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Betterment Review

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• published: 07 Nov 2013
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Get a $25 Signup Bonus: http://epicreviews.org/betterment-bonus Betterment Review Hello, future online investors! Today we are going to talk about the online brokerage firm, Betterment. Stay tuned for the advantages and disadvantages of Betterment, and hopefully by the end of this overview you will know whether or not Betterment is right for you. What is Betterment? Betterment is an online investing tool that automatically invests your money into stocks and bonds at a certain level of risk. Betterment will ask you to set your financial goals and will automatically balance risk and reward to help you reach these goals. It's a set it and forget it plan, investments will be automatically rebalanced when necessary. Betterment allows you to set up either an IRA or a traditional investing account for a variety of different goals. Obviously, a traditional or Roth IRA can be used to save up for retirement, and a taxable investing account can be used to save up for mid to long term goals, such as saving up for a house or a college education. What is so great about it? Number 1: You don't have to be an expert to invest. As Betterment does everything for you, all you have to do is set up a deposit and choose your allocation between stocks and bonds. Professionals will tell you to invest more conservatively as you age. So as time goes on you may want to allocate more and more to bonds. When you are young, over 90% in stocks is totally acceptable. Not only do you not have to be an expert at investing, you don't have to hire one! Investment advisors can cost an arm and a leg, but Betterment will do all the work for you. Don't worry about the stock and bond picks, a team of experts has hand selected them. Number 2: It helps you reach your goals. After you set your financial goals, Betterment will give you advice in terms of asset allocation, one time deposits, or monthly contributions. With the click of a button, you can take the advice and change the allocation or deposits. Number 3: It's really user friendly. As a newbie investor, I completely understand that investing can be confusing. Betterment just lets you set it and forget it using the allocation method you choose. Then it spells out how much you've contributed, how much you've earned, and whether or not you are on track to reach your financial goals. Number 4: The fee structure is very low. The fees are very low, even for a typical brokerage firm. Throw in the fact that all the allocations are done for you and it's a downright steal! There are three management fee levels -- Builder, Better, and Best. I will discuss these when I go over price at the end of this overview. Why isn't it great? Number 1: There aren't a lot of investment options. Similar to a typical company 401(k) plan, the investment options are limited and don't include individual stocks or mutual funds. Betterment portfolios are made up of ETFs to achieve diversification. Number 2: Because the options are limited, you likely will not get the growth you could from more aggressive investments. Riskier investments can provide higher returns that the conservative folks at Betterment cannot. You have to decide what's more important to you, steady growth or possible soaring highs and devastating lows. How much is it? As I said previously, the fee structure is very reasonable. The three levels are Builder, Better, and Best. The Builder level is for those investing $100 per month at a minimum and costs 0.35% of your balance. The Better level is for those with a minimum balance of $10,000 and costs 0.25% of your balance. The Best level is for those with a minimum balance of $100,000 and costs 0.15% of your balance. There is no minimum balance requirement to open an account so you can get started with whatever money you have today! Now that you know what Betterment is all about, I hope that you can decide for yourself whether or not it is the best online investing tool for you. Please let us know in the comments if you have ever used Betterment or any other online investing tools and what you thought of it. Have a great day!