Invest to Win in All Seasons: A Smart Guide for the Novice Investor


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Besides the returns and taxability, the PPF scores high on safety, flexibility and ease of investment. Some private banks also offer the facility to invest in the PPF. Opt for a bank that allows online access to the PPF account. Deposits can be made throughout the year, but an investor must deposit at least Rs in a year. The VPF offers a higher rate 8. But this option can be exercised only at the beginning of the financial year or in October.

Invest through a bank that allows online access and investment in the PPF account. Your tax-saving guide for FY 3. The highest rate offered to senior citizens by banks is 7. The tenure of the scheme is five years, which is extendable by another three years. However, there is a Rs 15 lakh overall investment limit per individual. Also, the scheme is open only to investors above In some cases, where the investor has opted for voluntary retirement and has not taken up another job, the minimum age is relaxed to 58 years. There is also no age bar for defence personnel. There is also a clause allowing premature exits.

If closed before two years, the investor has to pay 1. Stagger investments across several financial years to create a ladder of deposits and optimise tax benefits. Sukanya Samriddhi Yojana Returns 8. Although the interest rate has been reduced to 8. Just like the PPF, the interest earned is tax free and there is an annual cap of Rs 1. Accounts can be opened in any post office or designated banks with a minimum investment of Rs 1, A parent can open an account for a maximum of two daughters, but the combined investment in the two accounts cannot exceed Rs 1.

Some experts argue that the debt-based Sukanya scheme is not the best way to save for a long-term goal. This is true, because equity-based options can deliver higher returns. This is why experts advise that the SSY should be used in combination with other investments, such as equity funds, for saving for a child's future goals. The good part is that the girl child tag lends a sense of purpose to the investment.

The maturity proceeds of other investments are often squandered. On the other hand, the Sukanya scheme helps a family save the daughter's education and marriage. Saurav Kumar 32 Years, Bengaluru He puts Rs 25, every year in the Sukanya scheme for the education of his 2-year-old daughter. The scheme offers higher returns than PPF. Open a Sukanya account in a nationalised bank to make it easier to transfer to the child.

National Pension Scheme Returns: Firstly, contributions of up to Rs 1.

The trinity of tax benefits has attracted a lot of investors to the pension scheme. However, many are still put off by the fact that NPS is not completely tax free. This pension is treated as income and is fully taxable. For young investors like Vinayak, the long lock-in period is also a deal breaker. NPS investments cannot be withdrawn before retirement, except in some exceptional circumstances and for specific needs.

However, experts say the long lock-in period is a blessing in disguise. The twin rallies in equities and bonds have helped the NPS churn out good returns in the past few years. But this performance may not sustain in the coming months. NPS funds have lined their portfolios with long-term bonds which have not given good returns in recent months. And equity markets are looking overvalued. Even so, investors can expect better returns from NPS than pure debt products. Rewarded by the markets The stock market rally has boosted returns of aggressive investors who bet on equities In Pic: They have opted for the lifecycle fund option that reduces equity exposure as the individual grows older.

Don't be too conservative when investing for the long term. A balanced exposure to all categories works best.

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Conrad F. Eversbusch (Author of Invest to Win in All Seasons)

Your tax-saving guide for FY 6. Investors still consider them very costly and financial advisers continue to hold them in contempt. But it is time to bury the shady past of Ulips. New Ulips launched by insurance companies are low on costs, which translates into better returns for investors. Besides, some of the charges of the Ulip are not deducted from the NAV so the actual returns for the investors may be even lower.

But Ulips have one distinct advantage over mutual funds. Switching from equity to debt or vice versa does not have any tax implications. Being insurance policies, the income and capital gains from these plans is tax free under Section 10 10D. They will also be useful for investors wanting to put money in debt funds but are deterred by the taxation of short-term gains. The minimum period for long-term capital gains from debt and debt-oriented funds has been increased from one year to three years.

