BETTERMENT REVIEW 2019 📈 Best Robo Investing Platform?


– Hello once again, guys,
welcome back to the channel. Hope you’re havin’ a great day so far. So, what we’re gonna be
doing in this video today is doing a review of the
Betterment investing platform. Now, if you’ve been watching my channel for a while, you know that I did a review of this platform
back in July of 2018, but since then there have been a number of different
updates to this platform and new features entirely,
and so I wanted to go ahead and do an update of that
review and talk more about specifically some of these new features and what they are offering to investors. Now, if you guys do decide
that you want to sign up for a Betterment account,
I do have a link. It is the top link in
the description below. This is an affiliate link,
you guys don’t have to use it if you don’t want to, but it
certainly does help me out and helps to support my channel and allows me to make
more videos like this. And if you are looking to
learn more about Betterment, I have a link to that other review video in the description below, as well as an in-depth article I’ve done on my blog that’s a more comprehensive
review of Betterment. But there are two main things I wanna focus on within this review. Number one: the passive investing strategy that Betterment is offering to investors, and then number two: a
completely new feature they’ve added to their
platform called Smart Saver. That requires a little
bit of an explanation to understand how this could benefit you. So, number one, let’s
start off by talking about the passive investing that
Betterment is offering and ultimately who are they going after? Who is the target market for Betterment? So, what Betterment is offering is goal-based passive investing. Now, by passive investing, I mean you’re not actively involved with it. You’re not out there selecting stocks, you’re not picking funds, you’re not rebalancing your portfolio, you’re essentially doing nothing and allowing Betterment to take
of all of that work for you for a small annual fee. Now, that fee for Betterment
is 0.25% for the digital plan or if you are interested
in Betterment Premium, which is for people who have
a larger account balance, that is a 0.4% annual fee. Now, a lot of people hear that and there are all these different fee-free investing platforms out there, and they go, “Wait a second, “why would I want to
invest with Betterment?” but they are offering a number of features that are quite helpful to
investors and, in some cases, they will offset that 0.25% annual fee. So, this is basically how it’s
gonna work with Betterment. Once you open an account with them, they’re going to build a
custom portfolio based on you. Based on whatever your goals are. So, if you’re looking to save for college, if you’re looking to save for retirement, whatever it is you’re looking to do, you’re gonna tell
Betterment, “Here’s my goal. “Here’s my current income situation,” and they’re going to
build a portfolio for you and help you stay on
track to meet your goal. A lot of people don’t
have this frame of mind when it comes to investing. They don’t think of their
goal at the end of the day. But, goal-based investing
really does make a lot of sense because you understand
where you are today, you understand where you’re
looking to get eventually, and this will help you
break it down into steps that you can take
day-by-day, or week-by-week. So, once you set up your portfolio, Bettrment manages the
entire portfolio for you. All you have to do is
continue to contribute and add more money to it. They’re going to allocate the portfolio, they’re going to reallocate
it as your risk changes. As you get older, for example,
you want less and less risk involved in that portfolio, and they’re also going to rebalance it. So, as your portfolio gets out of whack because not all these
assets are going to be doing the same thing at the same time, Betterment is going to
rebalance your portfolio making sure you’re not
overweight or underweight in certain assets. Now, above and beyond that,
Betterment also offers automated tax-loss harvesting, which is one of these features
that can save investors a substantial amount of money. And, this is kinda a complicated subject, I’m not get into it in this video, but we talked more about
tax-loss harvesting in my review, but essentially, it’s a way for Betterment to find ways to cut down on your tax bill at the end of the year by recognizing small capital
losses on your investments. And this is something
being offered by Betterment that you’re not gonna find with comparable free-investing
platforms out there. Now, one of the biggest
perks of Betterment is that they have a $0 minimum balance, meaning if you have $5 or $100 and you want a well-balanced,
diversified portfolio, they will build that for you. And this is kinda the gap that Betterment is looking to fill here, is people that want professional
guidance with their money but they don’t have enough
to go to a financial advisor. If you go to a financial
advisor with $100 bill and you say, “Hey, I’d like
you to invest this for me.” they’re gonna laugh and tell you to go buy lunch or go buy dinner because it’s not worth it for
