Fractional investing opens the door to financial literacy


The ability to get into the stock market has traditionally been viewed as the preserve of what we might call “grown-ups” or professional investors with big salaries and lots of savings to bet on.

It’s a stereotype that DriveWealth quickly turns upside down as he proposes a concept of “integrated finance” that makes building portfolios through fractional investments accessible to the masses. Not only does the company make commerce easy and accessible, it also uses the method as a tool to educate consumers about financial literacy.

“Integrated finance is the ability to work within a financial services ecosystem, such as a digital wallet, and have all of these financial application products available at the blink of an eye,” said the CEO of DriveWealth. Bob cortright in an interview with Karen Webster. “It has disrupted the functioning of markets for a long time, allowing people to invest theoretically with whatever they have in their pocket.”

DriveWealth facilitates integrated finance through an application programming interface (API) -based infrastructure platform that enables its partners to make global stock markets accessible from any application. The company aims to make stocks and stocks as easy to buy as a cup of coffee, and is on a mission to democratize investment opportunities by giving consumers access to U.S. markets with as little as 1 $.

See also: New Funding Brings DriveWealth to $ 2.8 Billion Valuation

“Access to these markets, if you’re outside of the United States, was really only available to the very wealthy,” Cortright said. “It’s expensive, and moving money is also expensive.”

What DriveWealth is disrupting is not so much traditional brokerage houses, but rather the ability to move money affordably and efficiently through new payment mechanisms and enable asset trading with ease. .

“So let’s say you’re in Nigeria and you have bitcoin and you want to buy Nike shares, you can do that just by transferring, selling bitcoin and buying Nike shares,” Cortright explained. . “It doesn’t have to be done in stages; we make it very simple. You have $ 50 of bitcoin and you sell that bitcoin for $ 50 of Nike. “

Integrated finance works in other ways as well. For example, a consumer can go out and buy a pair of Nike sneakers for $ 100 and then receive $ 5 of Nike stock in return.

DriveWealth makes the investment experience less intimidating and thus opens up the market to a much younger population. This is an audience that invests in much smaller amounts with the average trade on the DriveWealth platform being around $ 250. This type of fractional stock trading, as the company calls it, is unlikely to make too many millionaires in the short term. But participants gain experience and, with it, greater financial literacy as they learn from their successes and mistakes.

“People were crying about the GameStop drama and all those kids who were righting their stocks with $ 500,” Cortright said. “It was a good thing because it teaches people where their mistakes were made. It’s much better to have someone make a mistake in their twenties and teach them about the financial markets. So when they are older and start making real money, they have more sophistication when it comes to financial services.

While educating the masses, what DriveWealth is really building is a kind of ecosystem in which stocks become as fungible as money itself. Thanks to the method, it becomes possible to tip a taxi driver with a few dollars in fractional shares, for example. So in that sense it is worth more than money in many ways because it is an ecosystem where assets appreciate as opposed to a trust based ecosystem that does not hold long term value. .

Read also: DriveWealth partners with Plaid for a frictionless investment

Cortright said it’s also a more engaging ecosystem in many ways, as it makes people think much more carefully about the purchases they make. By building a portfolio rather than just managing cash in different accounts, people have a much better perspective on their financial situation.

People need this perspective as well, he argued, noting that financial education in the United States leaves a lot to be desired.

“In the United States, we have this educational system around different successes and all of this wealth, but we don’t teach people about money,” he said. “Split investing is a great way to get people involved, to learn and understand what it means to balance consumption and savings. I really think this is the holy grail solution.



On: Eighty percent of consumers want to use non-traditional payment options like self-service, but only 35 percent were able to use them for their most recent purchases. Today’s Self-Service Shopping Journey, a PYMNTS and Toshiba Collaboration, analyzes more than 2,500 responses to find out how merchants can address availability and perception issues to meet demand for self-service kiosks.


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