If held for less than three years, the gains are added to your income and taxed at the normal rate. But there is no tax on short-term gains from Ulips. You can also park short-term money in the liquid fund of your Ulip using the top-up facility. How Ulips fared Smart tip: If investing large sum, opt for liquid or debt fund of the Ulip and gradually shift the money to equity funds. The most important consideration.

Some charges are built into the NAV while others are levied by deducting units. Look up all charges mentioned in the brochure. Look at the various fund options available. There are three basic funds: Know how much the Ulip will charge for switching from one option to another. Normally switches a year are free, though some offer up to 12 free switches. Find out rules relating to top up investments and withdrawals from policy. Be sure whether your Ulip will pay only the sum assured or also the fund value in case of a mishappening.

Some Ulips pay only the sum assured, though their premium is also lower. The NSCs also have a sovereign backing. NSCs fell out of favour when bank rates were higher at But deposit rates have now fallen to 6. This makes the NSCs more attractive than bank deposits. One year later, the investment would have earned an interest of about Rs 3, The investor can claim deduction for this Rs 3, for the year The next year, the investment would earn about Rs 4, in interest. This can be claimed as a deduction in The tax deduction available on the interest effectively makes it tax free for such investors.

There have been some changes in the rules for non-resident Indians investing in small savings schemes lately. NRIs are no longer allowed to invest in these instruments. Create a ladder of NSCs so that after they mature the proceeds can be reinvested to earn benefi ts. Unlike the new Ulips where charges have come down significantly, the pension plans from insurance companies continue to have high charges. Interestingly, these pension plans are more lenient than the NPS when it comes to deploying the maturity proceeds. Do these funds really have that expected average return over 35 years?

Dodge April 20, , The last 35 years returned more than Allen Nather June 25, , 2: I noticed that it has. Any direction would be much appreciated. This is what they paid per share:. Dec 22, 0. Graham February 6, , 6: I like the sound of tax loss harvesting. Does the tax loss harvesting complicate things a lot for tax purposes? DonHo February 10, , Using Betterment is a poor solution to not wanting to be bothered to learn the basics of investing, for obvious reasons— soon as the market swoons the noobs will be confused and panicked.

Dependence and ignorance for the sake of getting started is a bad trade. Lessons 1 and 2 above are great, but they are not enough. RGF February 18, , 5: Nice joy September 4, , 5: Sean September 22, , RGF February 24, , It is all the same stuff with no fees. Lucas March 11, , 5: Not a good long-term play. Alex February 26, , 4: Betterment compared with just doing it yourself: I have my account set to automatically deposit a chunk of money into Betterment after every paycheck twice a month.

Since a Betterment account is invested in at least 10 different ETFs, to me it seems like a big hassle to have to make all those purchases twice a month in a way that your target allocation is right on point. Betterment compared with Vanguard: But there are several actual differences. For one, a Vanguard target date fund has 4 ETFs: US and foreign equities and US and foreign bonds. In the month of January alone, tax loss harvesting saved me more money than Betterment costs me in a year.

RGF February 26, , 5: Dodge February 26, , 5: Betterment compared to doing it yourself: I can have my account setup to automatically deposit a chunk of money into Vanguard after every paycheck twice a month. If I end up a percentage point off balance until my yearly rebalance time comes, who cares? My total fee is 0. Betterment compared to Vanguard LifeStrategy: Vanguard can also automatically deposit money into a LifeStrategy fund, which is more diverse despite the 4 funds to 10 ETFs comparison , less than half the cost, and rebalances daily.

Unfortunately, if this year is like all the other years those ETFs have been around, you will likely see no more tax loss harvesting on that same invested money. Paying extra for a value tilt is utter crap. The premise is that until the last couple of decades, individual investors had limited access to diversified portfolios of small stocks and value stocks. As a result, the prices of small and value stocks were lower than they would be if all investors had easy access, and their expected returns were higher.

The introduction and growth of mutual funds that invest in small-cap and value stocks would then reduce the expected returns on these securities.

Since expected security returns depend on supply and demand, an increase in the average allocation to small and value stocks will reduce the size and value premiums. Another prominent skeptic regarding the importance of a value tilt is John C. Bogle, as articulated in a speech and paper, The Telltale Chart. Bogle looks at the data section 2. 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.

