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Betterment Review

02.06.2013 by Kevin Mercadante //

The past few years have seen the rise of a number of specialized, online investment management services. One of the better programs out there is Betterment.

Betterment describes itself as “The fully diversified, automated, and smart investment account that helps you feel good about your future.” It offers a simple, efficient investment system that will appeal to a large number of investors.

How Betterment Works

Betterment uses a simple investment strategy that’s based on two investment options, referred to as baskets. One basket is made up of stocks and the other of treasury bonds. But rather than holding individual stocks, each basket is comprised entirely of a mix of exchange traded funds (ETF’s).

As an investor, all you need to do is set your portfolio allocation and the system handles your investing for you.

Unlike many online investing services, Betterment does not require a minimum opening account balance. If you open your account with less than $10,000 however, you will be required to make monthly deposits of at least $100 until the balance is achieved. Once you reach the $10,000 mark, continued monthly contributions are optional.

You can move money easily and automatically between your Betterment account and any outside accounts you have with next day transfers. The system also allows you to do investment projections online simply by changing asset allocations and projected contributions.

One of the coolest parts is that you can “try before you buy” so-to-speak by running savings goal scenarios before actually committing the money to those investment mixes.

Betterment will also give you $25 if you open and account with at least $250.

Betterment Pricing

In regard to investment fees, Betterment has no transaction fees, but charges a management fee based on portfolio size. There are three pricing tiers that determine the amount of the management fee:

  1. for accounts under $10,000 the annual percentage charged is .35% of the balance,
  2. for accounts of $10,000 and up to $100,000, the fee is .25% of the balance,
  3. for balances of $100,000 and higher the annual fee is .15% of the balance.

If your account balance is $100,000, your annual account management fee will be .15% of the balance, or $150.

This makes betterment one of the lower cost investment systems around, especially on accounts with higher balances.

Betterment Advantages

Pricing is an obvious advantage with Betterment. To be able to maintain $100,000 of managed investments for just $150 per year would be difficult to duplicate elsewhere.

Simplicity is another advantage. You can set your portfolio allocation between stocks and bonds and management will take it from there. You don’t need to actively trade, to follow your investment positions on a daily basis or to make changes.

Betterment also has professional management which saves you the time and effort that will take to become a successful investor. And rather than investing in stocks, management invests instead in ETF’s. That not only keeps trading expenses at a minimum, but it also achieves significant diversification within each asset class.

Management’s investment philosophy also seems very solid. The bond basket is invested in ETF’s that hold Treasury Inflation Protected Securities (TIPS) with maturities of three years or less. That minimizes interest rate risk that is inherent with longer-term bonds. This makes Betterment’s bond positions more secure than typical bond funds

The stock position is held in ETF’s that invest in value funds and small-cap funds. At this time the entire stock portion is held in US based stocks. Betterment holds the stock position in several ETF’s that are determined by management to best achieve the program’s investment goals for its equity positions.

Like many of the online investment systems available, your holdings in the account will be limited to Betterment’s baskets. You will not be able to hold individual stocks, mutual funds, or ETF’s as you would in a typical online brokerage account. Betterment is, after all, a managed investment account, and not a general investment account. This is how they keep it simple for you, the investor.

On balance, Betterment looks to be a good investment choice for most investors, particularly for those who are looking for aggressive equity investments, counterbalanced by conservative bond investments. And the cost and simplicity will be hard to beat anywhere.

You can get more information on how Betterment works, and take advantage of a free 30 day trial offer and the $25 bonus by visiting the Betterment website.

Categories // Investing, Reviews, Savings Tags // Betterment, Investing, Savings, simplify

Simplify Your Financial New Years Resolutions

01.06.2012 by Matt Jabs //

To start 2012, many people will set New Year’s resolutions to better their finances. Starting is the easy part, to follow through on the resolutions you will need to make sure they are simplified and effective.

Employ these 3 tips to ensure your financial resolutions are a life long success.

