Republic Wireless Review: New Phone + 3 Months Service $89 or Free SIM + Free 1st Month

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

rw2018freesimUpdated 2018. Republic Wireless is a T-Mobile MVNO that reduces costs by using WiFi for calls and texts whenever possible. They have settled into the simple pricing structure below, with no contracts.

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The best value plans allow a single user to pay $20/month for unlimited talk/text/1 GB LTE and $25/month for unlimited talk/text/2 GB LTE. The nice thing about these pay-for-what-you-use plans is that you save money on the months where you use very little data, as opposed to always buying the plan where you know you won’t pay for overages.

Buy new phone, get 3 free months of service (phones start at $89). Get 3 free months of service if you buy a new phone and activate a new line. This is with the Unlimited Talk/Text + 1 GB Data plan, so that’s $20 x 3 = $60 value for free. New phones start at only $89 for the Alcatel A30 Android phone. Moto E is $129.

Bring your own phone + Free SIM card + 1 free month of service. Right now, they are offering a Free SIM card + Free Shipping + Free 1st Month of Service. This is with the Unlimited Talk/Text + 1 GB Data plan ($20 value). If you use more data, you pay the difference. Taxes and telecom fees are not included. The idea is that you can swap out the SIM card in your phone and try them out with no obligation. You must activate by 6/30/18.

Phone options. You can either buy a phone from them or bring your GSM unlocked phone and use their SIM card. There are still no Apple phones on the list. Below is a partial list of eligible phones. The best thing to do is use their phone checker.

  • Google Pixel
  • Google Pixel XL
  • Google Pixel 2
  • Google Pixel 2 XL
  • Samsung Galaxy S8
  • Samsung Galaxy S9
  • Samsung Galaxy J7
  • Samsung Galaxy S7 Edge
  • Samsung Galaxy S7
  • Samsung Galaxy J3
  • Samsung Galaxy S6
  • Nexus 6P by Huawei
  • Nexus 6 by Motorola
  • Nexus 5X by LG
  • Moto X Pure Edition
  • Moto X4
  • Moto G5S Plus
  • Moto G5 Plus
  • Moto E4
  • Moto E4 Plus
  • Moto G4
  • Moto G4 Plus
  • Moto G4 Play
  • Moto Z
  • Moto Z Play

Bottom line. Republic Wireless now allows you to bring your own unlocked GSM phone for use on WiFi and T-Mobile LTE networks. Right now, they are offering a free SIM + free month of service to try them out for free. Apple phones are not eligible. The cost is straightforward: $15 for unlimited talk/text and $5 per GB of data used, making it best for modest data users.

If you are willing to buy several months of service at once (or have an Apple phone), also check out Mint Mobile (formerly MintSIM).

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Betterment Review: Customized Asset Allocation, Human Financial Advisors

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

bment1707_0Updated April 2018 with custom ETF allocations. Betterment is an independent hybrid digital/human advisor that will manage a diversified mix of low-cost index funds and help you decide how much you’ll need to save for retirement. (By independent, I mean that they are not tied to a specific brand of funds like Vanguard or Schwab). Betterment is also an RIA, which means they have a legal fiduciary duty to keep client interests first. They frequently announce new features and improvements, so I will work to keep this feature list updated.

Diversified portfolio of high-quality, low-cost ETFs. Their portfolios are a diversified mix of several asset classes including: US Total, US Large Value, US Mid Value, US Small Value, International Developed, Emerging Markets, US Corporate Bonds, US Total Bond, Inflation-Protected Treasuries, Muni Bonds, International Bonds, and Emerging Market Bonds. For the most part, Vanguard and iShares ETFs are used.

The traditional Betterment portfolio has a more pronounced tilt towards the size premium and value premium than the cap-weighted indexes. You could argue the finer points of whether this will really create higher risk-adjusted returns, but overall it is backed by academic research. Betterment has also added a Socially Responsible Investing (SRI) portfolio option.

In April 2018, Betterment added Flexible Portfolios which lets you manually adjust the percentages of each asset class. As a DIY investor with assets spread across multiple accounts, this customization has been something I’ve been waiting for. This option is currently available only to clients with $100,000+ in assets.

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Both the SRI and Flexible Portfolio options will work with Tax Loss Harvesting and Tax Coordination features (see below).

Free access to human advice for everyone. In July 2017, Betterment announced that all of their customers can message a licensed financial experts. Digital members (0.25% annual fee) can ask questions any time via their mobile app. Digital members should expect an answer in approximately one business day. Betterment Premium members (0.40% annual fee) have unlimited e-mail and direct phone access to “Certified Financial Planner professionals”. From their press release:

Our experts can assist with deciding which funds to move to Betterment, setting goals (like saving for college, a house, or retirement), and identifying which Betterment tax features may be right. They can also help you make important investment decisions, like choosing risk levels, amounts to invest, and types of accounts.

Reading between the lines, Digital members get “licensed financial experts” while Premium members get “Certified Financial Planner professionals”. This suggests that while Digital members will still get fiduciary (client-first) advice, Premium members will get priority access to the more-experienced advisors in exchange for paying their higher fee.

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Retirement planning software with external account balances. RetireGuide is Betterment’s retirement planning software, first launched in April 2015. This service links your external accounts from other banks, brokerages, and 401k plans (similar to Mint and Personal Capital) in order to see your balances without having to manually input them. According to their methodology guide [pdf], they don’t analyze your transactions to estimate savings rate, they are just pulling in balances.

Example questions: How much do I have invested elsewhere? Am I saving enough money? How much estimated income will I have in retirement? Your future Social Security income is estimated for your based on your chosen retirement age and birthdate. You can change many of the variables as you like.

Account types. Betterment now supports taxable joint accounts, trust accounts, 401k rollovers, Traditional IRAs, Roth IRAs, SEP IRAs, and Inherited IRAs.

Tax-efficent asset location. Tax-Coordinated Portfolio will place different asset classes in your taxable accounts vs. tax-deferred accounts (IRAs, 401ks) for a higher after-tax return. In addition, if you have multiple types of accounts at Betterment (i.e. both IRA and taxable), it will manage multiple accounts as a single portfolio, placing assets that are taxed more into more favorably taxed accounts (like IRAs). Note that this only works across accounts that are held at Betterment. It does not adjust for non-Betterment accounts. This is called their Tax-Coordinated Portfolio (TCP).

Use dividends and new contributions to rebalance. They will use your dividends and new contributions to rebalance your asset classes in order to minimize sells and thus minimize capital gains.