It seems to imply that when actual mutual-funds index or otherwise are implemented, that the most illiquid stocks are often excluded, removing the Value Premium. Dodge February 26, , 6: Alex March 4, , I appreciate the thoughtful response. Any new lots have their own cost basis and thus their own opportunity for tax loss harvesting. Dodge March 7, , In terms of taxes, new investments are seen almost as separate accounts.

Value tilting beats the market! This would be an invalid comparison. Definitely reeks of cherry picking, let me guess, you probably saw a chart like this. Kevin April 26, , 7: This is probably the most succinct post I have seen in all of the comments about why fees are so critical in assessing the impact on future performance. Dodge March 13, , 6: It seems I made a mistake here. This is another trick the salesmen sorry, Financial Advisors will use to make their pitch. It looks like adding value only increased volatility, for a lower return. Why would you want this? Not a good investment decision.

APFrugal February 28, , 3: Thanks MMM for checking into Betterment and telling us about it. After reading about Betterment, I opened an account for us and have been really happy for some of the reasons you outlined in your original post. Education we need it! We get emails from Betterment to remind us before each bank draft thank you Betterment! Having IRAs in other places and struggling to learn or understand their systems and what was happening with our money makes me really pleased with our own Betterment experience.

Antonius Momac May 2, , 1: For Betterment, Sept — Oct 3, with a withdraw on that date. So I defiantly did something wrong. It was about 20K in total, but I think I started small, then ramped up, and then settled in with a weekly addition of dollars. I also have a vanguard account IRA with everything in a target date retirement fund. Sept starting balance was 28, Not sure what the fees are, but betterment invest in funds with fees, plus adds their fees on top. I must have done something wrong. Saved the betterment fees too. And the 5 year is But as far as set it an forget it goes. It might be a good option.

Good Luck with the IRA. NO BS and no Sales of any kind. He even points out pros and cons and some mistakes. Awesome and good reading. David March 3, , Hi MMM, Great post! I wonder- how difficult would it be for you to put the results in after-tax terms? Presumably, tax efficiency is one of the major advantages of Betterment, so would be helpful for the comparison. Would this be too difficult? Money Mustache March 3, , 8: First of all, everyone has different tax situations.

Also, all funds mentioned here are highly tax efficient: After over 15 years of owning Vanguard funds, my capital gains from buy-and-hold activities have been right around zero. Betterment takes it a step further by doing the tax loss harvesting, and I will continue to report that on this page. Then you can manually plug that in to determine how much it would help with taxes.


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David March 5, , 2: For those such as retired people with low income , the rate is lower 0 , but as you said, Betterment is probably not a good choice for these people anyway since the gains from tax loss harvesting are zero. What is the breakdown of international vs domestic stocks in your Betterment account? SharonB March 3, , Based on this blog, I went to the Betterment website and started the process. True, I linked the two, but nowhere did I authorize a transfer!

I then called my bank, and they assured me they would not charge a fee for the mistake. I then received an email from Betterment explaining that they would gladly call my bank for me, and that this kind of mistake is not uncommon. Pauline March 3, , 3: Ravi March 7, , 7: The Hedgeable system somehow is able to guess when we are in a bull vs bear market and adjust accordingly? Lori March 6, , Money Mustache March 9, , 4: Benedicte March 19, , 9: I am pretty sur Betterment will not do the W8Ben thing! So I probably can diversify sufficiently with my euros, and not that much with my dollars: Any suggestion would be really appreciated … I am really new at this.

Keirnan October 3, , 5: It would seem buying one of the funds talked about in the comments as an ETF in your TD account may be your best bet unless Vanguard etc will take your money directly saving you the spread. 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. Mighty Eyebrows Boy October 25, , 5: As discussed in the comments there, look at the Canadian Couch Potato website for some really good model portfolios using low-fee ETFs at Questrade.