1. Create a Spending Plan (Budget)

Nobody likes the word budget so think of budgeting more like a “spending plan.” Rather than spending money with no plan and wondering where it went, create a plan that tells your money where to go. This gives you more control over your money and also provides a lot of security and piece of mind.

“Beware of little expenses; a small leak will sink a great ship” – Ben Franklin

2. Pay Off Debt

If you have high interest debt (i.e. credit cards) be sure to allot for it in your spending plan. This type of debt steals your wealth so pay it off as soon as you can to avoid throwing money away. I recommend using the debt snowball method in one of two ways:

  • Highest interest debt first – Arrange your debt snowball to pay off your debts in order from the highest interest rate to the lowest. This method saves the most money.
  • Smallest to largest debt – Order debts from smallest to largest and pay them off in that order. This method focuses more on small wins to maintain motivation.

3. Invest and Save with Betterment

Once your spending plan is in place and you’re apportioning money toward debt be sure to set aside money for saving and investing. This is where Betterment helps simplify things for us. Create savings goals for things like vacations, emergencies, auto repair and maintenance, etc., and begin funding them automatically from your bank account each month. This type of  “autopilot saving” is the only way to successfully save money. If you don’t do it automatically chances are you’ll save for a few months, quit when “something comes up,” and never start again. The simplicity of the Betterment system will help make you successful, all you have to do is use it!

Try Betterment now, they give a $25 bonus to all new accounts opened with at least $250.

Take these 3 important tips to heart as 2012 approaches and put yourself on a path to a financially fit future.

Categories // Debt, Investing, Money Management, Savings Tags // simplify

How To Pack Light and 400 Years of KJV

05.01.2011 by Matt Jabs //

In a few hours I’ll be leaving for Washington D.C. to attend the 400th anniversary of the King James Bible.  I read the King James Bible and am proud of its historical significance and affect on my life.  In this article I’ll share tips I use to pack light, along with a few cool stats about the good ole KJV.

Tips on packing light

Since my trip to D.C. will be 3 days total, this article – complete with video – will offer tips on how to pack light for a trip of several days.

As promised, here are links to the book I’m reading “Economics in One Lesson“ along with my pocket-sized Leatherman Juice XE6 (the ULTIMATE pocket knife/tool) and the Flip UltraHD video camera used to shoot the video.

When packing for any trip I employ the following as standard procedure to help keep it light:

  • Check weather and pack accordingly.
  • Use small versions of needed items (like my pocket-sized umbrella.)
  • Match the amount of days to outfits needed – don’t pack more outfits than days.
  • Try to multi-task your clothing by using the same piece in several outfits.
  • Pack a low number of high quality, high functioning items.
  • Keep colors basic so multiple items match.
  • Don’t assume clothes are dirty after one wearing.
  • Wear layers, they always reduce bulk and increase versatility.
  • Utilize community by sharing items amongst yourself and others traveling with you.
  • Take advantage of courtesy items and amenities at your destination.
  • Reduce and rework until everything fits in one bag.

There are obviously other tips to help pack light, but these will help get you started.  If you have tips I missed, be sure to share in the comments section below.

Highlights about the King James Bible

Here are a few notes on the historical impact and significance of the King James Bible:

  • It is the best selling book of all time.
  • More translations of the KJV have been made than any other book.
  • It is older than the United States of America by more than 100 years.
  • The Declaration of Independence, the Constitution, and the Bill of Rights had an impetus born out of its pages.
  • Soldiers have found  hope and comfort in it for centuries.
  • It is read at our weddings and by our gravesides.
  • Presidents and Kings have quoted from it for aid in domestic disputations, and for clarity amidst diplomatic challenges.
  • Its words are plastered in our public buildings, referred to in our music, and acted out in our movies.
  • It is a cornerstone of English literature.
  • It has solidified the English language, and spread it’s verbiage across the globe.

This is just a small taste of the history and influence of this greatest of books.  Please join me in celebrating the 400th anniversary of the King James Bible.

PS… I used to attend the church that formed the Bible Nation Society, who is spearheading this remarkable event.

Categories // Simplify, Spirituality Tags // simplify, Spirituality, travel

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