Daily tax-loss harvesting. Betterment’s Tax-loss Harvesting+ (TLH+) software monitors your holdings daily and attempts to find opportunities to harvest tax losses by switching between “similar but not substantially identical” ETFs. If you can delay paying taxes and reinvest them, this can result in a greater after-tax return. The exact “tax alpha” of this practice depends on multiple factors like portfolio size and tax brackets. You can read the Betterment side of things in their whitepaper. Here is an outside viewpoint arguing for more conservative estimates.

My opinion is that there is long-term value in tax-loss harvesting and especially daily monitoring to capture more losses. However, I also think it’s wise to use a conservative assumption as to the size of that value. (DIY investors can perform their own tax-loss harvesting as well on a less-frequent basis. I do it myself, but it’s rather tedious and I’m definitely not doing it more often than once a year. I would gladly leave it to the bots if it was cheap enough.)

Invest your excess cash automatically. Automatic contributions are good, but perhaps you don’t want to commit to a set amount each month. (Ideally, you do commit to a set amount, and this service invests more money on top of that.) Called SmartDeposit, you link your checking account and choose your Checking Account Ceiling and Max Deposit amount. If your checking account balance goes above the ceiling, Betterment will automatically sweep over money and invest it for you. Betterment will account for future scheduled deposits so you don’t over-contribute.

Fee schedule. Betterment has a fee structure with two tiers.

  • Betterment Digital. No minimum balance. Digital portfolio management and guidance. Unlimited access to “licensed financial experts” via mobile app with ~1 business day turnaround time. Flat fee of 0.25% of assets annually. The management fee on any assets over $2 million is waived.
  • Betterment Premium. $100,000 minimum balance. Digital portfolio management and guidance. Unlimited access to “CFP professionals” financial experts” via e-mail or phone. Includes more in-depth advice on investments outside of Betterment. Flat fee of 0.40% of assets annually. The management fee on any assets over $2 million is waived.

In my opinion, the main concern of any outside advisor is the same: you are handing over control to someone else. Betterment could change their investment philosophy, their pricing structure, and feature set in the future. Digital advisors are constantly changing, and some of their new features could be great or it could just be a fad.

Bottom line. Betterment is an independent digital advisory firm with nearly $10 billion in assets, which means they aren’t tied to any specific brand of funds like Vanguard, Fidelity, or Schwab. Their main differentiators from the other independent firms (see my Wealthfront review) are (1) access to human advice available to all customers and now (2) the ability to customize your target asset allocation ($100k+ in assets). Other notable features include: Retirement planning software that syncs with external accounts, tax-loss harvesting, tax-coordinated portfolios (when you have both IRA/401k and taxable at Betterment), and SmartDeposit which automatically invests excess cash from your checking account.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Amazon Prime Rewards Visa Signature Card Review: 5% Back at Amazon + Whole Foods

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

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Chase and Amazon have rolled out the Amazon Prime Rewards Visa Signature Card, a credit card (not store card) available only to Amazon Prime members. Highlights:

  • 5% back at Amazon.com and Whole Foods Market for Amazon Prime members. If you stop your Prime membership, you’ll be downgraded to 3% back.
  • 2% Back at restaurants, gas stations, and drugstores.
  • 1% Back on all other purchases.
  • Sign-up bonus of variable amount based on each person’s account. I was offered a $70 Amazon Gift Certificate. Click on the “Apply Now” link to see your personalized offer, you’ll have time to stop the application.
  • No foreign transaction fees.
  • No annual fee.
  • Extended warranty protection. Extends the time period for the U.S. manufacturer’s warranty by an additional year, on eligible warranties of three years or less.
  • Purchase Protection. Covers your new purchases for 120 days against damage or theft up to $500 per claim and $50,000 per account.

Existing Amazon Rewards Visa Signature cardholder? If you have the original card and are an Amazon Prime subscriber, you should be “upgraded” to this new card automatically. You may see the change online first (your linked purchases will start earning 5% back instead of just 3% back) before you actually receive a new physical card.

Commentary. I recently did a Amazon Store Card review, about a retail card issued by Synchrony Bank that was only valid at Amazon.com. My overall opinion of this credit card is similar, except for the extended warranty protection. If you use gift cards to buy things at Amazon, you will forgo the extended warranty protection and purchase protection that many other credit cards offer. With this card, you will get the extended warranty protection and 5% cash back. How much is an extra year’s warranty worth? Depends on how many big-ticket items you buy at Amazon and how likely you’ll actually remember to use this benefit.

My rough rule of thumb is that a “hard” credit check can reliably net me at least $500 in value, usually from credit card sign-up bonuses but also potentially from bank bonuses and higher interest. It is very rare that I shop at any specific retailer enough to get $500 in savings. For example, it would take $10,000 of Amazon purchases at 5% back to net me $500 in cash back. (2% back at restaurants, gas stations, and drugstores only draws a yawn when I can get that much cash back on everything. 1% cash back on everything else… zzzz.)

Now, the addition of the 5% back at Whole Foods adds a wrinkle for those that shop at Whole Foods regularly. If you were only getting 2% back before, now 5% on the combined spending at Amazon and Whole Foods might become more compelling.

For the casual Amazon shopper, 5% rotating category credit cards often have Amazon or a place that sells Amazon gift cards as an eligible category. Other cards like the American Express Blue Cash Preferred offer 6% back at grocery stores (that sell Amazon gift cards) or Chase Ink Business cards offer 5% back at office supply stores (that sell Amazon gift cards). Basically, there are other ways that I can stock up on Amazon gift cards at 5% off without having this card.

Bottom line. If you are a loyal Prime member that spends a lot of money at Amazon and/or Whole Foods and prefer simplicity, the Amazon Prime Rewards Visa Signature Card can add up to serious rewards. Be sure to make it your default card for your Amazon account. You can then track all your Amazon spending on one card, and also get extended warranty protection and purchase protection. As with any rewards credit card, you should always pay off your bill in full as the annual interest rate on balances is significantly higher than 5%.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Robinhood App Review: Free Stock Trades, Free Options Trading, No Minimum Balance

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

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Updated. Robinhood is one of the new wave of brokerage apps. They started with free stocks trades, but have since expanded their suite of services to the following:

  • Free stock and ETF trades. No minimum balance requirement.
  • Free options trading. No commission and no per contract fee, plus no exercise or assignment fees.
  • Free trading of Bitcoin and other cryptocurrencies 24/7.
  • Free share of stock for new users with referral.

Top alternatives to Robinhood.

