Yesterday, April 1st 2018, The Motley Fool unveiled our most daring creation yet: the Heimskingi™ Home Financial Assistant:
Heimskingi™ is the world's first home financial assistant.
As our announcement explained,
[Life is] mostly about investing in yourself by making financial decisions that are right for you.... [But] there isn't enough time in the day to learn the most basic data points about ourselves. We live busy lives and have better things to do than introspection....
Heimskingi™ handles all your financial and personal transactions in one, convenient location. Use Heimskingi™ to view your bank balance, check your portfolio balance, hear about your stock positions, phone a friend, take out a mortgage, and even trade stocks.
Heimskingi's™ intuitive 'Countdown to Retirement' feature tells you exactly how many days you have until you can afford to retire. Just ask "Heimskingi™, how long until I can afford to retire, in days?" Eventually Heimskingi™ will learn when you need to hear this....
Heimskingi's™ always-on technology, powerful Deep Monitoring techniques, and sleek Icelandic form are designed to meet your needs -- not Wall Street's.
Happy April Fools' Day?
As many who had a chance to see the announcement correctly guessed, Heimskingi™ was actually our annual April Fools' Day Joke. ('Heimskingi' itself is an Icelandic word meaning 'Fool'.)
Heimskingi™'s features were equal-parts invasive and predatory. Besides its patented "Always-On Technology®", Heimskingi™ came equipped with fees, fees, fees, everywhere, from its automatic margin program, to "stop-loss overdraft protection" -- all carefully spelled-out in demonic fineprint. A few highlights:
MARGIN ACCOUNTS ARE CHARGED A VARIABLE APR OF 44.82% PLUS LIBOR. PLEASE BEAR IN MIND THAT HEIMSKINGI™ MAY ALTER THE INTEREST RATE FORMULA AT HER DISCRETION BASED ON VARIABLES NO ONE UNDERSTANDS.
A SMALL ONE-TIME FEE OF $35 IS ASSESSED EACH TIME THE STOP-LOSS IS TRIGGERED. AUTOMATIC ENROLLMENT IN STOP-LOSS PROTECTION FEES IS $9.99 PER MONTH.
FEES MAY BE ASSOCIATED WITH ALMOST EVERY HEIMSKINGI™ INTERACTION. THOSE FEES COULD RISE IN THE FUTURE AT THE SOLE DISCRETION OF THE MOTLEY FOOL AND ITS ARTIFICIALLY INTELLIGENT AGENTS.
Kudos to everyone who spotted Heimskingi's™ tricks and traps in all their horrors, including this reader:
You tell all of us to ride out the ups and downs of the market and not to try timing our positions, and yet you offer stop loss protection, again at outrageously expensive fees. It is transparent to me of your profit motivation.... To me, this is pure hypocrisy.
Art mirrors life
Heimskingi's™ hard-to-spot fees may have been a joke, but they point to a real problem: many investors are unaware of how much they're paying for financial services. In fact, surveys suggest that a huge number of Americans saving for retirement -- perhaps half -- don't even know that they're paying any fees on their retirement accounts.
There's nothing inherently wrong with advisors and fund managers charging fees -- they are, after all, providing you with a service. Just make sure you understand how much you're paying so you can determine whether it's a good deal for what you're buying.
For instance, you can find cheap automated index funds that try to match the performance of a group of stocks that charge next-to-nothing. Alternatively, an actively managed mutual fund trying to do better than the market might charge you 0.8% annually. And a typical fee-based financial advisor will run 1% in addition to what you pay for the funds they recommend.
A percentage point or two may not sound like much, but it can add up. Consider a household that saves $250 per month for retirement. (This is a fairly typical amount based on data from the U.S. Bureau of Economic Analysis.)
Assuming those savings are placed in stocks that earn a historical 7% return, those fees add up over time, to perhaps as much as $400,000 over a 46-year career:
Hypothetical account balances given on various fees. Fee averages as of 2016, according to Investment Company Institute. Calculations by author.
This is just one example based on fee averages. Results vary based on the rate you pay, as well as how long you save for retirement, how much you save, your stock-bond mix, and returns.
It is safe to say, though, that fees should be a major consideration for every investor.
For reference, here are the averages for different kinds of funds:
|
Type of Fund |
Asset-Weighted Expense Ratio |
|---|---|
|
Actively managed stock funds |
0.82% |
|
Actively managed bond funds |
0.58% |
|
Target-date funds |
0.51% |
|
Stock index funds |
0.09% |
|
Bond index funds |
0.07% |
DATA SOURCE: INVESTMENT COMPANY INSTITUTE.
Back to the future
The Heimskingi™ smart speaker (and also, we suppose, smart microphone) was fictitious. But that didn't stop us from providing an order and comments page for anyone interested in ordering one. We received delightful responses and feel fortunate to have such creative readers.
And don't worry! All that data hasn't disappeared -- we of course harvested hundreds of responses (well, by hand anyways) to bring you our favorites.
Advice spanned the scientific to the gastronomic and beyond. Also, a lot of people wanted relationship advice from their AI. No comment.
Without further ado, here's what you had to say.
What non-financial abilities would you like your Heimskingi™ to include?
Flower selection for my girlfriend
Feed the cat
Make cappuccino, fold laundry, locate Easter eggs
Name the song stuck in my head based on my poorly singing it
Shake, rattle & roll
Play Monk Chants to calm me when the market is crashing
Integrated espresso maker to make trades faster
Paperweight
Swipe left or right for me on Tinder
A butter churning function would do wonderfully.
Strip kale from the stalk
Track the phases of Jupiter's moons
Utilizing quantum entanglement to mine cryptocurrencies at 100x speed so I can retire sooner
Phoenix handling
Babysitting my Velociraptor
Order Dominos
"Sock-purchasing" feature that, when you purchase stocks, also orders you socks bearing the logo of your new investment
Karaoke? Trapeze? World domination?
Order pizza and beer; provide marital counseling; discipline my children
Teddy bears
Reiki
What is your blood type? (optional)
A plurality of readers (36%) declined to provide their blood-type info. Seems prudent. A significant number of you marked your blood type AAA- (a credit rating) or C++ (a computer language.)
Alert! Alert!
In the security question section, most (but not all?!) readers they weren't robots. There was also one "I don't think so."
Hmm.
Heimskingi security questions.
Any additional comments?
None. Sounds brilliant.
Great item to have on daily basis to stay updated on financial matters.
Actually I am AB Positive [blood type] -- please correct my profile and add AB Positive as a choice.
Concerned I'll make too much money
Really want it to invest in pink sheets as well
Can I pay using FoolCoin?
I would like to know if Heimskingi is currently single and/or interested in dating.
I sure hope a Heimskingi gets my kids on track!
My favorite color pen is purple.
Will this get along with Siri and Alexa?
Since Heimskingi is so capable, I don't really see why she *can't* go back and buy me some Amazon 20 years ago.
Glad to see the Fool beat Facebook to the smart speaker game. [Editor's note: From conception to completion, our annual April Fools' Day joke takes one month to prepare. So Heimskingi's™ data breach was not inspired by Facebook; they merely disrupted us.]
Can I get paid to provide premium private information?
It won't link my Ikea account.
I am looking forward to submitting to the freedom Heimskingi promises.
I love this April Fool's joke! 😄
If you missed the joke yesterday, you can see it by clicking here.
Fool On!
