that long since we've open our Loyal3 but I must say that so far I really like what I see.

      Thanks for visiting. Best wishes! AFFJ

  6. AFFJ, love reading your blog.. keep up the good work. I unfortunately was not able to invest in P2P investing because I reside in Iowa. But I love the concept.

    -Reno Ryan

    1. Glad to hear you've been following along. Always love hearing feedback from our readers.

      Sorry to P2P is not available in Iowa...although I am not sure I would fully recommend it today as I would have a year or two ago, P2P is merely another basket for our money from this point forward. Nevertheless, hope you get the opportunity to invest in P2P one day so that you can arrive at your own conclusion.

      Until our next post. Cheers! AFFJ

  7. I'm glad to hear you opened an account with Loyal3. I've been using it since the beginning of this year and love the concept. No commissions, the ability to own fractional shares, and the ability to invest with as little as $10 is fantastic. It's a great place for new investors with little capital.

    1. Could agree more! Such a concept and tool that I already have plans to encourage my kids to open an soon as they are old enough to decide for themselves. :)

      Based on our readers feedback, it sounds like we are about 8-9 months behind the curve. :) Glad to be joining the masses finally!

      Cheers to $10 buys with no commission! AFFJ

  8. I use Loyal3 for a few stocks, MCD, WMT, KO. I like the service, although the limitations I see are limited purchase options, slow execution, and no DRIPs. However, since there are no fees as long as a dividend is $10 or more, you could simply buy fractional shares, so I guess DRIPs are sort of covered.

    1. I like all three companies you mentioned. We actually invested $50 into one more company today. We felt Unilever offered a great value at current prices and decided to invest $50 into the company this morning. We know own four companies (DIS, FTR, UL, and WMT) through Loyal3. Loving the concept so far...we are hoping to slowly migrate our idle cash from our P2P accounts into Loyal3 in the coming months.

      Cheers to free trades and fractional shares! AFFJ

  9. If you don't mind me asking, how long did it take you to get back that 2.08%

    1. The 2.08% was a net gain, not a loss. This post is pretty old but my Loyal3 account is is currently up 2.36%. Not very the greatest return but better than a standard bank account. I think the main drawback with Loyal3 is the limited stock selection.

  10. But how long did that take? I'm considering using loyal3 but if that 2.08% took you half a year to make then I'm not sure It's worth it.

  11. Roman - the initial 2.08% didn't take long at all, but since then, the account hasn't made much headway. Since this post, the gains in the account only represent a 2.36% gain. :( but I have to say that each investor will see a different number depending on how much and what they invest in.

    To me, Loyal3 is a decent alternative option to buy and sell stock with no commission, but there are limitations and I certainly wouldn't drop my main broker and use Loyal3 exclusively.

    Thanks for commenting. AFFJ