  • WeBull (free stock bonus). WeBull app is also good for active traders with free stock trades and free options trades, but adds a real customer service phone number where you can talk to a human, as opposed to Robinhood’s email address.
  • SoFi Invest ($75 bonus). SoFi also offers free stock trades and “slices” (fractional shares), along with a sign-up bonus and free tickets to events (SoFi is short for Social Finance).
  • Firstrade. Firstrade includes free trades of mutual funds, which is rare… if that is your thing.

Background. I’ve been Robinhood beta user since mid-2014. I was skeptical as I’ve been an long-time early adopter of free trading platforms (read: cheapskate investor). In August 2015, they rolled out both iOS and Android app and reported processing over 2 million free trades. In 2017, they reached over a million users. In 2017, Bloomberg reported them raising money at a $1.3 billion valuation. In 2020, CNBC reported them raising money at an $8 billion valuation!

Application process. You must provide your personal information including Social Security number, net worth, income, investing experience, etc. This is the same as any other brokerage firm, but this may also be the first such account for many users. Everything was done online; there were no paper documents that required mailing or faxing.

Core features review.

  • Legit. Robinhood Financial is a member of the SIPC which protects the securities in your account up to $500,000. Data is encrypted with SSL. Apex is their clearing firm.
  • $0 commission trades. Yes, it works, all with no minimum balance requirement.
  • Market orders, limit orders, stop limit orders, and stop orders available. Certain orders may be entered as good for the day or good till canceled (GTC).
  • No short-selling.
  • Free options trading: No commission and no per contract fee upon buying or selling options, as well as no exercise or assignment fees. Level 2 self-directed options strategies (buying calls and puts, selling covered calls and puts) as well as Level 3 self-directed options strategies such as fixed-risk spreads (credit spreads, iron condors), and other advanced trading strategies are available.
  • Customer service limitations. The Robinhood customer service phone number is (650) 940-2700 during during market hours (9:30am – 4:00pm EST), however many readers have reported difficulty getting through. (Update: I no longer see any mention of this phone number on their website.) They want you to use their customer service email “support@robinhood.com”. The lack of instant customer service via phone is one major way that Robinhood is not the same as a major brokerage account like Fidelity or Schwab.

Funds transfers. You can manually link any bank account with your routing number and account number, but you can also directly use your username and password at these banks: Chase, Bank of America, Citibank, Wells Fargo, U.S. Bank, Charles Schwab, PNC, Silicon Vally Bank, and USAA. ACH transfers are free and take approximately 3 business days (same as other brokerages). There is also a automatic deposits feature where you can schedule ACH transfers on a weekly, biweekly, monthly, or quarterly basis.

ACAT account transfers. Robinhood now accepts incoming stock transfers from outside brokerage accounts. To do this, go your app account menu, select “Banking”, then select “Stock Transfer” and follow the on-screen instructions. Incoming transfers are free. Outgoing transfers will incur a $75 fee.

Robinhood Instant. Robinhood Instant is a free upgrade that gets you a “limited margin account” that has the following features:

  • Immediate access to funds from selling stock. That means you can reinvest those funds without waiting two days for settlement. (All brokerage margin accounts offer this.)
  • Limited instant deposits. Use up to $1,000 of your pending bank deposits right away. No waiting 2-3 days for a bank transfer to complete.

What’s the catch? Getting free trades is great, but be aware of the following:

  • Although they announced that a web interface is available, I have been on the waitlist since early November (currently #600,000 in line). Full rollout is not scheduled until some time in 2018. Everyone can access their account via a mobile Apple iOS or Android device (iPhone, iPad, iPod Touch, Android phone, Android tablet).
  • There are unofficial sites that use the Robinhood API to provide web access, but I would be wary of sharing your login credentials with a 3rd-party.
  • I’m currently on a wait list for the free options trading as well.
  • Broker-assisted phone trades are $10 each, according to their fee schedule.
  • Electronic statements are the default and only free option. I don’t even see an option to enable paper statements in the app, but according to their fee schedule paper statements cost $5 a pop.

How do they make money? First, Robinhood will make some money the same way other brokers do: collect interest on your idle cash, charge you interest for margin loans, and sell order flow. The most innovative prospect is to the plan to sell API access to other financial apps.

The fact that Robinhood sells order flow may leave you with a slightly worse execution price as compared to other brokers with more complex order routing. If you are making large value trades, then this small percentage difference may add up to something significant that matters more than commission price. With my tiny order volume, I am fine with them selling my order flow if they are giving me commission-free trades.

Robinhood Gold is their premium service tier that gives you extending trading hours and interest-free margin for $10 a Month. My Robinhood Gold review.

User interface. Over the last 10 years, I’ve opened an account at the majority of the “discount” brokerage firms. I’ve had $0 trades before, along with $2 trades, $2.50 trades, $4.95 trades and so on. What makes Robinhood special is their modern, app-centric approach. I agree with this quote from Wired:

But the app’s simplicity is meant to be about more than style. Ease of access and understanding is meant to make Robinhood compulsively engaging for a new generation of investors that don’t find the stock market very accessible from the mobile screens at the center of their lives.

Screenshots.

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Recap. Robinhood delivers on their $0 stock trades promise with no minimum balance. The app interface is clean and intuitive. Customer service can be slow to respond as they direct you to contact them only via email.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


DietBet Review: Using Money To Motivate You To Lose Weight

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

dietbet180It’s that time of year, and since I eventually lost 50 pounds with the help of this and other weight-loss betting sites (and have kept it off since), and I wanted to share my experiences including both positive and negative aspects.

DietBet.com runs weight-loss challenges where I bet my own hard-earned cash that I could lose 10% of my body weight within 6 months. More specifically, a group of folks (strangers or friends) agreed on a weight loss goal, put money into a community pot, and the winners split the pot. Here’s a look back at how the process worked along with some helpful tips and detailed numbers.

Game basics. You pick from a list of available “games” that are starting soon. All of them have a goal of either losing 4% of your body weight in 4 weeks (Kickstarter), or 10% in 6 months (Transformer). I chose the 10% goal and picked the group with the most participants because Dietbet uses the poker rake model where the winners take money from the losers. This is smart because Dietbet doesn’t risk any of its own money (also doesn’t have any incentive for you to lose).

