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💸 The reality of free trades

February 04, 2021 Sign up

Happy Thursday to you!  Here are the money topics we'll cover in today's Gist.

  • Family money matters. How to talk to your family about money?
  • The reality of free trades, PFOF. If you don't know what that means, read on.
  • Restricted Stock Units. When should you sell them?


How to talk to your family about money?

Photo by Tyler Nix on Unsplash

Money talk often feels taboo. The closest of friends and family will share the most intimate details of their lives but zilch when it comes to money. 

It turns out that less than 10% of US adult siblings discuss money on a regular basis, according to Ameriprise.  And when they do, the most common topic is how other family members handle their finances (58%).

When you add family dynamics to the mix, emotions can fly high. But what if you have parents who are nearing retirement and you're worried they don't have any money saved? Who will pay for their medical bills? Or worse yet, their funeral costs?

Talking to siblings and other family members about money can be productive, especially if you can start early and do it regularly.  But, how do you break the ice? 

Here are 3 tips from the Finny community.

Start small to get buy-in

Like any other matter, you run the risk of losing focus if you involve too many people too soon.  Start with a sibling or a parent to gauge the temperature and get their buy-in.

Schedule a discussion

Once you're done with initial warm-ups, consider calling a meeting.  If you talk about money only in passing, chances are you won't get much done.  Setting a time and a place in advance will make for a more productive discussion.  And who should call the meeting will matter more than you think. 

Force yourself to listen

Even if you’re the one leading the conversation, don’t do all the talking.  Assume everyone has good intentions and that you’ll all be better off talking about this together.  If a discussion gets unproductive or emotional, table it for another time and tackle the stuff you can deal with that day.

If you can work through the initial awkwardness, regular open and honest talks can strengthen family bonds and give everyone peace of mind!


An investment app doing the right thing

Have you heard the saying, “if you’re not paying for the product, you are the product?”  The last two weeks have shed light on the zero commission model and where everyday investors like us fit in.

The issue at heart is what’s called PFOF or Payment for Order Flow, a practice already banned in places like the UK and Canada. It’s where brokerage firms are compensated to route their customer’s trading orders to certain market makers to execute the trades rather than directly to exchanges.

Because brokers are compensated by market makers, it’s not always clear that the customer is getting the best execution. And that is what creates a potential conflict of interest between the brokerage and the customer. For some brokerages, this conflict of interest is massive based on how much they earn via PFOF.

Other brokers offering no commission fees compensated by PFOF are rethinking their business models. In fact, Public, a free investment app, announced this week they will end the practice and shift to optional tipping instead...

“Trades will remain commission-free and tipping is entirely optional.  Members of the community can freely decide if they’d like to leave a tip to help pay for the cost of executing their trades.  The reality is that there is no such thing as free trades.  Transparency is a core pillar of building trust, and we think it's important that we live up to our name." 

So what does Public offer? 

🧑‍🤝‍🧑 Social investing & sharing.  Follow friends and subject matter experts.  Opt in to see what others invest in, ask questions, and learn about companies from people you trust.  Choose and invest in themes you believe in. 

🛠️ Tools for long-term investors, such as safety labels for riskier investments and long-term portfolios.  Public does not allow day-trading and they do not offer sophisticated trading instruments like margin accounts.

🍕 Fractional shares.  Public slices stocks up into tiny bits, so anyone can own a piece of the companies they believe in. 

Sound intriguing?  Learn more on  They are offering you $10 in your Public account with a deposit of $1 or more.  


When should you sell RSUs?

If you currently hold Restricted Stock Units (RSUs) from work, you may be wondering when you should sell them. Here are some tips from Daria Victorov, a Certified Financial Planner, and Vineet Prasad, an Accredited Financial Counselor, Founder of Savings Academy, and a Coach on Finny.

💡 Taxed when vested. Don’t forget that RSUs are taxable when they vest, even if you don’t sell them!  Make sure your company has withheld taxes on your behalf and that it’s enough to cover your future tax bill.

💡 Consider selling as your RSUs vest. Your income and job stability is tied to your company’s performance.  It’s risky if your financial assets are also heavily tied to your company’s stock price.  Selling your RSUs upon vesting makes sense most of the time, though there are exceptions (e.g., you have more information about your company's financials and think it will perform strongly in the upcoming period).

💡 Manage capital gains. If you sell upon vesting, you’ll face little-to-no capital gains.  But if you wait and the stock price rises, consider waiting at least 366 days to sell so you can benefit from long-term capital gains. If you sell your assets earlier, they will be taxed at a higher rate as short-term capital gains.

💡 Make sure you have an intentional plan for your RSUs.  Employees at companies like Google, Facebook, and Amazon who kept their RSUs have recently benefited tremendously.  But past employees at places like Yahoo, AOL, and Bear Stearns may wish they had sold as they vested.  

For more RSU insights, check out this interview with Daria and Vineet


  • [Finny Learn] What is Risk Tolerance? Take this 5-minute bite-sized, quiz-based lesson to review the basics.
  • [Finny Discussions] Money words of wisdom (one-liners) shared by the Finny community. 
  • [Bloomberg] The world's 60 most innovative economies—per the Bloomberg innovation index
  • [Pillar Life] Speaking of family and money...  A popular choice within the Finny community to organize, store and share your family's most important docs online is through Pillar.  Think digital vault that's shareable!

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