4 ms·

That's better than the alternative of not investing at all because Vanguard is not user-friendly. And I know that's possible because I have friends who were in

by dguo 9y ago

That's better than the alternative of not investing at all because Vanguard is not user-friendly. And I know that's possible because I have friends who were in that situation. If you sign up with Vanguard, you still have to pick which fund(s) to buy. If you don't know anything about investing, that can be a daunting task. With Betterment, the only decision you have to make is the percentage split for stocks vs. bonds.

btmorex 9y ago
Isn't that why Vanguard has their Total Stock Market and Total Bond Market funds? Basically, they're the "invest in these if you don't want to bother" funds.
- mcintyre1994 9y ago
  They also have LifeStrategy 0/20/40/60/80/100 so you can balance stocks vs bonds however you want, and have diversification handled for you.
  - TorKlingberg 9y ago
    I think the numbered LifeStrategy funds are only a UK (GBP) thing. Am I wrong?
    - matwood 9y ago
      There are US equivalents.
    - mcintyre1994 9y ago
      I'm in the UK and hold the GBP products, so I'm unsure sorry.
- dguo 9y ago
  That's a good point. Deciding to go with those is still a choice though. It's like going to a restaurant that has both an omakase[1] option and regular dishes. Versus a restaurant that only offers omakase. The latter involves even less decision making. [1]: https://en.wikipedia.org/wiki/Omakase https://en.wikipedia.org/wiki/Omakase
luckydata 9y ago
Have you ran the math on how much that "user friendly" layer is costing you? I adore nice UIs, but I love even more keeping my money. Vanguard is really not that hard to use, and for how often you need to mess with it I don't think it's worth to spend more just to have prettier graphics.
- dguo 9y ago
  I have both Betterment and Vanguard accounts. I haven't bothered to consolidate yet because Betterment is trying to add value to justify the fee with features like tax loss harvesting, and I haven't decided if it's worth it or not. With regards to my friends though, my priority was to get them to invest in the first place, and the user friendliness of Betterment helped a lot.
  - kelnos 9y ago
    Your friends can't exercise some level of long term financial responsibility unless they're presented with pretty graphics and a slick UI? The lack of financial education in the US really makes me sad sometimes. And it pisses me off that companies like RH will take advantage of that.
    - dguo 9y ago
      I totally share[1] your feelings on the lack of financial education. In defense of my friends, they already knew to fund their 401(k)s. The question was what to do with their free cash. And considering the risk of losing money, any amount of friction (like a bad UI) can make it easy to procrastinate. [1]: https://twitter.com/dannyguo/status/961684866285924354 https://twitter.com/dannyguo/status/961684866285924354
southphillyman 9y ago
>That's better than the alternative of not investing at all because Vanguard is not user-friendly This is literally what happened to me. I lost out on 20%+ in gains because I procrastinated a year after reading about how much Betterment fees eat into your gains. In hindsight the amount of money I missed out on was WAY more than any fee Betterment would have hit me with.

by dguo 9y ago

btmorex 9y ago

Isn't that why Vanguard has their Total Stock Market and Total Bond Market funds? Basically, they're the "invest in these if you don't want to bother" funds.

mcintyre1994 9y ago
They also have LifeStrategy 0/20/40/60/80/100 so you can balance stocks vs bonds however you want, and have diversification handled for you.
- TorKlingberg 9y ago
  I think the numbered LifeStrategy funds are only a UK (GBP) thing. Am I wrong?
  - matwood 9y ago
    There are US equivalents.
  - mcintyre1994 9y ago
    I'm in the UK and hold the GBP products, so I'm unsure sorry.
dguo 9y ago
That's a good point. Deciding to go with those is still a choice though. It's like going to a restaurant that has both an omakase[1] option and regular dishes. Versus a restaurant that only offers omakase. The latter involves even less decision making. [1]: https://en.wikipedia.org/wiki/Omakase https://en.wikipedia.org/wiki/Omakase

luckydata 9y ago

Have you ran the math on how much that "user friendly" layer is costing you? I adore nice UIs, but I love even more keeping my money. Vanguard is really not that hard to use, and for how often you need to mess with it I don't think it's worth to spend more just to have prettier graphics.

dguo 9y ago
I have both Betterment and Vanguard accounts. I haven't bothered to consolidate yet because Betterment is trying to add value to justify the fee with features like tax loss harvesting, and I haven't decided if it's worth it or not. With regards to my friends though, my priority was to get them to invest in the first place, and the user friendliness of Betterment helped a lot.
- kelnos 9y ago
  Your friends can't exercise some level of long term financial responsibility unless they're presented with pretty graphics and a slick UI? The lack of financial education in the US really makes me sad sometimes. And it pisses me off that companies like RH will take advantage of that.
  - dguo 9y ago
    I totally share[1] your feelings on the lack of financial education. In defense of my friends, they already knew to fund their 401(k)s. The question was what to do with their free cash. And considering the risk of losing money, any amount of friction (like a bad UI) can make it easy to procrastinate. [1]: https://twitter.com/dannyguo/status/961684866285924354 https://twitter.com/dannyguo/status/961684866285924354

southphillyman 9y ago

>That's better than the alternative of not investing at all because Vanguard is not user-friendly This is literally what happened to me. I lost out on 20%+ in gains because I procrastinated a year after reading about how much Betterment fees eat into your gains. In hindsight the amount of money I missed out on was WAY more than any fee Betterment would have hit me with.