Investing

I’ve Finally Started To Invest…Off To Betterment!

Betterment, an option I can stand by.

1 picture, 1 simple effect and 1 Betterment.com ad and, we’ve got a pretty cool pic!

Hey everyone, thanks for swinging by to hear my story about my decision to invest. I’m Josh, the guy behind this blog and, I really appreciate you stopping by! That being said, when it comes to things like investing, laws of what I can or can’t say may hinder the process of growth. The good news is, we have great disclaimers that protect us and allow us to speak our minds online. So, here’s a big one before we get into the meat and potatoes of this article, which reminds me…Hey Money and Potatoes, how’s it going?

Disclaimer #1 – Blatant Plug Disclaimer: Yes, I absolutely plugged Money and Potatoes in the end of the last paragraph and, this one is to do nothing more than plug them again. But, they did not pay me for this advertising, they just provide a fun personal blog that you may want to check out when you’re done reading this article.

Disclaimer #2 – This Is Not Advice: As you can probably tell from the last couple of paragraphs, I’m no big wig, suit and tie wearing kind of guy. If you’re looking for that you’re on the wrong blog. I write about how I invest, use credit cards and/or have helped others through the process but, every situation I talk about is very unique. Before following in my footsteps on anything, do your own research, understand you unique personal finance position and, then, and only then, take action to become more stable.

Now We Get To The Meat N Taters

So, I did my Monday Money post over at Modest Money as I do every week. But, this week was something very close to home. It was a post about my decision to use Betterment.com investment services but, if you read into the article, you easily could see that there was much more to it! To be short about it, I went over why investing by 25 is important and the fact that I’m about to turn 26. Read the article here!

One of the reasons I wrote that article is, I’m watching time fly by and, not doing anything with my money. Well, not anymore. I’ve been doing reviews for Jeremy lately and, we’ve been looking at different investment services. I’ve checked out a lot of different sources and I’ve gotta say, my favorite investment service by far, at least to read about has been Betterment. But, I’ve never used Betterment and, before the review, I’d never even heard of them.

A Quest For More Betterment Personal Stories

So, I wrote this detailed article about them in a place that I knew would get a lot of comments from authorities in the personal finance industry. Not to my surprise at all, I got a bunch of comments from people who really know the investment market, the personal finance market, ect…

I’ve Gotta Share Some Of These Comments

Grayson from Debt Roundup writes

I have been with Betterment for close to a year. I really have enjoyed their service and plan on keeping it for some time. It is super easy to use and it really is a time saver. They are also creating a better portfolio next month, so it should offer a greater diversity.

Kim from Eyes On The Dollar writes..

I started a Betterment account about 6 months ago. I realize I could probably invest the money myself, but I don’t have to think about it, so that’s worth something.

Rita P. from Digital Spikes writes

Josh, it is very good that you thinking long term right at 25. Betterment is very good option for people who don’t have time to invest. Invest your money, set your bucket and just relax. Nice post.

There Was One Thing I Didn’t Notice In Comments

It seems like absolutely no one had anything bad to say about the option. There were a couple of comments that mentioned other investment services they used but, in the same comment, mentioned that Betterment is perfect for the right investor. If the top guys in the industry have nothing bad to say about Betterment, well, I’ve got a lot to think about!

Thinking Done…Off To Betterment.com

Right after responding to all the comments on my post, I grabbed by checking account information and started an account of my very own. And, since I’ve been through it, I figured since I went through the sign up process, I should answer a few common questions here for you…

Question #1 – Is Betterment actually free?

Answer – Well, yes and no. If you’re going to use it to see what your goals should be and where you should put your money, it is absolutely free. You don’t have to make a deposit to sign up. However, to use the tools, you are going to need to enter your checking information…just in case you do decide to invest.

Now, if you decide to invest, it’s not free. Betterment has an annual fee that fluctuates depending on your balance. The annual fees range from .15% to .35% with an additional .2% account management fee. But, in my opinion the tools are well worth the fee. That’s especially true when you consider that there are no trade fees at all. You do not pay on a per transaction basis, you pay an an annual basis and, that’s it!

Question #2 – Will Betterment.com ask for my social security number?

AnswerYes they will. When it comes to any form of investment, there are tax implications or rewards that may come as a result of that investment. For more information on taxes as they relate to investments, consult your accountant or financial advisor.

Question #3 – How long did it take to sign up?

