[0] https://www.bogleheads.org/wiki/Bogleheads%C2%AE_investment_...
EDIT: I'd still love for Vanguard to create Betterment's version of RetireGuide, which takes into account your income and various other financial parameters, and tells you how much to save in which accounts (tax deferred, 401k, etc). I'm a sucker for sexy UX.
I've always liked that idea as an alternative to doubling down with entrepreneurship. There's always the constant internal debate between both paths. It's nice to have a good guide to map out how to accomplish it, as the investment path comes with much more certainty if you have the right amount of self-control.
More focused on the hows of the saving than the goal of it. Although there's some overlap it isn't the same type of community as something like Mr. Mustache Man that emphasizes a specific life-plan (in that case very early retirement).
It's a helpful community. Sometimes a bit doctrinaire about "rules of thumb" that are very useful for many people, but aren't exactly laws of the universe, but that's hardly the worst thing in the world.
Don't be a trader, but don't have a religious acolyte of someone's investment philosophy. Most quarters my portfolios are growing 2-3x than my contributions. It's a great feeling.
Anyway, investing a portion of each paycheck turned out to be too much repetitive work, so I wrote a cron job to do it for me automatically (more work, but more interesting work!). Then, I added automatic tax-loss harvesting once Betterment added theirs. Then, some friends wanted to use it, so I built a UI.
I'm thinking about releasing it to the public. To do that, I would have to become a registered investment advisor, but that's not a big deal - just taking a test and filling out some paperwork. Would anyone be interested in paying $10/month for this service? I'm currently working on setting up a marketing site explaining what this thing does: https://zenve.st
The Bogleheads forum is also often very useful for getting your personal finance questions answered, though of course the usual Internet stranger disclaimer applies.
It basically follows the Bogleheads approach: https://www.bogleheads.org/wiki/Getting_started
You get roughly your age as the percentage invested in bonds, with some adjustments up or down for risk tolerance. For taxable accounts, the bonds will be VTEB (tax-free munis). For nontaxable accounts, the bonds will be VCIT/VWOB (corporate bonds / emerging market bonds). The stock ETFs are VTI (US), VEA (foreign developed), and VWO (emerging markets). Nontaxable accounts also get VNQ (real estate), based on how much real estate you already own.
For example, my taxable account is: 60% VTI, 18% VEA, 12% VWO, 10% VTEB
Tax-loss harvesting is a bit tricky. In order to tax-loss harvest, you have to sell one ETF and buy another correlated ETF. This is usually done by purchasing another company's ETFs (ex: Schwab). Unfortunately, while Vanguard charges no fees for its own ETFs, it does charge fees for others' ETFs.
The algorithm takes this into account though, so it only initiates a harvest if the tax refund you'd get is significantly larger than the cost of buying the non-vanguard ETF. In order to make this cheaper, VTI is paired with VOO - even though the index tracked is different, they are highly correlated with each other (>99%).
VTI (Total US Stock market) / VOO (S&P 500)
VEA (FTSE Developed All Cap ex US, 3735 stocks) / SCHF (FTSE Developed ex-US, 1471 stocks)
VWO (FTSE Emerging Markets All Cap China) / SCHE (FTSE Emerging Index)
I am personally not willing to pay monthly, and definitely not willing to share brokerage credentials, with a SaaS version.
The information you may find about tax-loss harvesting gains on the internet is usually incorrect if it comes from people trying to sell you something. For example, Betterment / Wealthfront claim that it adds an extra 1% of returns (only if you have a $100,000 portfolio and your marginal tax rate is 33%, which are the assumptions they use to get that number). On the other hand, human investment advisors are generating FUD about tax-loss harvesting[1][2], because they want to discourage people from requesting that service.
[1] http://www.cnbc.com/2014/10/24/weighing-the-pros-and-cons-of...
[2] https://www.kitces.com/blog/is-capital-loss-harvesting-overv...
0.25% a month would be really really high!
https://support.wealthfront.com/hc/en-us/articles/209353226-...
The securities appeared in my Fidelity account, and the cost basis information populated a few days later. It also doesn't trigger a taxable event, and there were no fees for transferring out of Wealthfront.
Disclosure: I work with numbers at WiseBanyan. Our business model charges a la carte for extra services (tax loss harvesting, for example), so you basically pay for what you actually want.
[1] You must stay invested for 30 days.
If you have enough money (typically $10k) to invest, then you can buy the Admiral Shares of the mutual fund, which has the same expense ratio as the ETF, but won't require you to pay a bid-ask spread to buy or sell.
If you start with the Investor Shares and end up with more than $10k in the fund eventually, you can always convert them up to Admiral Shares without tax implications. You can't convert ETF to Admiral Shares without selling though.
If you don't think you'll have $10k in the fund anytime soon, then the ETF is likely the cheaper option. However, the difference is practically really small - for a $9000 investment, you'll pay $4.50 per year in expenses for the VTI ETF vs. $14.40 for the VTSMX fund.
[1] https://advisors.vanguard.com/VGApp/iip/site/advisor/investm...
The conclusion most of my colleagues have come to is the roboadvisors don't really offer much beyond Vanguard target date funds. The roboadvisors seem to be failing to acquire significant assets.
Not much of a difference, but it was enough to prompt me to shift my auto deposits from one to the other (still have stuff in both).
The institutional funds that some 401ks carry can be cheaper than what's available to the general public. I'm pretty sure the Vanguard S&P 500 fund in my 401k is at 0.03%. The government employee Thrift Savings Plan's C fund charges 0.029% for an S&P 500 fund, managed by Blackrock, but I don't think you'll get that as a member of the general public. I'm sure you could find Fidelity and other funds in similar situations.
This is all somewhat relevant since those of us in the US can contribute many more tax-free dollars to our 401ks than our IRAs, sadly.
Some of Vanguard's funds have corresponding ETFs, which hold the exact same investments the funds do, and usually offer the low expense ratio of the Admiral fund shares with no minimum investment.
Perhaps that's why Schwab has a fee free robo advisor, and surely every other brokerage and bank is working on the same thing.
I'm guessing the dedicated robo-advisors will end up being the cheapest services, since they're online only and don't need to keep all those bank buildings and old guys in suits around.