them to take on that account because they’re actively involved. Since Betterment is a robo-advisor, it doesn’t cost them any more money to add new accounts to the system, meaning that they can take on
as small accounts as possible. They could take on someone with $5 if someone absolutely wanted to do that. So, Betterment essentially
fills that gap there of people who are looking
for guidance with their money but they may not have enough
to go to a financial advisor, or it’s people who are fee-sensitive and they don’t want to be paying 0.1% to a financial advisor. And then Betterment is
going to take your money and they’re going to be investing it in low-fee index funds, they typically use Vanguard products or iShares products, and these are some of the best
index funds on the market, and that’s ultimately
going to help you keep more of your hard-earned
money and pay less in fees. So, that is the Betterment goal-based passive investing in a nutshell. Number two, let’s talk about
a big game-changer here and something totally new to this review, and that is Betterment’s Smart Saver. Betterment’s Smart Saver is essentially an automated cash management solution, and it gives us a good
answer to that question of what do we do with our savings? What do we do with our emergency fund? Because a lot of us have savings or we have an emergency fund, and we don’t want to
invest that in the market because we’re gonna need
that money in the short term, but we also don’t wanna leave that money sitting in our bank account
being deteriorated by inflation. So, that is where Betterment’s
Smart Saver offers a really good solution to that,
which is taking that money and investing it in very
low-risk short-term bonds. So, this is bascially how
Betterment’s Smart Saver works. It’s optional, meaning
you don’t have to use it if you don’t want to as
a Betterment customer, but basically, once you start off, you connect Smart Saver
to your bank account, and then your spending
is going to be analyzed. Once they have an idea of how
much money you’re spending every single month, they’re
going to start sweeping the extra cash into your
Betterment account automatically and they’re gonna be analyzing
the levels of your accounts. So, if your checking account gets too low, they will automatically
move more money back into your bank account, that way you don’t have to worry about overdraft or any issues like that. But what they’re doing is
they’re taking that money and investing it in very low-risk bonds. It’s a portfolio of
short-term U.S. treasuries and short-term corporate bonds. Now, right now, that is
paying an after fee yield of over 2%, the yield changes
every once in a while, so I’m gonna have a link
down below where you guys can click and see the updated
yield for Smart Saver, but the most important part here is that you’re earning a return on your cash, you’re keeping it where it’s still a pretty liquid investment
that you have easy access to, and you’re not losing your
buying power due to inflation. Now, I’ve actually met
the people at Betterment, I’ve been down to their
New York City office, it’s a really amazing
place, and I remember sitting down with them and
talking about Smart Saver and what they’re looking to build here, and they’re best analogy for me is that this is like the self-driving wallet, where you don’t ever
have to really open up your bank account because
everything is moving on it’s own. The money’s automatically
being swept into Smart Saver, that way you’re savings
are earning interest, and it’s going automatically back into your account to
pay your bills, that way your buying power is being protected. And you can also fully
automate your investing with Betterment where maybe
you wanna do $50 a week or $500 a month, you
can essentially automate the entire process and then never have to think about your investments. So, my best way to explain Betterment is it’s peace of mind for 0.25%. So, if you’re comfortable with paying that 0.25% asset fee or
management fee per year, you essentially don’t have to
think about your investments at all or your uninvested cash. You know that Betterment is helping you preserve your buying
power with Smart Saver, and they’re investing your
money in a goal-based, passive investing
portfolio and helping you eventually realize your goals. But anyways, guys, that’s gonna wrap up this review video here. That is essentially what
Betterment is offering. And, a lot of people using this service are people that have a
small amount of money, they want some professional guidance but they don’t have enough
to go to a financial advisor or they just don’t want
to pay the high fees. They would rather have
an automated solution that is not costing them
nearly as much money. And like I said, if you do want to learn more about Betterment, I have my full review article
in the description below, and if you do decide you wanna sign up, it is the top link in
the description below if you guys wanna help me out
and use my affiliate link, but again, that is totally optional. Thanks so much for watching this video, I hope you enjoyed it. If you did, make sure you drop a like and I will do my best
to answer any questions you guys have as well, so go ahead and leave your comments down below. But if not, I will see
you in the next video, and I hope you have a
great rest of your day.

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