Steve March 17, , 3: I am new to the investing game and am willing to invest in Vanguard or Betterment. Which would make the most sense for me? Moneycle March 19, , Depending on your k plan, that might be a good place to start. My only caveat would be to check the fees that your k plan charges. I personally prefer Vanguard for tax-advantaged accounts IRA because of their super-low fees. Betterment seems better suited for money that you are investing after-tax because they can do fancy tax-loss harvesting that can save you some money at tax time.

However, I like Betterment, and if you find that using them would get you excited about investing, then by all means use them for your IRA too. That should help give you a solid foundation for starting out. Ravi March 19, , My advice is to open an account with Vanguard or Fidelity, and invest using direct deposit and automatic investment in a low cost index fund or a few different funds s.

What allocation to use? Pick an allocation, buy a few super low cost funds one for US stocks, one for global stocks, one for bonds , set up your direct deposit and automatically buy-into the funds you choose…then get on with the enjoying the rest of your life. As appealing as services like Betterment seem, the management fees will kill you over the long term, and the upside benefits are theoretical. Steve March 27, , 2: My k is provided by T.

The expense ratio for this fund is 0. Other investment options offered are:. Ravi March 27, , 3: It is cheap, you can download it instantly on your Kindle or computer and has very very good and simple advice for how to build your own balanced portfolio using low cost funds from either: Fidelity, Vanguard or T. For example, my combined expense ratio using Fidelity Spartan Funds is. Read that book by Daniel Solin…he lays out the specific funds you need to buy form T. Steve March 30, , 2: Moneycle March 27, , 5: However, I DO agree with Ravi that you could easily build something like a 3-fund portfolio with smaller fees.

But you are stuck with the funds you can choose from in your k.

The Betterment Experiment – Results

Rowe Price Equity Index Trust fees 0. So if you like that allocation you could do this too:. What matters is you pick an allocation and stick with it and rebalance occasionally. So maybe something easy to remember would be better for you:. Steve March 30, , Or should the funds that make up my Roth and my k be similar, low-fee, total market index funds? Moneycle March 30, , Yes similar low-fee index funds. But with an IRA you will have more choice on where you open your account.

Vanguard has the lowest fees. They also have Target Retirement funds that allocate the funds for you in a single low-fee fund. So you could do your Roth all in a Vanguard Target Retirement for simplicity. Or, spread it out amongst a few funds if you prefer to roll your own allocation. Jeff March 31, , 7: Definitely keep investing in your k enough to get the maximum company match. This is free money. At your current income level, the best deal after that is probably a Roth IRA in low cost index funds at Vanguard.

Lucas March 20, , 7: Acastus March 31, , 7: I recommend you add a virtual target date fund to the analysis. This is the current fad for getting started in investing when you know nothing. These funds also diversify across 10 or so funds and rebalance. They adjust to more bonds over time. I have not owned any. Jeffrey April 5, , 8: Really enjoyed this article!

I have virtually no savings, however, as a lot of money has been pushed into a business I started with 2 partners 13 years. Money Mustache April 13, , 8: So, optimizing down to the last basis point is not necessary, but any form of investing will obviously be much more profitable than cash under the mattress. So it all depends on which option you feel best about. Naomi June 20, , 2: Thanks for looking into betterment.

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Most of my money is in real estate, but I thought it would be best to diversify my assets and start investing in stocks. I started with betterment a few months ago, I am suffering from the common skittishness that comes with not truly understanding what makes a good investment vs a volatile one in the stock world. I have a savings of 40 k.

I noted that you have invested k. I would be investing 20k to start and then continue to invest a month. Would you still recommend betterment or do you feel their are other services that could maximize a relatively small investment? Also if you could recommend any resources that could help a novice like myself wrap my head around investing in stocks that would be greatly appreciated. Seminewb January 19, , 1: So MMM, are you saying that if you had Betterment as an option back in your first days of investing, you would put all of your funds into Betterment rather than Vanguard?