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Weigh-in rules and tips. Your weight is verified each round by uploading two pictures: one with your feet on a digital scale, and another of your entire (lightly-clothed) body on the same scale. You are given a special keyword to ensure that the weigh-in is done during a 48-hour window. Here are my tips:

  1. Use the smartphone app. Having the smartphone app made it so much easier to snap the pictures and upload with a few taps. iOS and Android only.
  2. Check the dates with your work schedule. During one of my weigh-ins, I was on the road. Dietbet says digital scales are “preferred” but the only thing at my hotel’s gym was a non-digital balance scale. My submission was still accepted. If my hotel gym didn’t have a scale at all, I would have had to search for a Wal-Mart or something.
  3. Know the rules and give yourself time for rejections. One of my submissions was initially rejected because I was wearing running shoes (in that same hotel gym) and I forgot that shoes aren’t allowed in the pictures. You only get a 12-hour grace period after a rejection to re-submit a qualifying weigh-in.

Overall, I felt that Dietbet was fair and quick when judging my weigh-in pictures. You may also be “audited” and be required to submit a video verification. I did not get audited.

Money details. The bet amounts can vary by game, but mine was for $25 a month times 6 months. I was offered one month free ($25 discount) if I paid $125 upfront, but since this is all about the behavioral component for me, I wanted the monthly charge to show up on my credit card bill. Players who have chosen to place their bets on a monthly basis may drop out at any time and avoid being charged for future, unplayed rounds.

There is one round per month; Rounds 1 to 6. Half of the total money bet is put towards Round 1 through 5. That is $25 x 6 / 2 = $75, split across 5 rounds is $15 per round. The other half is put toward the final weigh-in round. So $75 is bet on Round 6. Here’s a screenshot that shows my actual winnings from each round:

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  • Round 1 Breakdown: $16.09 (7% ROI on $15 bet)
  • Round 2 Breakdown: $26.94 (80% ROI)
  • Round 3 Breakdown: $31.36 (109% ROI)
  • Round 4 Breakdown: $31.50 (110% ROI)
  • Round 5 Breakdown: $30.42 (103% ROI)
  • Round 6 Breakdown: $152.87 (104% ROI)

I ended up winning $289.19, for a net win of $139.18. That’s a solid 93% return on my $150 initial bet! According to their documentation, the average “win” is 50% to 100% of your contribution. I would venture to guess that the 6-month games have a higher overall payout due to a higher difficulty level.

As noted above, Dietbet makes their money by taking a cut of the gross pot before distribution, between 10% to 25%. In a previous post, I erroneously assumed that the numbers being reported above were before fees were taken out. The numbers are actually net of fees. (You are always guaranteed never to lose money if you win, which otherwise technically could happen if enough people win.)

Your winnings can be withdrawn either via PayPal or paper check, but you have to pay a $5 fee and make special request for a paper check. When withdrawing via PayPal, you won’t pay any fees, and I was sent my money within a hour. Here’s screenshot proof of my winnings payout showing no fees.

Warnings. When signing up for a challenge, Dietbet will automatically add $20 of “Official Weigh-in Tokens” to your cart. These are not mandatory. I think using the word “Official” is misleading. They should use “Optional” or “Additional” instead. You should treat them as extra raffle tickets for prizes like Fitbits and such. If you want that, fine, but otherwise be sure to remove them otherwise it’s just wasted money.

Bottom line. I committed to a Dietbet Challenge to lose 10% of my initial weight over 6 months. You can see upcoming Dietbet games here. I lost the weight, completed my verifications without hassle, won the bet, and was paid my winnings. There were a lot of factors that helped me lose weight and change my eating habits:

  • Loss aversion is quite a strange thing. Even though 25 bucks a month isn’t all that much money, the prospect of losing it was a powerful motivator.
  • The Dietbet community board for my challenge was quite positive in supporting other people towards their weight-loss goals.
  • I created extra motivation by telling people about the challenge as I didn’t want to admit publicly to failure.

While Dietbet was not there to cook my healthy meals, exercise for me, or keep me away from the late-night Doritos, it was the missing catalyst that I needed to get my health back on track. For other people this might be a heart attack or other medical issue. I’m glad I didn’t have to wait for something like that. Even if I “lost” the challenge but also lost 5% of my body weight, I might have still seen it as an overall positive experience.

See my separate Healthwage Review, a similar service. You can do both at the same time.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Lemonade Insurance Review: Home & Renters Insurance With No Incentive To Deny Your Claim?

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

lemon_logoUpdated July 2018. Lemonade continues its rollout – see map above. Get a free quote from Lemonade and see if they are cheaper than your current homeowner’s or renter’s insurance policy. Feel free to leave a comment about whether they were more or less expensive at the same coverage and deductible level.

Right or wrong, many people view insurance companies with suspicion. Even though you pay them money every month for protection, you worry if you’ll actually get paid when you experience a problem. The problem is that with most insurance companies, every dollar they don’t pay you ends up in their pocket. The incentives are not aligned. Will they find a reason to deny your claim? Will they make it such a pain that you’ll just give up? Recall the Insuricare scene from the movie The Incredibles.

Lemonade is a new insurance company that takes a flat cut upfront, and the rest is put aside to payout claims. They are starting out with homeowner’s and renter’s insurance. The specific breakdown is below.

  • 20% to Lemonade.
  • 40% into a pool to pay out for claims (or charity).
  • 40% to reinsurance in case that pool is exhausted (catastrophic cases).

Reinsurance is basically what is sounds like – insurance for insurance companies. This provides additional safety that there will be money to pay out your claim in cases of catastrophic losses (i.e. certain natural disasters). Examples of reinsurance companies are Lloyd’s of London and Berkshire Hathaway.

If there are fewer claims than expected, Lemonade will donate the money to a charity of your choice. Therefore, they have no direct incentive to deny a valid claim. In turn, hopefully their customers will also not make false claims because they will only be taking money away from charities and not the big bad insurance company. When signing up, you even take a “honesty pledge”. Here’s how behavioral economist Dan Ariely, who is their “Chief Behavioral Officer”, puts it:

Knowing that every dollar denied to you in claims is a dollar more to your insurer, brings out the worst in us all… Since we don’t pocket unclaimed money, we can be trusted to pay claims fast and hassle-free. As for our customers, knowing fraud harms a cause they believe in, rather than an insurance company they don’t, brings out their better nature too. Everyone wins.

Lemonade is also structured as a Public Benefit Corporation (B-Corp), which makes it the “World’s Only Public Benefit Insurance Company”.

Update: In July 2017, TechCrunch reported that Lemonade made its first annual donation of $53,174 or 10.2% of first year revenues. So that’s 10% out of the 40% pool reserved for claims (or charity).

