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My Three Year Review on Betterment

Updated: Jan 27



In 2016, I decided to sign up with Betterment, a online investing service. After much consideration and research, I decided to take the plunge. I was looking for an investing service in which consisted of both effortless investing, while still remaining relatively liquid, in case I needed money for some life changing event. My thought process behind the decision was to use the service as an additional savings account. I would potentially get a better return investing in mutual funds as opposed to depositing my money in a standard savings account with practically a zero interest rate return.


I opened the experimental account, depositing 2,500 dollars. I decided to error on the side of caution, since prior to researching the company, I had no prior knowledge, and had knew of very few who used the service. On top of the initial deposit, I used the monthly auto-deposit service, adding an additional $400 per month. Since then I have continued to use the service, depositing and withdrawing from the account. I have adjusted the auto-deposit feature numerous times, and have used the service to achieve some pretty cool life events. But will talk more on that later!

AN INTRODUCTION TO BETTERMENT


By now you might be wondering, “What exactly is Betterment?”. No worries, that’s what the Wise Financial Man is here for! Betterment was one of the first financial robo advisor services in the United States! Betterment launched it’s services in 2010 with the mindset of revolutionizing the financial investment world! Since then, the company has grown to be thee largest independent robo advisor company in the world. Betterment currently manages roughly $15 Billion plus in assets, while managing to obtain and work with roughly 400,000 clients.



Betterment differs from your standard online investing brokerage. With some of the well known brokerages such as E-Trade, Ally Invest, Scott Trade, you have the ability to invest in individual stocks or bonds. With Betterment, your investing in exchange-traded funds (ETFs). Betterment does not own any of the funds it uses to invest your money in. Rather Betterment uses Vanguard funds. Once I found that out, I had some what of a peace of mind knowing the company wasn’t just another company trying to sell the next new thing.


So What Made Me Sign Up with Betterment?


The mindset, technology, and features Betterment had to offer really made the company attractive to me. I had never heard of a robo advisor financial service prior to stumbling onto Betterment. The company had a mindset to shake up the financial spectrum by investing in low fee ETF’s with a proven performance history. Anyone that knows about mutual funds and exchange-traded funds, knows Vanguard is one of the best.


EFFORTLESS INVESTING: On top of it, I loved that Betterment is truly effortless to invest with. When life gets busy, and you have your 9 to 5 job, family to take care of, and all that other crap on the side, it’s hard to make time to keep up with the latest and greatest companies or newest financial news. I believe having an effortless investing system in place is critical. I mean, I think we can all agree that we already have enough on our plate.


LOW MINIMUMS: Another reason I love Betterment, is the low minimums required to get started with the company. Betterment has no minimum investment allowing virtually anyone to get started with the company. Whether you have 10 dollars or a few hundred thousand dollars, you can invest with Betterment.


LOW FEE’S: Betterment continues to provide it’s services at low fee’s. Betterment basic account has a 0.25% annual fee. Betterment also offers a premium account with a 0.40% annual fee allowing investors to contact a team of certified financial planners through live phone calls and emails.


AUTO DEPOSIT: One of the best features of Betterment is the ability to allow it’s investors to put their account on auto deposit. What this means for you, is you can set up how frequent you would like Betterment to withdraw money from your savings or checking account and invest it. I used this feature to invest weekly, every Wednesday, pulling out anywhere from 100 to 500 dollars. What I love most is you actually begin to forget about the auto deposit, and later when you log into your Betterment account, you have a surprisingly decent amount of money built up.


EXTRA FEATURES: Some of the extra features Betterment offers is goal based savings. It gives you the option to enter the amount of money you would like to save up, and in returns tells you the estimated amount you should invest every month to reach that goal. Betterment also offers tax loss harvesting and provides it’s customers with a relatively liquid portfolio. Lastly Betterment has a fun interactive platform, encouraging your to reach your goals. I constantly found myself checking in on my Betterment account, looking at the Betterment virtual dashboard, watching my portfolio worth build.





WHAT IS MY VIEW ON BETTERMENT?


I believe Betterment is an amazing financial service offering value to both beginner and experienced investors. I think they've achieved their goal of shaking up the financial industry, making the statement that they're here to stay, by using their proprietary technological systems. If you are looking for a truly effortless investing system, I high suggest Betterment. I have used the company to save up large amounts of money in which I have used to purchase my house, pay off credit card debt, and invest in other assets and interest. Best part about it was Betterment took very little of my time and attention to invest. Betterment offers solid ETF’s to invest in with many great features at a low cost. I have already used the service for three years, and continue to plan to work with the company. Who knows, maybe one day I will test out some of it’s competitors. But for now, the Wise Financial Man is more than happy to use Betterment as a second savings account!



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