Deirdre April 7, , 2: These betterment posts have been helpful, and I might start reading your blog regularly. Thanks for your help! Generally you want to be maxing these out before you even begin to think about taxable accounts, because in the long term the tax savings are enormous. Especially if your employer matches k contributions. Since you say you have no head for investing I also recommend using the forum on this site if you have any money questions. Deirdre April 21, , 8: I feel like you are the ideal Betterment customer.

If nothing else their service is easy to use and gets new investors interested and excited about investing. Nick April 9, , 3: My understanding is that VT holds a broader portfolio than found in VTI, with a more diverse collection of stocks in emerging markets. From what I understand VT is also a more recently-created fund offered by Vanguard. I like the look of VT but its fee is 0.

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Does anyone have direct experience comparing the two? Or am I perhaps best off owning both? Christopher April 13, , Any clarity from MMM would be much appreciated. To be clear, the expense ratios are not paid when depositing and there are no fees paid when depositing. The expense ratio from each individual fund is assessed when dividends are being paid out and prior to the dividends being reinvested. Again, there are never fees assessed when depositing funds and the expense ratio from each fund only will be assessed prior to dividends being reinvested.

Money Mustache April 15, , 9: I wrote the below email to Jon a week or so ago, I also copied his CS department. Jon and I had exchanged a few emails when I was considering his company. In the email to Jon below I asked him to consider a few advantages that WB seems to offer, primarily additional insurance provided by a 3rd party and a lower cost fee tier for larger investors. I have not heard back from him. If anyone in MMM land has heard anything or expressed similar concerns please share any info you might have. As a soon to be household acct we will have K with Betterment to take advantage of the Best tier.

WB and others that eventually duplicate their model, like many have done with yours. This link to an expense ratio calculator compares two expense ratios —. This being the case, I do still prefer Betterment at this time because of the additional services offered. RS April 20, , 4: Currently, I have the following k and b accounts:. I made a switch from corporate to non-profit and work for a University now and max out the b and pension plans right now. My question is this:. Or a Roth IRA? Ideally, I would love to move these to low cost Vanguard funds. Any and all help would be much appreciated.

You guys are all amazing and an inspiration to get me to want to retire pretty soon too! For old accounts, yes you can rollover to IRAs as well. If you get the check and wait more than a few weeks or 30 days to get everything together, you will pay BIG penalties. Unless you have a special ROTH k, this will cost you tax money. Not recommended without visiting your very special CPA. I recommend TD Ameritrade, they will pay you to transfer accounts to them. Moneycle April 23, , 8: I buy my Vanguard funds directly from Vanguard.

Thanks for allowing me to clarify. To trade commission-free ETFs you must be enrolled in the program. ETFs eligible for commission-free trading must be held at least 30 days. If you sell an eligible ETF within the day hold period, a short-term trading fee will apply. Vanguard does charge some fees. Vanguard does have a minimum balance. TD Ameritrade does not. Lastly, yes, the money comes from their business profits. TD Ameritrade is a for-profit company. I have no problem taking some of that for myself, just as I have no problem using coupons or discounts at other businesses.

They all hope you will spend more while you are there. But we have self-control, so we don't.


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  5. I missed that… You would think Betterment being automated would avoid that. Does not Betterment itself choose these sell dates? I wonder what it reinvested into, VWO or something similar. How much of your tax losses were wash sales so far? Shows W for wash sale, C for collectibles, or D for market discount. Shows the amount of nondeductible loss in a wash sale transaction or the amount of accrued market discount.

    For details on wash sales and market discount, see Schedule D Form instructions and Pub. DMB May 5, , 3: So is this beneficial to someone who is looking to just save? I am not as money savvy of those who have posted previously. My saving was depleted due to medical issues. So I am now looking for ways to save and to grow that savings. A friend of mine sent me your way he is a Fan. Moneycle May 5, , Yes, I think that you are an ideal candidate for something like Betterment.

    It invests money in a very reasonable way that is engaging and useful to a novice investor. I have been reading this blog off and on for the past couple of months. After reading this blog and doing my own research I get wrapped up in the back and forth comparisons between accounts with Betterment vs Wealthfront vs Vanguard etc. These comparisons have held me back from opening any type of account. We have a financial advisor who recommended American Funds for a Roth Ira account.