Lemonade also saves money with tech start-up tricks. No human salespeople. No brokers. No physical branches. Apply online. File your claim online. You can do nearly everything via smartphone app (iOS and Android) with a chat-based AI interface. (Fewer adjusters and customer service reps.) If you have to file a claim, you can take a video of the damage using their app and explain the situation.

It remains to be seen if they can truly disrupt the industry. In the meantime, they need competitive premiums. Uber would not be so successful if they weren’t also cheaper than traditional taxis.

Live Policy and Zero-deductible option. In September 2017, Lemonade rolled out a new option with a zero deductible. If you pick this option, you won’t have to pay any deductible and thus get the full value of even a smaller claim like a $250 bike or smartphone. Importantly, Lemonade also promises not to hike your premium after making a claim (you are limited to two claims per year). You can preview how much this option changes your premium with their “Live Policy” system where you can make changes to your policy instantly via the Lemonade app.

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As of July 2018, Lemonade offers renters, condo and/or homeowners insurance in Arkansas, Arizona, California, Connecticut, District Of Columbia, Georgia, Iowa, Illinois, Maryland, Michigan, New Jersey, New Mexico, Nevada, New York, Ohio, Oregon, Pennsylvania, Rhode Island, Texas, Wisconsin. Get a free online quote from Lemonade and compare with what you have now. Prices start at $35 $25 a month for homeowner’s insurance and $5 a month for renter’s insurance.

Also see: I asked for more clarification on how Lemonade differs from mutual insurance.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Wealthfront Review: Feature Breakdown and Comparison

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Wealthfront is one of the largest independent digital advisory firms (i.e. not tied to a specific brand of funds like Vanguard or Schwab). With a younger target audience (20s to 40s), their offering is for folks that are comfortable having nearly all interactions via smartphone or website. They frequently announce new features and improvements, so I will work to keep this feature list updated.

Diversified portfolio of high-quality, low-cost ETFs. Their portfolios are a diversified mix of several asset classes including: US Total, US Dividend, International Developed, US Corporate Bonds, Muni Bonds, Emerging Market Bonds, REITs, and Natural Resources. For the most part, low-cost Vanguard and iShares ETFs are used. You could argue the finer points of a specific portfolio, but overall it is backed by academic research (Chief Investment Officer is Burton Malkiel).

Direct indexing. If your account is over $100,000, Wealthfront will buy all the stocks in the S&P 500 individually and commission-free. ETF expense ratios are pretty low now, so this is mostly used as an opportunity for more tax-loss harvesting. No other robo-advisor offers this feature. Here is whitepaper that details their position. As long as you meet the $100k minimum, there is no additional cost fee above the standard management fee.

Smart-beta. If your account is over $500,000, Wealthfront created Advanced Indexing as their answer to “smart-beta” investing. It works within its Direct Indexing feature in order to improve tax efficiency. As long as you meet the $500k minimum, there is no additional cost fee above the standard management fee.

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Financial planning software with outside account integration. Path is Wealthfront’s new financial planning software, launched in February 2017. This service links your external accounts from other banks, brokerages, and 401k plans (similar to Mint and Personal Capital) in order to see your entire picture without having to manually input your balances and transactions. How much do I have invested elsewhere? How much am I spending? How much am I saving? How much can I spend in retirement?

Path can forecast your saving rate using the last 12 months of transactions. Investment returns are estimated using Monte Carlo analysis. It also accounts for your household income, birthdate, and chosen retirement age to estimate how Social Security will affect your retirement income needs. You can change up the variables and see how it will affect your retirement outlook.

College Savings Planning. You can select a college for real-time expense projections, get a customized estimate of financial aid, and receive a personalized college savings plan to cover the difference. This works with or without their own Wealthfront 529 College Savings account.

Account types. Wealthfront now supports taxable joint accounts, trust accounts, 401k rollovers, Traditional IRAs, Roth IRAs, and SEP IRAs. They also offer a 529 College Savings account.

Tax-sensitive account transfers. This is good news if you already have an existing portfolio with unrealized capital gains. Other robo-advisors may have a “switch calculator” to help you decide whether to move over or not, but Wealthfront will actually accept your existing investments and manage it for you alongside your new investments.

If you want to switch advisors or move your brokerage holdings into a diversified portfolio, you typically have to sell all your holdings and move in cash. This means you will more than likely have a large tax bill. Instead of selling your holdings, Wealthfront will directly transfer them into a diversified portfolio tax efficiently, saving you that tax bill.

Tax-efficent asset location. They will place different asset classes in your taxable accounts vs. tax-deferred accounts (IRAs, 401ks) for a higher after-tax return. However, they do not treat them holistically (i.e. putting all one of one asset in IRA and none in taxable). Non-Wealthfront accounts are also not taken into consideration.

Use dividends and new contributions to rebalance. They will use your dividends and new contributions to rebalance your asset classes in order to minimize sells and thus minimize capital gains.

Concentrated holding of a single stock? Wealthfront caters to the tech start-up crowd with a unique Selling Plan service for people with much of their net worth tied up in a single stock. They’ll help you sell your positions gradually in a tax-efficent manner. Currently available to shareholders of: Alphabet, Amazon, Apple, Arista Networks, Box, Facebook, Pure Storage, Square, Twilio, Twitter, Yelp, Zillow.

Daily tax-loss harvesting. Wealthfront software monitors your holdings daily and attempts to find opportunities to harvest tax losses by switching between “similar but not substantially identical” ETFs. If you can delay paying taxes and reinvest them, this can result in a greater after-tax return. The exact “tax alpha” of this practice depends on multiple factors like portfolio size and tax brackets. You can read the Wealthfront side of things in this whitepaper and Schwab comparison. Here is an outside viewpoint arguing for more conservative estimates.

My opinion is that there is long-term value in tax-loss harvesting and especially daily monitoring to capture more losses. However, I also think it’s wise to use a conservative assumption as to the size of that value. (DIY investors can perform their own tax-loss harvesting as well on a less-frequent basis. I do it myself, but it’s rather tedious and I’m definitely not doing it more often than once a year. I would gladly leave it to the bots if it was cheap enough.)

Portfolio Line of Credit. If your taxable balance is over $100,000, Wealthfront will automatically give you a line of credit of up to 30% of your balance. There is no application, no fees, low interest rates, and you can get cash in as little as 1 business day. The rates are advertised to be even lower than a Home Equity Line of Credit (HELOC). Keep your loan balances modest though, as this is a margin lending product and they may force you to sell your investments if your outstanding balance exceeds your available margin.

