Leverage Lite: Basic Capital’s Play for Retirement Accounts

Wealthtech loves a spectacle

Basic Capital’s debut set the group chat ablaze. Suddenly, everyone’s an Econ 101 expert, yelling about leverage like it’s some brand-new invention. And, I get it, anything that messes with grandma’s 401(k) hits a nerve. But spending all day dunking on a team that’s actually trying something new feels like screaming at clouds.

Let’s talk about what really matters: these folks just crammed four revenue streams into one retirement wrapper. And for a fintech nerd like me, that’s pretty neat.

Here’s the setup

First, they charge a $25/month subscription, billed annually at $300. Next, they tack on a classic robo fee of 0.5% on assets. Then they offer loans at 6.26% interest (actually seems cheap). And the cherry on top? A 5% performance carry on any gains above a set threshold. That last one is bonkers. These guys definitely came from Goldman.

That’s four monetization levers targeting one moderate-income investor. It’s borderline gamer mode and might be the only way consumer wealthtech ever pays its own rent. Trust me… I couldn’t pull it off with my own startup.

Betting on Average

Will a USPS mail carrier or Amazon warehouse manager buy into “leverage lite”? Maybe, maybe not. But at least Basic Capital is shaking up the industry instead of just building another vanilla robo or managed ETF. I’ll be watching from the cheap seats, with a chilled red in hand, ready to cheer when the next cohort data comes out.

If you’re shaping the future of wealthtech, I’d love to hear from you. Drop me a line at [email protected]