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Betterment: An Easy Way To Invest Online



By Shaun Takenouchi

One of the things that I’ve found out about investing is that it can be very confusing if you don’t know what you are doing. I played the stock market and put money in some other things, but it kept me longing for more. I wanted a way to invest that was simple and helpful, and at the same time earning some money. I didn’t need the “get rich quick” mentality; just an avenue to invest.

A few months ago I stumbled upon Betterment, a web application that lets you invest your money and makes it pretty easy to do so. It is a great service that gives you a wide variety of ways to educate you to make an informed decision about investing. But it doesn’t stop there; it is a site where you can put your money into stocks and bonds through Betterment’s portfolio.

Starting Out

When you first start to use Betterment, you are asked what your financial goal is. For example, how much money do you want to make and how long do you want to take to get there. There are a variety of different goals to choose from, anywhere from retirement to a major purchase and even a wedding.

Making a Goal

Once you give Betterment this information you are taken to an “Advice” page. This is where Betterment helps you determine a sound strategy for investing your money. You can decide between stocks and bonds and what percentage of each you want your money to be put into. Based upon what you decide, Betterment gives you some recommendations on how much money you should be depositing each month as well as what your risk and return would possibly look like.

Advice Page

Once you are satisfied with what you decide on for the percentage, you can then set up an automatic deposit. When you do this, Betterment takes the amount you set aside out of your bank account and invests it the way you told them to. You can also choose to put in money on your own whenever you want instead of doing an automatic deposit.

Watching Your Investments

A good investor always makes sure to watch what their investments are doing and make changes if need be. Betterment does a good job of giving you the tools to stay informed and to make changes  if needed. The first way that they do this is through the Summary page. This is page shows you an overview of your portfolio and how it is doing. It shows you your current balance as well as how much money you have earned or lost. It also shows you your allocation between stocks and bonds and how they are fairing.

Summary Page

The next tool they give you is called the Allocation page. This page gives you a graphical insight into what your money can do depending on how you invest in stocks and bonds over a period of time. This is useful because it helps you to determine what your outcomes would look like depending on the approach you decide to take. It also helps to see what your money could do the longer you leave it in.

Allocation Page

The last tool that Betterment gives you to help with your portfolio is the Analysis page.  This is the tool for the investment geeks out there. It gives you a wide variety of graphical choices to help you see how your money is doing over time. The simplest way for me to explain this tool is that you can analyze your returns in comparison to how the market is doing. To be perfectly honest, I really was a little overwhelmed by the Analysis tools, as I really didn’t understand them that well.

Analysis Page


You are probably wondering, how much does this cost? Well, as Betterment puts it “next to nothing”, which is definitely true. You pay a flat fee of 0.3% to 0.9% of your average balance depending on how much money you have in your account. There are no minimum balances, no transaction fees, and no holding periods. Betterment also lets me change my allocation whenever I want to and doesn’t have any restrictions on how many times I want to change.

Cost of Betterment

Is Betterment For You?

Let me say this, I love using Betterment. But I say that because I like that I can invest my money in a safe way, have some control over it, and know that my risk is minimal at best. I also like the simplicity of it and how easy it is to change course if need be. For me, investing is not something I am looking to get rich in. I just want to take some of my money, invest it, and get a nice return after a while.

If you don’t fit my profile, that doesn’t mean that you cannot use Betterment. The cool thing about it is that it is made for a wide variety of investors, from ones who are just trying it out to ones that are serious about putting away some serious money for the future.


I think if you are looking to start investing some money, but don’t know a lot about it or don’t want to deal with the hassle and paperwork that goes into signing up with a bank, then try out Betterment. While you are at it, you can also check out their free iPhone app as well to help manage your portfolio. Betterment is not complicated, is easy to use, and does not cost you a lot. To me, that is a great reason to sign up and start making some money!

Read the Original Article

This article originally published December 22nd, 2011 on Web.AppStorm


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