Fee schedule. The fee schedule for Wealthfront is simple – Everyone gets charged a flat advisory fee of 0.25% of assets annually (first $10,000 waived). All of the features listed above are included. As your asset size increases, you get access to some additional features like Direct Indexing and Advanced Indexing (Smart-Beta).

Bottom line. Wealthfront is an independent digital advisory firm with over $7 billion in assets. Independent which means they aren’t tied to any specific brand of funds like Vanguard, Fidelity, or Schwab. Their main differentiators from the other independent firms (see my Betterment review) are (1) Direct Indexing and Advanced (Smart-Beta) Indexing portfolio management for optimal tax-efficiency and (2) customized assistance with transferring in your existing investments (including company stock) and then selling them tax-efficiently. Other notable features include: Financial planning software that incorporates external accounts, tax-loss harvesting, 529 college saving plan and guidance software, and a portfolio line-of-credit.

Special offer. Open a Wealthfront account via my invite link and get your first $15,000 managed for free, forever. This is an additional $5,000 above the standard $10,000 balance waiver. You can then invite your own friends for more savings (your friend gets $15k managed free as well, and you get another $5k managed for free.)

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Landline Phone Replacement: OBi200 Adapter $40 Deal + Installation Tips

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

obi200Updated. If you still like the idea of landline phone service and multiple handsets around the house, Obihai VoIP boxes are officially supported by Google Voice to provide unlimited free calls to the USA to Canada. That’s totally free: $0 a month + $0 in tax and fees. Low international per-minute rates as well. All you need is a broadband internet connection and and a power plug (no computer).

Special offers. Get Obi200 for $39.98 when you use promo code OBIDEAL7 (expires 7/30/17). The seller should be Obihai Technology, Inc. at $49.99 before the coupon brings it down to $39.98 during checkout. There haven’t been many deals on these boxes recently.

I bought myself a Obi200 in order to try out their free calls, and also compare the voice quality with my Ooma device. I thought about making a video, but it turned out to be unnecessary.

  1. Open the box and plug in the cables. AC adapter, telephone line, and ethernet cable to router. All ports are clearly marked. All the cables are included except the phone cable which you should already have. The image below says it all:

    obi200a

    Here is the back of the box, showing the ports:

    obi200_ports

  2. Write down your unique Obi number. This is clearly printed on the bottom of the Obi200 box. Mine was 9 digits like “123 456 789”.
  3. Go to your computer and visit ObiTalk.com. Click on the link that says “Register” in the top right corner. Then just follow the directions. Dial a test phone number when it asks. It is easiest to use the “Sign in with Google Account” button since you already have one if you use Google Voice. I didn’t even have to type in my password (as I was already logged in by cookie). They didn’t require name, address, or credit card number. A few confirmation clicks, and that was it.

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  4. Use your phone. I turned on my phone, listened to the dial tone, and called my cell phone. Success! Traditional phone service with unlimited calls within the US and Canada for the great price of $0 a month. The voice quality was fine, and continued to be quite good for the few months that I was using it before giving it away. (I already have the grandfathered fully-free version of Ooma. The voice quality between the two was comparable.)

Total set-up time was under 10 minutes. If for some reason my directions don’t work, check out the official Obi200 Starter Guide [pdf] or their extensive set of tutorials. You can also add e911 service for $15 a year.

Which Obi box model should I buy? I think the sweet spot for most people will be the Obi200, which supports T.38 faxing and has a USB port which can be used to connect to your router over WiFi using an OBiWiFi adapter.

The Obi202 offers two independent phone ports so you can use two different VoIP providers simultaneously (or you can have two Google Voice phone numbers). If you can find one on the cheap, the older boxes work too. However, note that Obihai has stopped supporting Obi100 and Obi110 with new development. Here is a handy comparison chart of the OBi100, OBi110, OBi200, and OBi202.

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Bottom line. If you like the idea of having a landline-style phone service (multiple handsets around the house), this is a very good way to save money on your budget.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


RealtyShares Review 2017: Wisconsin Apartment Loan One-Year Update

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

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Here’s a one-year update on my $2,000 investment through RealtyShares, a partial interest in a loan backed by a 6-unit apartment complex in Milwaukee, Wisconsin. RealtyShares is restricted to accredited investors only. Here are the highlights:

  • Property: 6-unit, 6,490 sf multifamily in Milwaukee, WI.
  • Interest rate: 9% APR, paid monthly.
  • Amount invested: $2,000.
  • Term: 12 months, with 6-month extension option.
  • Total loan amount is $168,000. Purchase price is $220,000 (LTC 76%). Estimated after-repair value is $260,000. Broker Opinion of Value is $238,000.
  • Loan is secured by the property, in the first position. Also have personal guarantee from borrower.
  • Stated goal is to rehab, stabilize, and then either sell or refinance.

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Property details. I chose this property because it is different from my other past “experiments”. I have never lived in or visited Milwaukee, Wisconsin. I have never invested in an apartment complex. Where I live, parking spaces have sold for more than $200,000. All units are 2 bed/1 bath, currently fully rented for ~$600 a month each. I don’t know all the numbers, but this place earns roughly $43,000 in gross annual rents with a purchase price of $220,000. Annual property taxes are $3,000 a year. Even if half of the rent is spent on expenses, that is still a cap rate of 10%. To be honest, I have had some second thoughts about this borrower (after a few late payments) that s/he is juggling too many investment properties using crowdfunding websites.

Initial experience. This specific investment was not “pre-funded” by RealtyShares. That meant that I had to wait until they secured enough committed money before the deal can go forward. I committed to this loan on 12/21/15 and $2,000 was debited from my Ally bank account on 12/29/15. However, the funding goal was not reached until 1/13/16 (before which I earned no interest) and I didn’t receive my first interest payment until 3/4/16 (for interest accrued 1/13-2/10). There was essentially a 3 month period between the time where they first took my money and I received my first interest check. I did receive my second month of interest shortly thereafter on 3/17/16.

Since my initial investment, RealtyShares has started offering investments on a pre-funded basis. You should also know that you don’t have to deposit any money into your account first before investing in any deal. You should link an account, but you can sign the papers and they will debit the funds when the investment closes.

What if RealtyShares goes bankrupt? RealtyShares investments have a bankruptcy-remote design. RealtyShares, Inc. is the platform. Your investment is held within a separate special-purpose LLC with a designated trustee which would continue to operate even if RealtyShares, Inc. goes bankrupt.

