Betterment’s … Paying extra for a value tilt is utter crap. Most of my investments to date have been in IRA’s, but now moving savings and a cash account ready to invest. But you are making your money grow 25 to 30% [Assuming your tax bracket] as soon as you invest. Betterment combines the (slight) advantages of more advanced investing, with an even simpler experience than you would get with just buying shares of VTI. Betterment is a decent option as well as they make it easy. Only 401ks are protected in bankruptcy. Our secondary ETFs, IWN and SLYV are highly correlated with VBR. Is this what you did with Betterment? Lastly, yes, the money comes from their business profits. this sucks’ (already seeing this in the comments). Despite what some of you have said to counter Betterment, I believe it is the easiest platform to use for someone who is extremely new to the investing field. When I do the math on an extra annual expense of .25 for the service, on top of the more expensive ratios for regular Investor-class ETFs, compared to the Admiral shares I have in my mix, that is a pretty substantial amount of cash going out the door every year. Is Wisebanyan a well established company. Box 1g. I think US ETFs may be required to distribute capital gains each year, but think of that as a question to ask, not an answer. If you want to add some Emerging Markets, a broader bond mix (to include TIPS and Corp Bonds) and some REITs….then perhaps you will have something closer to .15-20% expenses…but .58% is a ton. Betterment’s use of secondary ETFs enables Tax Loss Harvesting+™. VNQ 4.8 REITs We help you invest in a globally diversified portfolio of stocks and bonds, allocated to an appropriate level of risk for the timeline you set for your financial goals. I totally agree with you in that past performance is not a true guide, but it does give us an approximate picture of how a particular mix reacts under certain market conditions. This money is in a 70/30 portfolio using all Fidelity funds. If your income ends up rising even after retirement (as has happened to me and many other early retirees), TLH might be counterproductive if you end up selling these shares into an even higher income stream in the future. Hi Dodge, Betterment was so tempting since their interface is slick and it comes highly recommended from so many bloggers I follow. It can’t get any simpler. Wow, great catch!! They take care of the biggest issue: one-stop investing with automatic rebalancing. That should help give you a solid foundation for starting out. Hi Krys! Betterment appeals to me because I am a beginner, I don’t have much to invest right now, and there seems to be fairly small amount of risk depending on how much I plan on investing. I have no clue how to let those dividends mature and care for them. Or a Roth IRA? They also do a great job MARKETING….ahem, I mean educating…people on their blog about investing strategy. I only contributed enough to get the employer match on my 401k in the past, but I’ll likely max out the contributions in a future job. The TLH strategy will blow up in their face. I noted that you have invested 100k. “…We suggest these results might go a long way in explaining why market-based growth fund returns generally equal those of their value fund counterparts over time…”, Oh no! In general you should touch your retirement account. It will likely perform in the lower-middle of the lower fee 100% stock funds. Another question (I apologize for my newb-ness): My 401(k) is provided by T. Rowe Price and is currently in a Target Date Retirement Fund for the year 2050 (when I will be 63). If it doesn’t deviate, don’t rebalance. After a few years, the cost from the higher fee will negate the early benefit from TLH, and it’s all downhill from there. I don’t see the reason (at least for me) why I want to pay an extra 0.15% on top of the Vanguard funds I will choose anyway. Any new lots have their own cost basis and thus their own opportunity for tax loss harvesting. It is better to pay this fee from outside your retirement account allowing you to maximize it’s size. Put the numbers into the calculator, and see if the percentages are more than 5% off. Nothing at all against Betterment, but if you’re really new to this stuff it’s probably not where you want to be starting out. RTM – Value Stocks vs. Growth Stocks), and shows that while the theoretical Fama-French portfolio exhibits a dramatic outperformance, the mutual fund performance of the strategy actually underperformed the market. I contributed towards the company’s 401k and have around 16k in the account which is 100% put towards Vanguards 2050 Retirement Fund. Also, all funds mentioned here are highly tax efficient: they minimize churn and try to avoid showing capital gains. I have been stuck in this exact place for THREE years, and I would love to know if you found the answers you were looking for. My wife and I are in our mid 20’s and I have been looking into starting retirement funds for the both of us. But certainly, timing could have been a big factor. "When you open