SmartAsset (YCS12) Raises Money to Provide Financial Advice
techcrunch.com
techcrunch.com
I just tried it again. It continues to be a mess. I tried the "better to rent or buy" comparison. I input information about my income, my rent, and my available cash.
I get a chart that says the two are almost equal over a long period, given a house value of $393k. I click on the "change" link by the house value to try playing with it. I get a popup that has the value (which I can't seem to change), a slider below for the down payment, which says $14k above and "10% of home value" below. Note that 10% of $393k is not $14k. Below that, another slider that says mortgage value, and has $379k above it and "30 year mortgage at 2.75%" below. As soon as I adjust the down payment slider, the percentage corrects to where it actually should be. But changing the slider changes the value of the house! Apparently the way to adjust the price of the house is to fiddle with both the mortgage amount slider and the down payment slider. Also, the numbers change colors. I assume red is bad and green is good, but I'm not sure what exactly the color signifies.
I get things to something reasonable and go to check the chart. Here's what I see off to the side for the 30 year summary
If you rent Income $5,989,000 Rent $555,000 Expenses $533,000 Income Tax $1,942,000 Net Wealth $2,997,000
If you buy Income $5,802,000 Home Equity $464,000 Home Payments $378,000 Expenses $946,000 Income Tax $1,841,000 Net Wealth $3,140,000
Why is my income $187k more when I rent? Did I get a side job instead of mowing the lawn at my hypothetical house? What about other investments? Maybe that's why my income is higher when renting? None of this is explained.
I read down below, and it seems to think I live in Littleton, CO. I guess that's the default? Since tax rates vary so widely, it seems weird to have a default location rather than ask me that at the beginning. Oh well, I click on the location bar and enter my zip code. The first time, it pops up with the city name, and I click Done. The city name goes away and the text telling me to enter zip code or city name stands out in red. I try the zip code again. No dice. There's a "where do you live" field, and a "where do you want to live" field. Not sure why we need two of those. Which one will show up in the results? Ah, apparently, the first one is where you're renting, the second is where you might buy. I guess that's useful. Why aren't the two boxes called "Rental location" and "Purchase location"?
Overall, it seems like a complete mess.
I submitted this feedback via their website as well. I hope they make this awesome, since I definitely like the idea.
On the change in your income. When you buy a property there is an opportunity cost associated with the cash that you use to purchase the property (down payment + closing costs). This money would have accrued interest income had you continued to rent, hence the larger value for income in the rent scenario.