Payment history. I’ve been earning my 9% APR interest on my $2,000 initial investment, which works out to $15 a month. Below is a screenshot of my interest payments, which I have elected to by deposited directly into my bank account. You can see that I have received 12 payments over the last 12 months (March 2016 to March 2017). The borrower has had a few late payments, but always seems to catch up eventually. There was a mention of late charges potentially being charged, but none appear to have been paid out to my account. I need to follow-up on that (I assume it was within the allowed grace period).

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Recap and next steps? My real-estate-backed loan through RealtyShares is now a year old, designated my Real Estate Crowdfunding Experiment #3. I have received my 9% interest as promised, and the loan is current although some past payments have been late before becoming current again. The borrower has exercised the 6-month extension option and the loan now has an expected maturity of 5/20/17, so it remains a continuing experiment to see how/if/when the borrower pays off the loan in full. I definitely like that my loans are backed by hard assets, and a small part of me is still curious as to what would happen if the borrower just walked away.

Please don’t take any of my experiments as recommendations as the entire point is that I don’t know all the angles. I am sharing and learning. Also, I don’t know your situation. If you are interested and are an accredited investor, you can sign-up for free and browse investments at RealtyShares before depositing any funds or making any investments.

Experiment #1 was with Patch of Land and single-family residential property in California, which was paid back in full with a 12.5% annualized return. Experiment #2 is ongoing with the Fundrise Income eREIT, which holds a basket of commercial property investments and has been paying quarterly distributions on a timely basis.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Fundrise Income eREIT Review 2017: One Year Update

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

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Here’s an update on my $2,000 investment into the Fundrise Income eREIT. Fundrise is taking advantage of recent legislation allowing certain crowdfunding investments to be offered to the general public (they were previously limited only to accredited investors). REIT = Real Estate Investment Trust. This specific eREIT initially sold out of its $50 million offering, but Fundrise has since opened regional eREITs called the West Coast, Heartland, and East Coast eREITs. The highlights:

  • $1,000 investment minimum.
  • Quarterly cash distributions.
  • Quarterly liquidity window. You can request to sell shares quarterly, but liquidity is not always guaranteed.
  • Fees are claimed to be roughly 1/10th the fees of similar non-traded REITs. Until Dec 31, 2017, you pay $0 in asset management fees unless you earn a 15% annualized return.
  • Transparency. They give you the details on the properties held, along with updates whenever a new property is added or sold.

Why not just invest in a low-cost REIT index fund? I happen to think most everyone should invest in a low-cost REIT index fund like the Vanguard REIT ETF (VNQ) if they want commercial real estate exposure. I have many times more money in VNQ than I have in Fundrise. VNQ invests in publicly-traded REITs, huge companies worth up to tens of billions of dollars. VNQ also has wide diversification and daily liquidity. But as publicly-traded REITs have grown in popularity (and price), their income yields have gone down.

Fundrise makes direct investments into smaller properties with the goal of obtaining higher risk-adjusted returns. They do a mix of equity, preferred equity, and debt. Examples of real-life holdings are a luxury rental townhome complex and a $2 million boutique hotel. From their FAQ:

Specifically, we believe the market for smaller real estate transactions (“small balance commercial market or SBC”) is underserved by conventional capital sources and that lending in the market is fragmented, reducing the availability and overall efficiency for real estate owners raising funds. This inefficiency and fragmentation of the SBC market has resulted in a relatively favorable pricing dynamic which the eREIT intends to capitalize on using efficiencies created through our technology platform.

Here’s a comparison chart taken from the Fundrise site:

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Quarterly liquidity. As noted, the investment offers the ability to request liquidity on a quarterly basis, but it is not guaranteed that you can withdraw all that you request. In addition, you may not receive back your full initial investment based on the current calculation of the net asset value (NAV).

Update: I tested out the quarterly liquidity window and was able to withdraw my funds in a simple process and without issue.

Dividend reinvestment. I chose to have my dividends paid directly into my checking account. However, you can now choose to have your dividend automatically reinvested across currently available offerings.

Tax time paperwork? All you get at tax time is a single 1099-DIV form with your ordinary dividends listed in Box 1a. That’s it. Every other box is empty. This is much easier than dealing with the 10-page list of tax lots from LendingClub or Prosper.

Dividend income updates.

  • Q1 2016. 4.5% annualized dividend was announced. This was the first complete quarter of activity, so the dividend was not as large as when funds became fully invested. The portfolio had 13 commercial real estate assets from 8 different metropolitan areas, with approximately $31.5 million committed.
  • Q2 2016. 10% annualized dividend announced, paid mid-July. Portfolio now includes 15 assets totaling roughly $47.25M in committed capital.
  • Q3 2016. 11% annualized dividend announced, paid mid-October.
  • Q4 2016. 11.25% annualized dividend announced, paid mid-January. Portfolio now includes 17 assets and all of the $50 million has been invested.

Screenshot from my account:

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Recap and next steps? It has now been over a year since my initial investment in the Fundrise Income eREIT, designated my Real Estate Crowdfunding Experiment #2. I’ve earned $183.01 in dividends on my initial $2,000 investment. The quarterly dividends have arrived on time, I get regular e-mail updates, and it has been nearly zero-maintenance. I still accept the possibility of wide price fluctuations, as with any real estate investment.

Update: I tested out the quarterly liquidity window and was able to withdraw my funds in a simple process and without issue. Fundrise is still accepting direct investments into some of their eREITs, but I am now looking to re-invest into their new Fundrise 2.0 system, which has a new $500 minimum and allocates across multiple eREITs. You can sign-up and browse investments at Fundrise for free before depositing any funds or making any investments.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Betterment Now Offers Human Advice + Flat Fee Structure

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone.

betterment_logoThe robo-advisor evolution continues. Betterment just announced some significant changes that include the option to upgrade to a Certified Financial Planner (CFP®) and a more simplified flat fee structure. Here are highlights from the new plans:

  • Betterment Digital. Their original product with digital portfolio management and guidance. Now at a flat 0.25% annually (no more tiers). No minimum balance. There is no longer be a $3/month fee if you don’t make monthly auto-deposits. The management fee on any assets over $2 million is waived.
  • Betterment Plus. Digital features above + an annual planning call from a “team of CFP® professionals and licensed financial experts who monitor accounts throughout the year.” You will also have unlimited e-mail access. The plan is a flat 0.40% annually. $100,000 minimum balance required.
  • Betterment Premium. Digital features above + unlimited phone access to a “team of CFP® professionals and licensed financial experts who monitor accounts throughout the year.” You will also have unlimited e-mail access. The plan is a flat 0.50% annually. $250,000 minimum balance required.

