Acorns vs Betterment (Update 5)

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It has been at least 3 months since I last posted into my financial blog on my journey with Acorns and Betterment. Well I can happily say both have been a large success so far and I am extremely optimistic about what else is to come with the two new emerging platforms. Both are showing gains for me and still showing different characteristics.

When I first started my journey on Acorns I jumped into it pretty quickly but obviously when you get into an investment of some sort your first objective is to find a way to reach $100. That was accomplished pretty quickly as I quickly ran my account up to $250 in the first two months. The second objective or milestone in a platform like Acorns is to reach $500. Reaching $500 took me a bit longer but I kept on depositing and have enjoyed seeing my returns keep getting bigger and bigger. And finally my most recent milestone was reaching $1000. I more so forced the action and pumped in $290 in a $90 and $200 deposit to force the action. And now I am pretty satisfied with the fact that I have over $1000 in this great micro investing tool for young millennials trying to carve a path into the highly complex stock market. I am currently posting $1037.57 with a 4.2% return since opening up my account in September. Quite fascinating to me. I have slowed down my roundups and weekly deposits though. My main objective was to get to $1000 and then start figuring out how I want to recalibrate my thought process on Acorns and how I am going to reach my loftier $1500-$2000 milestone goals. I currently deposit $8 a week and do manual round ups which average out to around $9-$11.50 a week including my $8 weekly deposit. Which is still exceptional in my mind. I signed up for early access to the web based platform and it is extremely crisp and eye appealing they really do have a better web based platform than Betterment currently. All in all Acorns has been great fun and entertaining for me. I do consider Acorns to be my for fun account and take greater care of my Betterment account. I just wish Acorns offered an affiliate program of sort. I love showing people this great tool. I will say though only 16% of my funds in Acorns were accumulated from Round Ups, the rest of the funds were from me depositing the cash into the platform in larger sums than the micro investments.

While Acorns has been great fun Betterment has been on the rise for me also. I joined both platforms at nearly the same time and have been juggling both hand in hand. Betterment has been posting a larger return than Acorns and I even joined Betterment a couple days later. On this day today I recently decided that I was going to shift my portfolio from 90% stock 10% bonds to 95% stock 5% bonds. I decided this was an ethical play on my part because I recently just turned 25 and feel like I have enough time in my mid twenties to make a pretty aggressive play. I also have my Acorns set to its most aggressive feature. My reasoning behind this play is simply because countries like India and China are still growing rapidly and I need to be apart of the BRIC markets while Im still young. So by increasing my risk another 5% I am opening up to more emerging markets. My portfolio should be reset to 95% for tomorrows opening. I took a screenshot of my 90% holdings today and will track the difference between the two portfolios. I am hoping that I can hold my portfolio at 95% stocks until I am at least 28 years old but am hoping to be able to carry it until I am 30 and then think about dropping back down to 90% stocks. Currently I have pumped my account on Betterment up to $1530.23 with a monthly deposit of $100 set. I am currently thinking about upping my monthly deposits to either $125 or $150 but still trying to figure out how I need to allocate my funds with Acorns, Lending Club, and future IPOs that I want to be able to buy into. I opened up a Prosper account also but think I am going to pass on Prosper. Like Acorns I opened up my Betterment account in September and am posting a generous 5.5% in returns! This is currently the highest that my account has ever been at so anything above 5.5% from here on out is a new high for me. Q1 was pretty soft for me on my dividends but It was still better than a savings account.

So if you are curious to know which platform I currently prefer it is equally weighted between the two platforms and I recommend either one. I usually recommend Acorns to more people though simply because you can get into the market for a cheaper price as long as you are willing to place between $50-$75 into your Acorns account every month. I do consider Betterment to my more serious platform between the two but am currently in love with Lending Club and getting ready to make a huge splash with them in the next couple of months, but that will be in another article I write. I would like to also thank Betterment for the sweet shirt they gave me!

Buying on the Dip

It’s December 2nd and my deposit processed this morning for todays trading to begin. I had a $100 deposit process into my Betterment account and was happy as usual on my timing. The day before the market took a pounding and I ended up being down 1.5%. I had a solid return on the dip. If you take a look at the chart below I zoomed in on the VOO which is the Vanguard S&P 500 ETF

So first we take a look at the entire week which during this period dates between November 25th and December 2nd. Look at that massive plummet due to oil prices on the 1st of the month. Incredible because on that day Apple also ended up down -3.25% and even today ended up being down another -.38% today. A lot of people think the sell off was due to people just taking profits, but also because Black Friday and Cyber Monday sales didn’t produce what share holders were hoping for. Which if that is the cause that seems a bit silly due to the fact that Apple rarely puts anything on sale. While I titled this buying on the dip their is know actual way of knowing if you are going to buy on the dip until the market actually opens. I just seem to get lucky and end up processing buys on the dip. These buys have brought me solid rewards though.

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FullSizeRender                                             The S&P 500 is still looking for another 184 points to close out the year. Would be pretty awesome if it closed out at the projected 2200, but who really knows. I recently posted an article on Millennials in a Bear Market. A portion of it was about rising interest rates and trying to situate myself during that time period. I did a bit more research and the consensus seems to be that even when interest rates do rise the rates wont rise to anything above 2% and it will take a good amount of time to even reach 2%. So I do not think I have to sound the alarm that much. A lot of analyst think 2015 will be a pretty calm year, but thats fine hopefully it gives me a chance to situate more funds on the low and reap the rewards the following years.

