Author Topic: Newly Joined Betterment  (Read 1950 times)

FrenchStache

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Newly Joined Betterment
« on: January 07, 2016, 11:14:15 AM »
Hey guys,

I joined betterment a couple of weeks ago.  I'm curently investing with a financial advisor and trough my work place 401k. I would say I'm investing 70% of my money with  the financial advisor. A quick review of my funds on personal capital revealed mostly high expense ratios across the board, sometimes as high as 1.5%.  After reading quiet a bit through the forums I was thinking into moving towards investing myself directly through vanguard to reduce the fund expenses.  After doing further research and reading the betterment article from MMM I was happy to find their portfolio were mostly built of vanguard funds. I proceeded to open a taxable account which I was able to do in probably 10 minutes on my phone. Depositing money is equally as easy. I'm very impressed with their product so far. I love that you are able to bypass the minimum amount of money vanguard requires to invest with them by going with betterment. There is the small fee that they charge on your account but I believe it to be worth it because if the automatic rebalancing and the tax loss harvesting they provide. I believe they will become my main investment vehicle in the future as I will probably try to reduce the amount I invest with the financial advisor.

If you guys have tips and tricks on using betterment. I would love to hear about them.

Cheers

LordSquidworth

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Re: Newly Joined Betterment
« Reply #1 on: January 08, 2016, 07:32:03 AM »
Advice?

I'd just go straight to vanguard. Peeps like betterment, wealth front etc. are just better at misdirecting how they take your money. Tax loss harvesting is over rated for most people and just used to reel people in. It isn't hard to rebalance in a few minutes at vanguard which won't charge for changing between their funds 

Another Reader

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Re: Newly Joined Betterment
« Reply #2 on: January 08, 2016, 08:09:25 AM »
I like Betterment except when they create taxable gains through rebalancing or selling to raise cash to pay their small fee.  The automatic rebalancing is nice and the value tilt appealed to me.  At this point it's just an experiment for me.

If you prefer Vanguard, you can get around the account minimums by buying the equivalent ETF's.

Dump the FA ASAP.  It's costing you too much money and likely the portfolio is not outperforming the market.

FrenchStache

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Re: Newly Joined Betterment
« Reply #3 on: January 09, 2016, 08:11:46 PM »
Thanks for the feedback guys. I'm going to give betterment a shot this year and see how things go. Im struggling with the financial advisor. It's not very clear where his fees come in to me and on the other hand some the funds are really expensive like 1.6%. I don't think any of them are under 1%.  I feel like I need to concentrate my efforts. I have money going to my Roth 401k, financial advisor and now betterment taxable account. I feel like I should also look into Roth's more. I understand that you can access the money early but it's still a mental block for me. I need to read that Roth pipeline post over and over. I'll try to post a more detail message with my actual monthly investments to get some feedback from you guys.

Richie

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Re: Newly Joined Betterment
« Reply #4 on: January 09, 2016, 09:45:43 PM »
I use Betterment, and love it.  It's true that you can recreate the same experience with Vanguard.  However, I simply do not feel comfortable re-balancing manually.  Yes, I've been told that it isn't particularly challenging.  I just feel more comfortable turning it over to a computer.  In addition, Betterment helps me keep my 40 year outlook in perspective.  I fear that if I were doing this stuff on my own, I would have a difficult time focusing.

In regard to Tax Loss Harvesting, I love it.  It will have saved me more money this year than Betterment has cost me in fees.