The flurry of fintech startups hell-bent on modernizing the financial world may need a reminder that not everyone is savvy about the ins and outs of stock investing.
This month’s New York Tech Meetup brought to the stage a startup trying to address this issue. GoldBean CEO Jane Barratt and chief technology officer Husani Oakley presented their website and software for helping more people understand how they spend money; the site also suggests some investment options when it comes to publicly traded companies. Barratt said GoldBean is an algorithm-driven investment advisor, which uses voluntarily provided data on personal expenditures—also known as consumption data. “You can choose to share your consumption data with us, but it’s not mandatory,” she said.
New York-based GoldBean was one of ten teams to demo this week (see slideshow) in a gallery of ideas that included a brainwave sensor hacked to control a drone and Kinetic, an alum of the R/GA Accelerator.
Barratt and Oakley said they want to show beginners in investing that companies and brands they are familiar with, and may even buy products from, may be potential fits for their portfolios. Of course, there are plenty of websites, apps, and services, such as Yahoo Finance, Bloomberg, Scutify, and StockTwits for watching trends and fluctuations of the market.
GoldBean looks at each user’s consumption data, which is entered using the Intuit application program interface, to determine where they are financially and assess their risk profile, Barratt said. “Our clients can see by category, by time, and by company where they spend their money,” she said. If someone does not qualify to get into the trading scene—they may have too much debt or not enough income—GoldBean can recommend virtual portfolios for them to learn with. The site also offers advice to people who need to be on better fiscal footing before they start investing.
Once GoldBean sees where people spend their money, its software converts merchant codes on credit card purchases into ticker symbols, where applicable, Oakley said. Those publicly traded companies get run through an algorithm that scores them based on the companies’ financial records and performance. Putting in personal financial information is not necessary in order to use GoldBean. “If someone doesn’t share their data, we have a recommendation engine built into the algorithm itself,” he said.
Those recommendations, Oakley said, are drawn from companies suggested to other users with similar profiles.
The advice GoldBean offers ranges from developing budgeting skills to building a portfolio. The site also presents top-performing companies from each user’s spending history that the algorithm quantifies as potentially good investments. “You can explore what people like you also like, what’s popular in the community, or recommendations by themes,” he said.
The trading system is built on top of an API from TradeKing, an online brokerage that is GoldBean’s broker-dealer partner.
Throwing a lot of financial information at a layperson can still lead to confusion, so GoldBean uses plain language, a jargon decoder, and links to free online resources in its learning section, Barratt said. “When you throw out words like indexes and ETFs, beginners shut down,” she said. “If you say Nike and Under Armour, they know what you’re talking about.”
GoldBean is currently in open beta. (See the other companies above.)