Wealthfront vs. Vanguard
Hi all, I’ve kept my money in a Wealthfront account for as long as I can remember. My risk profile has been at a 9, so I’m assuming my portfolio is mostly stocks. However, from time to time, I’ve considered whether a Vanguard would be simpler, more effective, and cheaper, but never took the time to do the research. From anyone who has, what’s the superior option? TC:$300K #personalfinance #investments
The advantage with Wealthfront is tax loss harvesting. Over the last few years that in itself has helped offset the fees
Run the math on that considered you can only offset $3000 a year in income due to tax loss harvesting. $3000 at a 32% tax rate is ~$1000. If the fee is .25%, 1000/.0025 = 400,000. If your portfolio is over 400,000 at a 32% tax rate, you're losing money. You can also tax loss harvest yourself without a robot, but you have to watch the markets.
More if you have other short term gains
Wealthfront just invests in vanguard etfs
Vanguard all the way. Wealthfront just charges you for the pleasure of having Vanguard funds with a much better interface. But once you get over Vanguard's unintuitive website and mostly unhelpful mobile app, you can realize that you're better off with them anyways because you're not doing anything that requires an incredible UI/UX, etc and will save so much over time by going straight to the source.
What about tax loss harvesting? Also, which Vanguard fund would you recommend investing in?
bro what is tax loss harvesting?!
I’ve made up all the fees in tax loss harvesting. It’s a beautiful app and now has a cash card that earns %2.X APY. Wealthfront all the way.
I was on the same spot. I went with Vanguard when I realized how much money Wealthfront they would take from fees. It's a big difference, there's also the expense ratio from the ETF itself which I think it's not covered by the fees.
Can you point me to research or analysis that breaks this down. I pay about $70 per month in service charges to Wealthfront. It doesn’t seem like that would make a material difference on a portfolio my size ($500K)
Compound interest. But with your portfolio size assuming 7% returns over 20 years... Wealthfront $1,874,950 Without fees $1,934,842