    Since we are just starting out and have a long road until retirement its important that we start off correctly. I would appreciate any help that could point us to a good start to a successful retirement. Richardf May 9, , American Funds have a 5. Also the broker gets money from American Funds each year. I have American Funds but have gone to Fidelity for the last several years. Dodge May 9, , One thing to note, whichever of those three options you choose, your money will be at Vanguard. Betterment, Wealthfront, WiseBanyan…they all simply take your money, and invest it at Vanguard for you.

    Do a lot of people really choose where invest their life savings based on how pretty the website interface is? People think the pretty boxes for 15 seconds are worth paying hundreds of thousands of dollars in extra fees over their lifetimes? Brandon February 17, , 4: Wow, this comment just saved me a lot of money. Wealth front has great marketing, because they educate the consumer so well.

    I got sucked into their white paper and I was still considering going with them, until I found your comment. Thanks for your perspective! Jacob February 21, , 4: Dodge, which LifeStrategy fund are you using now? I was previously following up on your 3-fund strategy. Do you do both? Trifele May 9, , Hi Kyle —You are smart to focus on fees right from the start. With that said, I say skip American Funds for sure. Keep it simple and just open a Vanguard account. Thanks for all the input I appreciate the comments. What type of account would you recommend starting off with Vanguard?

    And is it self advised or aided accounts? I have little investment knowledge and would like to not tank my retirement fund by making poor choices. Moneycle May 10, , Great job on the savings so far, keep that up. You just need to put it to work! Do you have an IRA? If not set one up and start contributing. If you tax bracket is low, contribute to a Roth and take the tax hit now. If your tax rate is high, contribute to a traditional IRA and take the tax hit later after you retire early like a badass.

    But they have people who can answer your questions. Dodge May 10, , 3: Simply call Vanguard, tell them you want to invest in a Target Retirement fund for your retirement, and they will take care of everything for you. Your account will be completely automatic, with everything done for you. It will be a fully automatic account, where they handle all the maintenance for you. Nothing else for you to decide. This will require about minutes of maintenance from you every years. This will reduce your fees even further. Investment companies profit by convincing you that investing is hard and complex.

    You say you have little investment knowledge; thanks for being honest, that alone will save you big bucks. The question is do you want to invest some time into learning more? Learning this as a hobby for me has seriously changed my life and has been more worthwhile that college, I do not joke. If yes, how much time? Then meet with your financial advisor and put a plan in place. More time than that, then read a book from your library. Use the website or call Keep it simple, simple. If you have more questions, you can email me at adamhargrove at yahoo.

    Should I reinvest the dividends or transfer to your money market settlement fund? Trifele May 11, , 4: Definitely reinvest the dividends. This is how you see the magic of compound interest happen. Transferring it to the mm settlement fund means that it will just be sitting there in cash, earning next to nothing. Paul May 11, , What risk are you hoping to diversify away here?

    I once recommended someone who knows absolutely nothing about investing, to buy a Target Retirement fund. Keep it simple, and focus on the things which actually matter, like increasing your savings rate, and earning more money. Moneycle May 11, , RGF May 10, , 3: Am I correct or am I missing something?

    Mellow June 22, , 6: My son is going to go to college in 9 years. Please share your recommendation. Money Mustache June 22, , 8: Keep those employees at work! Ryan June 23, , 2: This analysis would be a lot more useful to me if you were comparing apples-to-apples portfolios. Then you could just set the Vanguard to re-balance annually on the same date which is a fairly common practice. Nini July 8, , 4: I have a question. My boyfriend and I each have separate accounts on betterment. Betterment has been falling recently. He is talking about wanting to pull his money.. His has been up before, my thought is it will continue to go up and down.