Answer – Don’t you hate it when you read something like sign up in 3 minutes and you still happen to be trying to get it done 2 hours later? I never get that far and avoid aggravation. Anyway, the process was pretty simple. I’d say it took 6 or 7 minutes to sign up.

Question #4 – Do you really get the $25 they promise just for signing up?

AnswerYup. But, there is one condition. You have to start with an initial deposit of $250. But, if you do, it works out to be a 10% initial R.O.I., not too shabby if you ask me!

Important Update 8/28/2013

In one of the comments below, Grayson from Debt RoundUp wrote…

Glad to hear that you finally jumped on board Josh. One thing you should mention is that Betterment does not offer a $25 sign up bonus if you are signing up for an IRA account. It only applies to non-IRA accounts. I just thought I would put that out there.

I looked into it and, Grayson is absolutely correct. Turns out, you don’t get the twenty five bucks on an IRA, awww shucks! So, a big thanks to him for making a great addition to this post!

Thanks For Reading – Please Answer My Reader Question…

Thanks for taking the time to read my article. If you have any questions, leave a comment, I’d love to answer them! If not, here’s one I’ve got for you…

Are you currently using Betterment.com? If so, what are your thoughts about it? If not, have you considered it?

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55 Comments

  • August 27, 2013 - 2:27 am | Permalink

    Thanks for using my comment. I first signed up just to get the $25. Like you said, good ROI, but I decided to keep it because I can make my monthly deposit without the trade fee every time. I’ll be curious to see how the final fees come out after a year, but I think I’ll come out ahead. Congrats on starting your fund.
    Kim@Eyesonthedollar recently posted…Student Loan Money-Don’t Use It To Buy an IguanaMy Profile

  • Joshua Rodriguez
    August 27, 2013 - 4:17 am | Permalink

    Hey Kim, thanks for stopping by. It seems like it works well. I’ve heard the returns on investment there are pretty high. Are you seeing a lot of growth?

  • Naz Olsen
    August 27, 2013 - 4:30 am | Permalink

    Hey Josh You have sparked an interest. I have to say I would be quite a bit more interested if I were to hear about your success with betterment. Keep us posted!!

    • Joshua Rodriguez
      August 27, 2013 - 9:48 pm | Permalink

      Hey Naz, thanks for your comment. I hope that Betterment is successful for me. I promise, I’ll keep you posted!

  • August 27, 2013 - 11:42 am | Permalink

    Thanks Josh for using my comment. Investment on betterment is a good idea and I would like to consider it in future. Would definitely love to know more about your growth in this betterment
    Rita P recently posted…Become rich now or neverMy Profile

    • Joshua Rodriguez
      August 27, 2013 - 9:49 pm | Permalink

      Hey Rita, my pleasure, thanks for the valuable insight! I’ll keep you posted on the growth as it happens!

  • August 27, 2013 - 1:45 pm | Permalink

    Good for you, Joshua! Glad you are starting your investment plan. Now, off to Modest Money to check out what all the hubbub is about. :-)
    Laurie @thefrugalfarmer recently posted…Is Your Air Conditioner on Your Side Against Debt?My Profile

    • Joshua Rodriguez
      August 27, 2013 - 9:49 pm | Permalink

      Thanks for your comment, Laurie! I hope you enjoy the article on Modest Money as well!

  • August 27, 2013 - 4:41 pm | Permalink

    I’ve been hearing a lot of Betterment lately…I just read your post on Modest Money and will have to look into it. As of now, I have most of my funds in Vanguard target funds and I’m comfortable with that. But I’m always interested and curious to see how I can use new methods in my portfolio.
    Andrew@LivingRichCheaply recently posted…More Ways to SaveMy Profile

    • Joshua Rodriguez
      August 27, 2013 - 9:50 pm | Permalink

      Hey Andrew, thanks for your comment! Betterment is definitely creating a name for themselves, that’s for sure! I’ve heard that Vanguard target funds work out pretty well. I may try that out as well. AS you said, it’s always good to look for new methods to use! Thanks again for stopping by!

  • August 27, 2013 - 5:21 pm | Permalink

    I love Betterment! Sure, it’s not necessarily free, but I don’t have to worry about my investment too much. All I do is deposit money monthly and watch it grow.
    Lisa E. @ Lisa Vs. The Loans recently posted…Weekend Recap: An Ode to ChuckMy Profile

    • Joshua Rodriguez
      August 27, 2013 - 9:51 pm | Permalink

      Hey Lisa, thanks for your comment! Although I haven’t been with Betterment for too long, I can already say I love the simplicity of investing with them!