Betterment’s previous fee structure for Digital was 0.35% for balances under $10,000 with $100/mo auto-deposit (or a flat $3 a month without), 0.25% for balances of $10,000 to $100,000, and 0.15% for balances above $100,000. This means that with the new flat 0.25% fee structure, people with balances under $10k will end up paying less while those with $100k+ will be paying more. If I had a big balance at Betterment, I’d be quite unhappy with the price hike. Existing customers on the 0.15% tier will stay on that fee structure until June 1st, 2017.

Here’s how this breaks down in terms of your account size:

  • $10,000 account balance. Digital would cost just $25 a year ($2.08 a month). There is no longer any requirement for auto-deposit to avoid a $3 a month fee. Plus or Premium not available.
  • $50,000 account balance. Digital would cost $125 a year ($10.41 a month. There is no longer any requirement for auto-deposit to avoid a $3 a month fee. Plus or Premium not available.
  • $100,000 account balance. Digital would cost $250 a year ($20.83 a month). Plus would cost $400 a year ($33.33 a month) and include an annual planning call with a human advisor. Premium not available.
  • $250,000 account balance. Digital would cost $625 a year ($52.08 a month). Plus would cost $1,000 a year ($83.33 a month) and include an annual planning call with a human advisor. Premium would cost $1,250 a year ($104.17 a month) and include unlimited calls to a human advisor.

Commentary. I don’t write about robo-advisors all that often, but Betterment adding human advisors as an upgrade option signals a big change in the industry. For the investors with modest balances, the flat fee is cheaper but it has always been pretty cheap; at $50k in assets it costs the same as a Netflix subscription. Perhaps more important is knowing that as you continue to grow assets, a human advisor will become available without having to move your money elsewhere.

For those with at least $100k in assets, the upgrade cost to talk to a human advisor annually appears reasonable ($150 a year more at $100k asset level). You also get unlimited e-mail interaction for quick questions. If you go to an independent CFP and request a one-time consultation, that will usually cost a $400 to $500 flat fee. Potential concerns include that you don’t get a dedicated person but a team. However, in my experience even if you get assigned a dedicated person, they’ve often moved onto another job within a year. The wording also suggests that the pool of advisors are not all CFPs.

This move signifies both the good and bad about the current robo-advisor environment. The good is that they keep evolving and looking for ways to improve (i.e. index replication, tax-sensitive asset location, tax loss harvesting). The bad is that these can involve big changes with little notice (i.e. portfolio tweaks, fee changes). This time, the good is now you have the option to pay more for human advice. The bad is that if you already had a lot of money with Betterment, your fees got hiked by 10 basis points. This is why I prefer to DIY, because I enjoy being in control.

That said, if I had to switch I would prefer human access for estate-planning purposes (Mrs. MMB doesn’t want to manage our portfolio). Betterment says they have an advantage because they are independent. For comparison, I would look into Vanguard Personal Advisor Services (VPAS) which costs 0.30% annually and includes a team of human advisors. Possible drawbacks of VPAS include no automated tax-loss harvesting and you’ll be confined to Vanguard products.

My Money Blog has partnered with CardRatings and may receive a commission from card issuers. Some or all of the card offers that appear on this site are from advertisers and may impact how and where card products appear on the site. MyMoneyBlog.com does not include all card companies or all available card offers. All opinions expressed are the author’s alone, and has not been provided nor approved by any of the companies mentioned.

MyMoneyBlog.com is also a member of the Amazon Associate Program, and if you click through to Amazon and make a purchase, I may earn a small commission. Thank you for your support.


Ally Bank 1-Day ACH Funds Transfer Review

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Considering all of the things that can be done instantaneously nowadays, I’m rather disappointed that it still takes 3 business days to move money between most financial institutions. NACHA has been gradually working on same-day ACH transfers – apparently credits are live (like direct deposit), but not debits. Even then, banks may treat this as a premium service and charge a fee.

Ally Bank announced in October 2016 that they would support free 1-day ACH transfers for eligible transfers on 12/3/2016. They later announced a delay until 1/7/17. I finally got around to testing out this new feature in mid-January. Here are their own words:

We can now complete qualified transfers between your Ally Bank and non-Ally Bank accounts in 1 business day – free of charge. If 1-day delivery is unavailable, we’ll deliver your transfer in 3 business days.

Here’s their updated timing chart (note the cut-off times):

ally1day1

Here are the official reasons why a transfer would be ineligible for 1-day delivery:

  • Your one-time transfer is ineligible due to account inactivity, overdrafts or transfer returns.
  • Your transfer is part of a recurring transfer plan.

In my experience playing around with the website, there may be other additional factors. Here are the results of various combinations of to/from between Ally Savings/Checking and a sample External Bank B. This is what Ally is telling me upfront, before initiating the transfer.

  • Ally Savings to External Bank B = 1-day Transfer
  • External Bank B to Ally Savings = 1-day Transfer
  • Ally Checking to External Bank B = 3-day Transfer
  • External Bank B to Ally Checking = 1-day Transfer

Update – Here’s what a commenter Craig said an Ally CSR told him. I haven’t officially confirmed this but it appears to be consistent with my experiences.

To qualify for the 1 day transfer At Ally Bank, you have to do at least one $250 transfer in and out of the external account and then it goes into effect 2 months after that is done…so ALL your transfer accounts can qualify for 1 day transfers if you follow that rule…They should mention on the website…i found it out from a CSR….

Let us not forget that Alliant reduced the amount of outgoing transfers to $25,000 where as Ally allows $150,000 per transfer…

This usually isn’t a problem since I can make an instant transfer between Ally Checking to Ally Savings and then do a 1-day transfer from there, but savings accounts are only allowed six withdrawals per month. If I have a lot of transfers in any given month, I will eventually run into delays.

Ally has redesigned and improved the user interface of their funds transfer page. They now provide a a nice illustration of when your funds will be debited and when they will be deposited at the target location. It is also explicitly states whether it is a 1-day or 3-day transfer. Here’s an Expedited 1-day transfer:

ally1day2

Here’s a Standard 3-day transfer (in this case technically it will take only two days):

ally1day3

Bottom line. Ally Bank now offers 1 business day transfers in eligible cases with an improved user experience. Overall, I’m happy with this development as it applies most of the time (see above for details). I use Ally Bank as my central hub for cash transfers with Ally Bank Savings Account (higher interest, 6 withdrawals per month) as my default location for liquid cash savings and as a free overdraft source from Ally Checking (unlimited withdrawals per month). If I find a high-interest CD that looks good, I move money to/from my Ally account to where it needs to go, so speed can matter.

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