your Vanguard Brokerage Account, you'll initially need to add at least $3,000 to your settlement fund. Does the .15% fee Betterment charges (or .25, or whatever, depending on investment amount) include the fees Vanguard charges them for the actual funds you invest in? If you qualify, you could be moving $5500/year. Based on my risk profile, this is what my allocation is. Each month, I invest 5% (that my company matches) into a 401k and I also buy company stock through my employee stock purchase plan. Even though Robinhood is an investing platform that allows you to trade for free there are still a lot of people out there who don’t know exactly what to trade in. So that is something to consider as well. So is this beneficial to someone who is looking to just save? Dodge, I’m just a bit confused about Admiral shares. For instance, the Vanguard Total Stock Market Index ETF (VTI) is .06%. TRP INST LGCAP GRTH (large cap) 9.81% 0.56% This set of holdings is one of three that offers exposure to value stocks of certain sizes. Wealthfront vs Betterment. I started with the Motley Fool books, but I also recommend other quick reads like “The Little Book” series, especially Joel Greenblatt and Bogle’s books. However, I know that changes in the market or a withdrawal could bump me back down to the Investor Share level (though Vanguard will automatically move you to Admiral each quarter if you qualify). This is how you see the magic of compound interest happen. For example: Even with the caveats above, it is a cool enough feature (and profitable for many) that I have enabled it so I’ll be able to report the results on this page. Vanguard has the lowest fees. Looking at the wild swings in that RPV chart, sure they “can” beat the market over a short period of time if you’re lucky and choose the right fund, but that’s no different than buying Tesla because you heard it’s up lately. If your Betterment account is 45% domestic, 45% international, and 10% bonds, then presumably having a line representing 45% VTI, 45% VXUS, and 10% BND is the appropriate comparison to the Betterment portfolio? Wow, this comment just saved me a lot of money. I liked your simple annual rebalancing strategy and the corresponding spreadsheet which is shown in the referenced image “http://i.imgur.com/PbI4B9x.png”, but I can’t figure out how you calculated the “Your portfolio is off by” value. Thus I chose the more conservative route. For basic solid investment advice, do a google search for “Bogleheads investment philosophy”. That’s the wrong question. Should I put the money into Vanguard using something like Dodge’s asset allocation and just not worry about getting bumped between Admiral and Investor Share levels (due to market changes or withdrawals, etc)? That’s what we’re seeing from the chart so far. Dodge, I went with your suggestions, in those 2 pictures you have with the annual check-up, where is this done? If they can’t handle the emotions of buying/selling in the portfolio, then yes, an automatic fund can make sense. I read a bit on investing, but I still consider myself a newbie after reading off here. Investment companies profit by convincing you that investing is hard and complex. Obviously you are putting your eggs into one basket to a large extent, but 15%+ returns off the top are pretty appealing. I just opened a betterment account, it does seem the best option, especially for someone like me who doesn’t have a lot of starting capital, has just about no idea what they’re doing, and doesn’t want to risk too much. http://research.tdameritrade.com/grid/public/etfs/commissionfree/commissionfree.asp, “TD Ameritrade features more than 100 commission-free, non-proprietary ETFs. Buy Fidelity or Vanguard ETFs at no load and lower yearly fees. If you don’t meet any of this criteria, the fee is higher. :P. You are talking about admiral shares with low fees…. And see what if feels like to see it move over the next few weeks. This is because newspapers make money off of scaring you, while in fact there is nothing scary at all about a buy-and-hold index fund investment. Robo advisers…lmaof!! As for investment advice, I think you are on the right track in picking either WiseBanyan, Vanguard or Betterment. While stocks of good value and appropriate size exist in other geographic markets, Betterment expresses these portfolio tilts only in the U.S. because international funds with value and size tilts currently are too expensive to maintain Betterment’s low average costs. Then you could just set the Vanguard to re-balance annually on the same date (which is a fairly common practice). $56K in cumulative fees over 20 years I don’t understand how you can justify an ER of 0.31% – 0.51% (Betterment’s fee on top of the fee from the investments they choose) at Betterment, by saying it’s simpler, when these same options are available directly at Vanguard (instead of paying Betterment to invest in Vanguard funds for you), for a significantly lower cost. "What is the minimum amount required to open an account? 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