    Money Mustache July 9, , 1: Sounds like time for a refresher course on what investing really is! The bigger the drop, the more you get for your money. Every dollar of stocks you own will generate dividends and growth over your lifetime, which is the way you become wealthy. Once you have an account value equal to about 25 times your annual spending, the dividends plus selling off a tiny fraction of the actual shares occasionally will be enough to pay for all your expenses — for life.

    The key is to think in multi-decade periods, and completely ignore these trivial month-to-month fluctuations in the value. Dave July 9, , 2: Betterment is investing you into careful slices of the entire world economy. Heidi July 18, , 7: I could use some advice. I am 36 years old and I unexpectedly lost my husband last year. He was in finance and I was fortunate enough to be left with all our retirement accounts around k and a few life insurance policies around k.

    For the rest of the money I went with a managed account through a financial advisor at my bank at a cost of 1. I also have about a 60k emergency fund in a money market at the bank. I am fortunate enough to have a good job making 80k a year so I hope to not have to touch any of the money until I retire in years.

    We worked really hard to save money in our retirement accounts and I want to do the smartest thing with all of this money as a tribute to my husband. Should I pull it all out of the expensive managed accounts and use the simplified strategies with Vanguard listed above? If I do this, will there be any penalties to worry about?

    I would appreciate any wisdom that you could give me to fix this mess. I am brand new to investing. Kyle July 23, , 9: Most of us use a few, very basic low expense ratio, Vanguard index funds that only require a little management from you. Vanguard also has funds that can require virtually zero maintenance from you.

    Betterment is a type of automated management, you would be looking at. Whoever you invest with, realize that they all sell similar products. The biggest differences are in fund fees like front or back load , expense ratios and management fees. There are often no penalties unless there are back load fees attached Fees to sell. I recommend checking out the MMM Forum and asking more questions, people are really helpful there.

    December 26, , 2: I read a bit on investing, but I still consider myself a newbie after reading off here. It would be smart to consider the perspectives of a lot of people commenting on this certain post. Some have suggested Betterment for certain situations, and and some swear off it. Most of them all have valid points. That would help you reach a better, and informed decision. Jack July 20, , 5: Very interesting discussion, thank you to all who contributed. Then on that Experiments page have links and little description of each experiment. KittyCat July 29, , 4: Hey, I found this place by looking up Betterment, and there is so much information here and so many helpful comments!

    I occasionally read articles regarding money, investing, and retirement accounts and whatnot, but I have yet to start actually investing. Betterment seemed like just the thing for me, and was going to get started, but after reading about all fees and learning the existence of Wisebanyan and whatnot, I am again paused on my road to investing.

    Furthermore, I have other questions that I hope someone would be able to answer. I am 25, and I recently left my permanent job to pursue other opportunities, and as such, there are money decisions I will have to make. I can choose to sell the shares or transfer them to a personal account, and will need to take action within 2 years. It does pay out dividends, which I have elected to reinvest. Should I just sell these shares now, or should I move them into another account? Should I leave it sitting it its current account, roll it over to an IRA, or wait until I am employed as a permanent employee and roll it over to the new k?

    After reading the posts here, I have concluded that my top choices are: I should probably post this in the forums, but Betterment is what led me here so I decided to try my luck here first. KittyCat July 30, , I see that WiseBanyan has free tax-loss harvesting now, which, when combined with the no-fees structure, makes it a bit more attractive than Betterment for me. Antonius Momac July 30, , 3: But at least you know they are putting you in some low fee funds. Based on my risk profile, this is what my allocation is. Try to look this stuff up. You might or might not like the funds.

    I had to jump out. I put an amount for a year and compared it to my vanguard target date fund. Betterment was so much lower over the same 1 year time period. To tell you the truth. Go for housing, clothes, experiences, and invest in yourself. You might want to check out the lending club experiment on this site as well. This I would roll over into a Vanguard account. KittyCat July 30, , 5: Thanks for the correction information.

