Sharebuilder Investing: My Review Post-Capital One Merger

Sharebuilder, back in the early 2000s, had a great premise. For a fee of $4 per trade, you could build up an investment position in a stock over time. If you wanted to own, say, $10,000 in Berkshire Hathaway stock, you could launch a plan to buy $500 per month through Sharebuilder for twenty months, and then, you could get there.

At a time when other discount brokerage houses were charging $8-$10 per trade, including Schwab, E-Trade, Fidelity, and TD Ameritrade, Sharebuilder had a clearly defined target market–it provided a lower price for those who wanted to build an investment gradually and wanted to keep fees low.

And being lower cost worked. Rose Blumkin, the founder of the Nebraska Furniture Mart, used to say: “If you charge lower prices, customers will go to the bottom of the river to find you.” It created this unusual circumstance, where, throughout the … Read the rest of this article!