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If you’ve been reading my past articles, you know that automating your savings is one of the easiest and most effective ways to save money to achieve your financial goals.

But with everything, there are so many options and platforms to choose from. That’s why in this article, I will compare the top 2 automatic savings platforms: Mylo and Wealthsimple Invest, perform a cost-comparison, and help you decide which one you should choose!

MYLO:

Mylo is an investing app that automatically rounds up every purchase that you make. I liked to refer to it as the digital piggy bank! You can also make weekly/monthly deposits into your account.

For an example, if you buy a coffee for $4.20, it will automatically send $0.80 directly to your Mylo account.

How it Works:

What’s even better is that Mylo invests your spare change for you. When you sign-up with Mylo, you are asked a series of questions to determine your risk profile, which is basically how much risk you are willing to take. Based on your risk profile, Mylo will invest in ETFs that match the risk you are willing to take.

Recently in 2020, they added a new feature where you can even open a TFSA and RRSP investment account!

Additional Features

What’s even better is that Mylo invests your spare change for you. When you sign-up with Mylo, you are asked a series of questions to determine your risk profile, which is basically how much risk you are willing to take. Based on your risk profile, Mylo will invest in ETFs that match the risk you are willing to take.

Fees:

Mylo costs $1 per month, or $12 per year. So no matter how much money you have invested in, it will only cost you $1 (excluding ETF management fees, which are typically between 0.3%-0.05%). Although this might seem extremely cheap, you never know until you compare it with something else!

Wealthsimple Invest

Wealthsimple Invest is a robo advisor that basically does everything thing that Mylo does (except for the goal feature). Based on your risk profile you are recommended ETFs, it has the round up feature to invest your spare change, you can make automatic deposits, and you can open a TFSA/RRSP.

As a user of both platforms, I honestly prefer the usability of Wealthsimple over Mylo. I find it easier to track my portfolio and see exactly where my money is going.

Fees:

Wealthsimple invest charges a 0.05% management fee based on the amount of money you have invested in the platform.

COST COMPARISON:

Numbers don’t lie! To really decide on which platform is better for you, let’s look at the numbers.

So we know that Mylo is $12 per year no matter how much money you invested. While, with Wealthsimple, the management fee will always be 0.5%.

CASE #1

Let’s take a look at a CASE #1. You invest $100 in both Mylo and Wealthsimple. In this example, the clear winner is Wealthsimple, because you are only paying $0.50, while with Mylo you are still paying $12.

CASE #2

So, how much money do you have to invest to make MYLO worthwhile? Using a quick excel formula, you would need to invest MORE than $2,388 in MYLO to make it worthwhile. As you can see in CASE #2, the management rate are both 0.50% if you invest $2,388.

4. High-interest Savings Account

Did you know that money in your chequing account is actually LOSING money? In Canada, inflation is about 2% per year so all your spare change and money in your chequing account is less valuable by 2% each year.

CONCLUSION

Overall MYLO and Wealthsimple are both great options to automate your savings to achieve your financial goals.

From a pure cost standpoint, you should choose MYLO if you plan to invest more than $2,388 of your money. But if you choose to invest less than $2,388, then Wealthsimple is the way to go.

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