Comment by nmhancoc | Hacker News Reader

Comment by nmhancoc | Hacker News Reader

Hey I like this idea, I think the tax management is a nice value add too.

I don’t know why nay-sayers are freaking out about this aside from calling it a checking account. Most HSAs (like Health Equity which I use) have a threshold cash balance (say $500), and then allow you to invest the rest, even in equities. No one seems to yell at them for being irresponsible because a medical emergency may coincide with a market downturn.

Maybe this is inappropriate for a Launch HN, but do you see a path to profitability for this that isn’t based on selling advertising / marketing data? Is there sufficient income or a sufficiently large addressable market here to make this work on just cash management / tax planning?

We haven't really considered the path of selling ads or marketing data. Our current thoughts around business model are closer to Wealthfront (which charges 0.25% of assets under management) or Acorns (which charges up to $5/month for advanced services).

> No one seems to yell at them for being irresponsible because a medical emergency may coincide with a market downturn.

It’s not just coincidence for a checking account, people often need access to cash during market downturns as unemployment generally increases.

Sure, I can see that line of argumentation, but you’re paying a constant opportunity cost for having cash around

In some sense this is a form of self-insurance rather than paying a “premium” in opportunity cost to the bank each month / year.

Also: I know recommending options to novice investors is considered heresy, but in my experience 1 year puts insuring 50 or even 70% of market value via strike price are often considerably less costly than a 6-8% assumed annual opportunity cost between SPX and some 0/1% saving’s account.

Something that’s automated like this could easily just buy puts with a 1 year window on deposit and paired sell them with equities on withdrawal.

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