On a side note I have decided that sometime in the near future I am going to open a investment fund specifically for Black Friday. Im gonna create it on Betterment and just set it to a target goal of $1000.

Opportunity Costs and Pessimism

GenerationYFinance

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When you decide to do something you have to take a look at what options are being presented to you. Everyone and I mean everyone has problems and situations they just wish that they could make disappear. I have a good friend who only looks at the positive side of things. I don’t hang out with him all the time because we have completely different lives and schedules but he is one of the most positive guys I know. He is always volunteering to do something, always looking to help less fortunate, and always smiling. Sometimes I wonder what the hell is going through the dudes head but only God knows. His hashtag is

#staypositive, instagram, keepin_1T_LIT

The millennial generation is one of the most if not pessimistic group of individuals. I used to be extremely pessimistic until I started noticing I don’t have be pessimistic about things. All I ever see on my Facebook wall are negative, degrading, and situations where people want you to feel sorry for them. Im still learning a lot at my young age, but I do think I am pretty wise for my age. I had my epiphany for change this year and started putting my brain to work a lot harder. You can not find out who you are, you have to change who you are. And I have decided that the biggest thing I need to worry about right now is being able to build a portfolio for me to be able to draw from when I am ready to retire. It isn’t a retirement portfolio but saying so and so is only for retirement and so and so is only for savings seems rather contradictory to me. What ever money one puts away into an investment account can be considered retirement money. As I get a bit older I will eventually open one but for now I am just funding two small investment portfolios. I do not put a lot of money into them, I don’t make buckets of money, and my living expenses are rather high since I live in San Francisco. The fact that I am even able to set something aside blows my mind.

My approach is extremely broad compared to what most financial experts would suggest though. The only reason I am able to get away with how I approach investing is the fact that I am extremely good with finances and very rarely miss a beat when it comes to the flow of money. I take my approach in a way or learning and just analyzing different situations that can arise for me as I get older. After all now is the time for me to create a layout. Most financial experts all suggest paying off all credit card debt before even investing. Which this is pretty true I will admit that but I look at the big picture and opportunity costs that await me. When I first started dabbling with credit cards I never even looked at my credit score when I applied for my first two cards. Ive had those cards for maybe 5 years now, but looked at my credit score my once or twice a year until this year. This is the year I started getting an actual understanding for my credit score and what it meant to me. So I was essentially just using a credit card not even aware of the fact that I was actually helping myself. Since I did this I was able to obtain basically the best credit cards on the market. Cards like the American Express Blue Cash , Citi Bank Simplicity, and Discover IT. Ive noticed that pretty much anyone can qualify for a Discover IT card, but they have at least four different types. If you are on the market looking for a card I simply have to say that Wells Fargo and Bank of America have absolutely nothing to offer and you should pretty much avoid opening an account with them.

Now while I am still paying off credit card debt I might as well use the cards and get some cash back rewards right? I just cashed in close to $150 in rewards to pay for a couple things and invested some of it into my Acorns account. Thats free money. And I am going to happily accept free money when ever it is giving to me. And I’m not paying any interest on these cards because I never miss a payment. Ninety percent of my debt is floating on my Chase Slate card which is a 0% APR card so I still have plenty of time to pay it off and don’t really worry about it either way because If I somehow for some unlucky reason have to Ill just transfer it to another 0% APR card with a 0% Balance transfer. It really isn’t that big of a deal.

When I look at my generation it really just amazes me how screwed most of us are. This is just because we as a group can’t seem to see the brighter side of things, we cant seem to learn how to attack wide open situational options we have. And most of us suck with money. We just get so tempted to keep up with the so called Joneses and spend far more than we can even afford or handle. Im really just thankful for the fact that I am getting situated at a young age and not six years from now when Im thirty. And yes we will have the smartest and brightest kids when we become parents. I refuse to think that any other generation will be smarter than our own kids when we start families. People that only look at the negative side of things are the same people who get stuck, the same people who dig holes and have no way of digging themselves out, and the same people who think they deserve the world. The optimistic people are the people who look at situations presented to them currently and situations that will arise into the future, the people who look for positive things, the people who stay on the grind and appreciate what they have.

Update on my Acorns vs Betterment Accounts.

Acorns is currently at $411.70 with $19.79 since pending that will deposit into my account I assume on Monday. I have posted a 4.5% return in only 10.5 weeks. 4.5% may not seem like a lot but it takes a shit on what savings account offer you. Im currently up $17.57. Which is extremely satisfying.

Betterment is currently at $742.20 with $200 posting on monday Im pretty sure. I have to double check my spreadsheets, but Im pretty sure I have $200 more going in on Monday but for sure I have $100 going in on Monday. Betterment altered their returns platform it says I am -0.2% right now since they do time weighted returns now. Im still trying to get an understanding for the time weighted returns, but according to their old platform which is the same as Acorns Im up 4% and have a $27.20 profit so far. Again all in 10 weeks.

I should end the year with a combine total of at least $1500 between the two platforms. And $1600 if I somehow go crazy and find a spare $100.