  • August 27, 2013 - 7:32 pm | Permalink

    I’d like to start a Betterment account in the near future. We have money that we save for our daughter ($100 for every year old she is on her birthday) that I would like to invest starting next year.
    Nick @ ayoungpro.com recently posted…Ask the Readers: Is Downgrading to a Beater Car a Mistake?My Profile

    • Joshua Rodriguez
      August 27, 2013 - 9:52 pm | Permalink

      Hey Nick, thanks for your comment! I would definitely suggest doing some sort of investment with that money. Although, it’s not a huge amount, it probably has a lot of time to grow! You’d be surprised at what it could eventually grow to. Thanks for stopping by!

  • August 28, 2013 - 12:53 am | Permalink

    Hey Josh. Betterment sounds like a good plan, except apparently one actually needs money to take advantage of its services. That is somethign I just don’t have! If I ever have enough where I think it may actually be prudent to use a service like Betterment, I’ll definitely check it out more :)

    Take care and all the best.

    Lyle
    Lyle @ The Joy of Simple recently posted…When Enough Becomes ENOUGH, Hit The Delete Key!!!My Profile

    • Joshua Rodriguez
      August 28, 2013 - 1:22 am | Permalink

      Hey Lyle, thanks for stopping by. Betterment seems like it’s good, the verdict is still out…I’ll let you know what happens. Keep up the blogging. I stopped by your blog and, you’ve got a lot to offer, I’m sure money is to come as long as you continue to help people by providing the answers they need. Thanks for stopping by!

      • August 28, 2013 - 1:34 am | Permalink

        Thanks Josh for the kind words of support and encouragement :) Do keep me abreast of Betterment and best of luck on your “relaunch” and goal of hitting a K a week so that you can help out with the homeless.

        Take care and all the best.

        Lyle
        Lyle @ The Joy of Simple recently posted…When Enough Becomes ENOUGH, Hit The Delete Key!!!My Profile

        • Joshua Rodriguez
          August 28, 2013 - 10:17 pm | Permalink

          Hey Lyle, my pleasure and thanks again for stopping by! I assure you, I’ll keep you up with betterment. I’ve always been told not to watch investments day by day because the money’s in the long term so, I’m sticking to it. I’ll check it monthly and, report what I find! As far as the goal goes, thanks for your support and encouragement, it’s because of that kind of support and encouragement that I know I’ll reach it one day! Thanks again!

  • August 28, 2013 - 3:42 pm | Permalink

    Josh, Great to see that you have taken the leap into investing; and at a young enough age to where you will really reap some benefits. The more time you have to let compound interest work its magic, the better. Moreover, the sooner someone develops – and starts executing – an investment plan, the less they will feel inclined to take unnecessary risks to get caught up once they realize their nest-egg is going to fall short. Paraphrasing a gentleman (his name escapes me) from the PBS documentary “The Retirement Gamble” (which I highly recommend!), “If you have been working since your early-mid 20s, and you finally decide to get serious about investing for retirement in your 40s, it is too late, that boat has sailed.”
    James Molet (SavvyJames) recently posted…Wealth AccumulationMy Profile

    • Joshua Rodriguez
      August 28, 2013 - 10:20 pm | Permalink

      Hey James, thanks for stopping by and showing your support. I can’t necessarily say I have a plan but, I do have a goal and, that’s a good start. Who knows if the goal is actually feasible , only time will tell but, I’ll keep you posted as time passes. By the way, “The Retirement Gamble” was a piece produced by Martin Smith and the link is here…http://www.pbs.org/wgbh/pages/frontline/business-economy-financial-crisis/retirement-gamble/transcript-43/ thanks for mentioning a great resource! Se ya around!

      • August 29, 2013 - 4:17 pm | Permalink

        Oh yes, I am definitely familiar with the documentary. I purchased it on Amazon and have watched it a number of times. I just could not remember the name of the gentlemen that I was paraphrasing.

        A goal is definitely a good start, but of course a solid plan is required to reach it. Shameless plug ahead…you should check out my book, and while I am just a little biased, the book is written around the idea of building and executing a plan, with detailed examples and accompanying spreadsheets.
        James Molet (SavvyJames) recently posted…Wealth AccumulationMy Profile

        • Joshua Rodriguez
          August 29, 2013 - 10:45 pm | Permalink

          Hey James, thanks again for stopping by! The documentary was pretty good, I can definitely attest to that. I’m working out a plan now, I’m just not sure how it’s going to work out. I’ll keep you posted on how it goes. And, I’ll definitely check out your book from the shameless plug. You mind sharing a link in your response?

