What is the benefit of investing via Vanguard vs betterment/wealthfront or vice versa? Is it advisable to invest in all the 3? I recently opened an account with Vanguard and invested around 10k. After a few days I learned about betterment and wealthfront. I am not sure if I should go ahead and invest via Vanguard or consider switching to betterment and/or wealthfront or distribute amongst all the three? please help.
Just use vanguard target date fund and forgettaboutit
I think I invested all 10k in VTSAX
I like wealthfront for it's planning features and net worth calculator for all my linked accounts. I don't use its robo investing because they charge fees. The high yield savings is nice, seems to be the highest rate you can get anywhere. For most of my investing i use fidelity but vanguard is equivalent.
It's mainly about fees, robo advisors will slap a fees that will eat into your returns, in the long run and with a decently sized portfolio, it will matter. Vanguard fees only comes from the investments themselves. Have you checked out M1 financing? I personally use it to invest, they don't have any fees, they are just like vanguard but much more flexible because they allow you to buy partial shares. I use wealthfront for their high yield saving acc only
What annual yields are we looking at? 5-7%?
No I haven’t heard about M1 financing. I will look into it. I see Wealthfront is offering APY of 1.82%. Has it been more than this in the past?
Expense ratios. Vanguard is far more competitive, saving you huge amounts of money over many years of investing. Do the math yourself and you’ll see.
Yes I agree there. That’s why I was confused when I read this another post talking about the benefits of robo inverters giving access to the automatic features like automated rebalancing, total loss harvesting amongst many others. I have copied the comment from that other post below if you are interested. So yeah my point was with all these features taken into account does vanguard still win?
Vanguard > all, in terms of net of fees returns. Wealthfront and Betterment just invest your money in Vanguard accounts anyway, and then charge you for it. The only legitimate use of them is Wealthfront's high yield savings account.
Someone in one of the old threads mentioned the points below. Now I am not much familiar with everything said here. So I was trying to understand if robo investors actually have any advantages over vanguards. Wealthfront and Betterment are VERY similar and use similar funds so it doesn't make you more diversified. And as some already said, it would make the tax loss harvesting feature tricky to use because of the wash sale rule. Vanguard is different. It's a brokerage account where you can build your own portfolio by picking and choosing the funds you like amongst hundreds or thousands. Wealthfront or Betterment come with lots of automated features like automatic rebalancing, tax loss harvesting, smart dividends reinvestment, fractional shares (Betterment), direct indexing ( WF) and more. For all those features, you'll pay 0.25% fees. Also both robo advisers use a lot of Vanguard funds themselves. The fees associated to each fund are the same no matter where you buy them. You could use Vanguard and replicate the portfolio s used by WF or Betterment and save 0.25%. However, you would need to spend quite a bit of time doing manually what the robos are doing and some automated features like automated daily tax loss harvesting are pretty much impossible to manually do. In that sense, robos are super convenient and allow you to set and forget. So you could say that the 0.25% fees of robos are a convenient fee. But both robos are claiming that their automated features will more than offset those fees.
Does anybody have a calculations of the additional savings generated from Robo advisers compared to Vanguard’s lower fee?
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Betterment is trash. Wealth front is good for a high yield savings account
I very recently started investing. I have invested in the index funds via vanguard. I am not sure whether betterment and wealthfront invests in index funds as well or it’s something different. I guess I want to understand what is the benefit of one over the other.