Updates are always the bottom!
For a while now I have thought about investing and how I have not been doing that. I do have a savings account and my “free” checking account, yet I don’t think I have made enough money to buy the icy they sell on the streets on NYC which cost $1. Having a savings account beats the alternative of a matters, your money is safe and you get a couple of cents in interest over time. Yet what happens to that money? The bank uses it to invest big time and makes a lot of profit.
So recently I have read blogs, websites and what not and I have decided to start with Betterment and Acorns. So far Betterment is doing better. I started with $20 in the evening of 5/19/2015 with a 30 days free account management. Today 5/20/2015 I have already increased that to one cent and all I did was sleep at night and wake up the next day. I know that it could have been a loss instead of a gain and that I should focus on long-term instead of short-term but for the moment I’m testing for a year to see how things develop and if I should continue with the services.
As for Acorns, I’m still waiting for my identity verification. I had to send a photo of my state I.D. and proof of address. This is fine but apparently the first try the quality was not good and now they are going to verify manually so I have to wait. I made the same first investment of $20 but so far that money is not yet funded until they verify my identity and this means wasted time for investment.
Betterment offers retirement advice and even allows me to open IRAs, and overall what seems like more options for saving/investing as I can add goals. My current goal is for wealth procurement. I want to learn a bit more about traditional IRA and Roth IRA before I create one. As a self-employed single man with low-income in NYC, I was recommended to open up a ROTH IRA and even the amount I should save annually to meet the goal, their RetireGuide also calculates inflation, and how much you would spend and a whole bunch of other things that I’m not yet proficient.
Both services allows you to decided your investment risk tolerance, so far I’m sticking for Moderate as I’m not investing a lot of money yet. My personal favorite at the moment is Betterment since it started working first, and has provided with plenty of advice, intuitive UX/UI and great advise and help. I will keep updating this post in the future as things develop. I’ll probably stick to only one of the services. Might as well learn about taxes and investing as it seems my taxes will only get more complicated with time.
Also, if you want to try Betterment out, please use the links I have provided as it would give us both 30 days free of charge. They fees are very low, you can find more about that here. However, free time period to try it out is always great.
Today finally I got asked by Acorns to very two small deposits on my bank account. With that done it is a matter of putting money. I ended up cancelling the first investment because it has taken so long for them to verify my information (it had to be done manually because the first time I sent photos of my documents the resolution was not the best.) This means that soon enough I will be able to see for myself how good they are.
As for betterment, I decided to open a ROTH IRA for retirement. Now I have one account for wealth building and another for retirement with automatic deposits monthly. I’m still staying small instead of moving all my saved up money in one go. last week closed with a negative balance on my Betterment account and I check and the stock went down on most of them which would explain my loses. This week it has gone up and down but it is still at a negative balance. Given that the way Betterment works is for long-term investment and not short-term so I am not worried.
By now I have removed my money from Acorns, and opened a safety net portfolio with Betterment with a 60-40 ratio of bonds and stock. Oddly enough, this is the one with the lest money invested and the only one that has provided extra money without dividends or extra deposits. By now I have near 2,000 invested across the board and the stock market seems to be doing well, at least most of the stocks in my portfolio so the ROTH IRA and the build wealth portfolios are steadily going up in value and negating any money lost, and there is still the dividends that they have provided me while not that munch on their own, it has already increase many times over the interest they gain on a savings account, from 11 cents to up to 5 dollars in one go. However, it is important to note that while dividends get reinvested automatically, they are still counted on the overall gains and loss along with any fees from Betterment. The fees all together has been less than 50 cent, far less.
Turns out that Acorns is now free for students and people under 24 years old. Given my age it is not free for me so I do not regret taking my money out. You can take all your money out and the account will stay open for free until you put money in which is convenient in case I decide to use their services in the future.
Today they have launched new smart-deposit function that lets you choose the maximum amount of money that you should have on your checking account, the maximum amount of money that they can automatically invest and to which portfolio you want the money to go (IRA’s are not available for this) and each week they will check your balance and take into consideration the parameters mentioned already and also any auto-deposit that you have so when they activated, you do not go over the limit set. That is something I might use in the near future, after I figure out if I should wait for the stock to go down or buy now while it is still increasing to put more money. After all there is an advantage for buying while the value is lower, particularly for the long-term investor.
Here is an overview to show what I’m saying.
Referral Link: Betterment if you find my personal experience useful and decide to open up an account, please consider using my link as it will help me get more time fees free and will also give you 30 days to try their services for free, free meaning no fees.