  • August 28, 2013 - 3:58 pm | Permalink

    Glad to hear that you finally jumped on board Josh. One thing you should mention is that Betterment does not offer a $25 sign up bonus if you are signing up for an IRA account. It only applies to non-IRA accounts. I just thought I would put that out there.
    Grayson @ Debt Roundup recently posted…Should You Pay Cash or Finance Your Next Vehicle?My Profile

    • Joshua Rodriguez
      August 28, 2013 - 10:22 pm | Permalink

      Hey Grayson, thanks for stopping by and mentioning that crucial piece of information. I was under the assumption that it did but, I didn’t start an IRA so, I didn’t dig too much into the details there. I’m going to go and make an addition to the article right now…thanks again!

  • August 28, 2013 - 9:10 pm | Permalink

    I’ve heard about Betterment but never tried it out. Might as well for the free $25.
    Troy recently posted…Why the Short Term Stock Market Peak is InMy Profile

    • Joshua Rodriguez
      August 28, 2013 - 10:36 pm | Permalink

      From what I’ve heard, it’s a great way to go. The $25 is a great perk but, what I’m really after is the returns. I’ll keep you posted. Thanks Troy, for stopping by!

  • August 29, 2013 - 2:06 pm | Permalink

    I haven’t used Betterment, but like you, I haven’t heard a single complaint about it, either. In fact, we interviewed the CEO of Jemstep, a competitor that I love, on the podcast, and even he was very kind about Betterment.

    Congrats on getting the ball rolling!
    Average Joe recently posted…Top 5 Financial Superheroes Who Never WereMy Profile

    • Joshua Rodriguez
      August 29, 2013 - 10:47 pm | Permalink

      Thanks Average Joe, for stopping by! Hey, would you mind linking to your interview in a response to this comment?

  • August 29, 2013 - 3:06 pm | Permalink

    Betterment sounds very interesting! I don’t currently have any investments what with focusing on paying off debt. But I certainly hope to invest once they are cleared. Please keep us posted with your progress!
    debtfreeoneday recently posted…August Debt Total UpdateMy Profile

    • Joshua Rodriguez
      August 29, 2013 - 10:48 pm | Permalink

      Hey Debt Free One Day, thanks for stopping by and adding to the conversation! I’ll definitely keep you posted and, you’ll see me around your community too so, keep me posted on your debt freedom journey!

  • August 30, 2013 - 1:54 am | Permalink

    I think Betterment is an excellent service. It is on the forefront of the next generation of investing for an under-served market. You have the “big guys” who only deal with clients that have $1 million or more. Then you have the basic services like Vanguard/T Rowe Price for those just starting out. But you don’t have anything for the in-betweeners that want good low cost investments and a little advice on the side that also provides instant info on the go. That is where Betterment enters the picture. Note that I am not putting down the other services, just saying they don’t fit the niche that Betterment serves.
    Jon @ MoneySmartGuides recently posted…Chicks Don’t Dig The LongballMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:18 am | Permalink

      Hey Jon, thanks for your comment. I keep hearing about Vanguard out there but, haven’t really looked into it because to the best of my understanding, you really have to manage those accounts and that takes time. I like Betterment because I can give them my money and they will invest it for me without me having to manage a thing. I have to agree with you to, it’s definitely what seems like a forgotten area until you consider Betterment, they’ve really got something going for them!

  • Thomas
    August 30, 2013 - 11:04 am | Permalink

    I read that post on Modest Money and I have to agree no one had anything bad to say. I currently use merrill lynch and the reason is simply because I get free trades. I don’t get help or use anything else so I guess I could go with anyone. I just never heard of them until earlier this/last week. I really like where you are going with the site. I am looking at cutting down on posts and doing a lot more marketing and branding. Let me know if you need anything! Have a great weekend!
    Thomas recently posted…Grocery Shopping List: How I Save Money on GroceriesMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:21 am | Permalink

      Hey Thomas, thanks for swinging by. Yea, the no fee for trades is a good way to invest no matter if it’s with Betterment, Merrill Lynch or any other service. Do you have to manage your accounts at Merrill Lynch or do you just deposit money and watch it grow? Thanks for your kind comments about my new approach, I felt it was necessary if I really wanted a blog that I could be proud of. Good luck on your shedding of YDF. If you need any help there, let me know. Thanks for your offer as well! See ya soon!