    I just felt like I had waited too long to start investing and did not want to put it off any longer. I guess the summary of my plan is now: Antonius Momac July 30, , 6: First of all, for 6 months of expenses is Brilliant. That is a truly excellent, and super respectful way to handle your money. You should probably write a book right now. Obviously its MMM style, and you might want to think about ways to lower your taxes. Do scan this thread for all those golden nuggets. So that is something to consider as well. I think the summary is good. Also, maybe you want to try to set up a fake trading portfolio.

    And see what if feels like to see it move over the next few weeks. I think it will be great training. KittyCat July 31, , 1: I just have fewer needs and desires than some people and my hobbies are inexpensive: Actually, when you put it that way, it seems that I am doing better financially than I have realized lol. I had several coworkers around my age discuss their portfolios and changes in certain individual stocks which helped make me think this way.

    Antonius Momac July 31, , 2: One thing thou, you mentioned: Then you want to reduce your tax liability now, and bank on the fact that you can move to Florida, and only then Pay Federal tax on your income, part of which will be your retirement account withdrawal. Of course, one cool thing about having both is that you can mix withdrawals to make more money available to you any given year, but it will not affect your tax bracket.

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    KittyCat August 1, , I enjoy doing research on a variety of different subjects, especially if it will affect my finances purchases, etc…! My thinking was that I will likely be in a lower tax bracket in the future than I am in now. Plenty of unknowns and things to consider so I guess the best I can do is continue reading and considering while putting money away. As I learn, I continue to find out how little I actually know. One step at a time, I guess! Moneycle August 21, , This comment jumps out at me: As for investment advice, I think you are on the right track in picking either WiseBanyan, Vanguard or Betterment.

    But of course avoiding higher fees is the best. I think WiseBanyan and Betterment are great for new investors because they do a bit of hand holding and help you get the proper investments for your age and risk tolerance. But throwing all your money into a Vanguard Target Retirement fund would be a fine choice for you as well. Just get started and have no regrets! Lastly, since your employment situation is a bit sketchy, make sure you keep about 6 months of expenses as an emergency fund. Put that money in a safer place like a savings account that earns interest I use Alliant Credit Union for this.

    BuildmyFI April 18, , 3: I totally agree Antonius, KittyCat has come really ahead of the game for such a young age. Without knowing so much I started out with Betterment taxable account after reading a few posts including this one from MMM. Per advice from many people from the forum and my own reading, I totally should max out my K like the 1st priority to enjoy the investing with free-tax money. To the concern of money being locked, there are methods to access to it early which many people have mentioned about.

    John Davis July 29, , 8: Most of the discussion is about younger people getting started with investing. As a 60 something couple in retirement with significant IRA balances that now support our lifestyle I wonder if this is a good way to invest to minimize fees. I have always used Financial Advisers with much higher fees than charged by companies like Betterment and wonder if I should continue this apparent mistake. In doing my own research it looks like the returns over the last year have been similar to what I could do with Betterment, or direct Vanguard investing, except that the fee paid to the adviser then comes out meaning I am behind.

    Any thoughts on this are appreciated. The math is pretty easy: Betterment is great for starting out but the modest 0. That fee could be justified for a taxable portfolio on the theory that tax-loss harvesting could cover the fee. But for an IRA, I find it hard to justify.

    If it were me, I would move your money to Vanguard which is safe and has the lowest fees you can find. It should be fairly easy to replicate whatever mix of stocks and bonds you currently have. Hazz July 31, , 9: James December 23, , There is no such thing as tax loss harvesting in a Roth IRA. Nice Joy September 4, , Take a look around. If you think you are hardcore enough to handle Maximum Mustache, feel free to start at the first article and read your way up to the present using the links at the bottom of each article. For more casual sampling, have a look at this complete list of all posts since the beginning of time or download the mobile app.

    Go ahead and click on any titles that intrigue you, and I hope to see you around here more often. The Betterment Experiment — Results In October , I took my first plunge into automated stock investing, choosing Betterment out of a large and growing field of companies affectionately referred to as Robo Advisers that offer similar services. Show Me The Money! OK, maybe we could add a second word to that: The worthwhile things they provide, in my opinion, are: More details on this in my charitable giving article.

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