Tools I've Built
The purpose of the un-budget is to make your spending patterns more transparent so you can make informed financial decisions. Instead of setting limits on your spending as many budgeting tools do, this gives you a clear picture of what it really costs to run your life by highlighting the expenses you're committed to, the expenses that vary and the extraordinary expenses that lie outside of your monthly norm. You can check a few graphs to get the big picture of how you’re doing and then dig into outlier data if something seems amiss.
The Options Viewer
The purpose of the Options Viewer is to help you see the impact of major life decisions on your long term financial picture by allowing you to run scenarios. It has helped us asses questions like, 'how long could I stay at home with the kids?,' 'how much can we set aside for the kids college fund?,' and 'could we take more vacations?' You can also use it to gauge the funds you will need to maintain your current lifestyle into the future.
Tools I Like
Robo advisors provide automated, algorithm-based portfolio management advice and many use ETFs as a primary investment vehicle. The main benefit is that they help you figure out how to allocate your portfolio for much less than you’d pay a fund manager who would typically take 1%+ to invest on your behalf. Many, though not all, have much lower investment minimums than traditional players. Tax loss harvesting to lower your tax bill is also a benefit they frequently offer. Here's a list of what has stood out to me so far based on accounts I have created with various players (some free, some paid).
- Wealthfront stood out to me initially because of it’s leadership team (including their chairman Andy Rachleff who is also a GSB entrepreneurship prof and Burton Malkiel who is a renowned financial thought leader and author of "A Random Walk Down Wall Street"). Along with Betterment, they are also one of the largest players.
- Vanguard Personal Advisor Services is interesting because it offers access to a financial advisor and it is built on top of the Vanguard platform. Even though I totally get the value of having an algorithm figure out the best investment allocation for you, I also like the idea of having an actual human to reach out to. Note that I don’t actually have an account with them, so if you do, I’d love to hear what you think.
- Personal Capital gives you access to a set of tools that are pretty well designed. Specifically I appreciated the aggregate view of your portfolio and the retirement calculator. I also like the weekly market recaps you get if you subscribe to their blog “Daily Capital.” Like Vanguard Personal Advisor Services, Personal Capital offers access to a personal advisor for people who invest with them, though at a higher rate.
- FutureAdvisor grades your portfolio across performance, diversification, fees and taxes and then clearly highlights what actions you could take to do better. I find their weekly newsletter, on the other hand, to be pretty uninteresting and a real drag to read.