  • August 30, 2013 - 12:54 pm | Permalink

    Until now, I had not heard of Betterment.com. I’m definitely headed over to check it out. I’m always open to new ideas and methods of investment. Thanks!
    Patti recently posted…Is That a Counterfeit Coupon?My Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:22 am | Permalink

      My pleasure Patti, thanks for stopping by and sharing your thoughts! I hope Betterment works out well for you!

  • August 30, 2013 - 2:53 pm | Permalink

    I’ve never heard of Betterment until now. Thanks for the heads up and I’ll have to check it out. Investing is something I need to learn to do very soon!
    Dear Debt recently posted…Debt, I’m sick and tired of youMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:23 am | Permalink

      My pleasure Dear Debt, thanks for stopping by. I’m learning as I go…if there’s anything I can do to help you along in your journey, please let me know!

  • August 30, 2013 - 3:08 pm | Permalink

    Congrats on starting your investment journey. I just heard betterment . com from you and so I will check it out
    Demaish @ Borrowed Cents recently posted…The three paycheck month equals winningMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:24 am | Permalink

      Thanks Demaish, Betterment is great! I hope it works out for you!

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  • August 30, 2013 - 7:12 pm | Permalink

    Hi Josh,
    Do you contribute to Betterment instead of a 401K or do you supplement it. Couldn’t you buy a Vanguard balanced fund from Vanguard themselves and pay lower expense fees? It looks like Betterment uses a lot of Vanguard funds, then charges a fee on top of it.
    charles@gettingarichlife recently posted…Complaints From A Negative Net Worth 47 Year OldMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:26 am | Permalink

      Hey Charles, from what I understand, Betterment breaks your money down into a few different types of advertisements. I don’t know if they can all be categorized overall as Vanguard funds, that would be an interesting thing to learn though. As far as buying Vanguard Balanced Funds personally, I wouldn’t know the first place to start. That’s why Betterment is so great for me. I don’t have to know how to invest to be successful at it. Or, at least that’s what they say, I’ll keep you posted on how it goes in the long run. Thanks for your comment!

  • August 31, 2013 - 3:05 am | Permalink

    I’ve heard a lot about betterment in the PF sphere, but I haven’t really looked into it. I don’t even know if it’s in Canada!
    SuburbanFInance recently posted…A Closer Look at The Shopping EnvironmentMy Profile

    • Joshua Rodriguez
      August 31, 2013 - 8:28 am | Permalink

      Hey Suburban Finance, thanks for swinging by! To the best of my knowledge, anyone can use Betterment but, that’s my right off the top of my head answer. I’ll do some digging within the next few days and see what the real answer should be. Thanks again!

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  • September 5, 2013 - 11:35 pm | Permalink

    Good stuff. I wrote a pretty favorable review of Betterment. They are a good company based on sound principles. Only way to go cheaper is probably some form of DIY investing.
    Jacob @ Cash Cow Couple recently posted…Understanding How the Stock Market WorksMy Profile

    • Joshua Rodriguez
      September 6, 2013 - 9:54 pm | Permalink

      Hey Jacob, thanks for swinging by! I think I saw your review of Betterment. I’ve gotta agree with you, the only way to go cheaper is DIY! Thanks!

  • September 17, 2013 - 7:21 pm | Permalink

    I’ll have to look more into Betterment. I’ve been doing my own investments through Schwab, keeping it simple, no fees- but as I get older (and hopefully make more money) I’d like to explore some other options.
    Stefanie @ The Broke and Beautiful Life recently posted…“Oh Shit, Yeah That Thing” BudgetingMy Profile

  • September 18, 2013 - 4:46 pm | Permalink

    This sounds like a really good investment, I have invested in many profitable ventures in my life time. I feel this is one I could get behind.

  • October 2, 2013 - 3:35 am | Permalink

    Whoa thanks for the shout outs Josh!! Sorry it took so long to see this, I’ve been caught up in a bunch of things this past month and haven’t had much time to do blogging or much reading of other blogs. Thanks for the link love, was not expecting that when I opened this post lol.

    I’ve been using Etrade for most of my investment items and my track record has not exactly been great managing things myself. Will have to look into Betterment. I’ve heard of other people talking about it as well but hadn’t really paid attention to it. Might be time to hand over the management reigns lol
    thepotatohead recently posted…Keeping Up With The RosesMy Profile

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