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Betterment Review: Simple Investing For Everyone

February 23, 2012

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Jon

Let’s face it, investing is complicated, time-consuming, and just scary sometimes, especially when it’s looked at for the first time and Betterment believes it has the answer to these problems.

The typical brokerage firm can be downright intimidating for new investors and too costly for an experienced investor. A Betterment account eliminates the intimidation, providing easy to use tools at a low-cost, all while maintaining a goal oriented, long-term approach to investing your money. It sounds like the perfect combination for the beginner and seasoned investor. But is it?

What Is Betterment?

Betterment is an investment service aimed at simplifying the process of investing your money. I’d classify it as an alternative brokerage. Like any normal brokerage account, you still invest your money in the stock market. Only Betterment does all the hard work of researching where to invest your money. I don’t know of a discount broker that does anything like it. Continue Reading…
The Payroll Tax Cut: What Are You Doing With Your 2%?

February 21, 2012

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Jon

Last week both the House and Senate approved the payroll tax extension, sending it on to the president to sign into law. Which will happen amid a bunch of hoopla and congratulations about how your elected leaders saved your wallets from the plight of emptiness.

The law, as it did last year, will extend the 2% reduction in the payroll tax that funds Social Security through the end of the year. Which sounds great. Who doesn’t want more money from their paycheck.

So what’s the point of the tax cut? The government lets you keep 2% of your income in exchange for you to spend it. The theory is that spending your 2% will help the economy grow more quickly. Sounds fair enough, except that money is supposed to be put towards retirement. At least someone’s retirement with the inefficiency of the Social Security System.

The payroll tax cut is a terrible short-term fix that will only cause more problems down the road when the difference has to made up. Which is the inherent flaw. I don’t see any logic in spending retirement money before we retire. But that’s the government in a nutshell. Continue Reading…
Happy Hour: Swimsuit Indicator, Aristocrats and How Did I Get Here Google?

February 17, 2012

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Jon

It’s happy hour again. Time to kick back, relax and check out some of the more interesting things that came out this week.

The SI Swimsuit Indicator

Sports Illustrated released its annual swimsuit issue this week, with the big reveal of the cover model on the Late Show with David Letterman. Wall Street’s need to analyze everything, has found the Sports Illustrated Swimsuit Indicator. Seriously? The S&P 500 has performed better with an American on the cover than without 88.2% of the time, with an average return of 14.3%.

The Aristocrats

The royalty of Wall Street and many a portfolio, the Aristocrats list was also released by CNBC this week. It’s a list of stocks, not people, so nothing to gawk at really. Unless you are a fan of high quality dividend paying stocks. You see, an Aristocrat is an S&P 500 stock that has consistently paid and raised its dividend every year for the last 25 years. It’s a great place to start if you are looking for dividend stocks.

How Did I Get Here Google?

This site gets a few visitors from Google search every month. Continue Reading…
How Tax Brackets Work

February 16, 2012

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Jon

You can’t go through tax season or file your taxes without knowing how tax brackets work. The U.S. has a progressive tax system that does one thing well, it tells you the tax bracket you fall into, but it doesn’t tell you the whole story.

While someone may sit in the 25% federal tax bracket, that doesn’t mean they actually pay that much in taxes. In fact, they pay less than 25% in taxes because of how the tax system works. Let me explain.

Marginal Vs. Effective

The tax bracket you fall into is your marginal tax rate. The marginal tax rate represents the tax you pay on the last dollar you earn. But it’s not the tax rate you pay on every dollar you earn.

To find the tax rate you pay on your total taxable income, you need to find the average tax rate, called your effective tax rate. To do that, you need a bit of math.

How It Works

The best way to explain it is with an example. I’ll be using the 2012 federal tax brackets for a single person as a reference. For this example, assume this single person, let’s call her Sue, has a taxable income of $500,000. Sue’s income is far above average (because I wouldn’t be able to use the entire table below that I labored over for hours). Continue Reading…
Set Up Automatic Saving For Success

February 14, 2012

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Jon

The biggest reason anyone fails at their finances is because they never really start. Sure, they may get through a few weeks. But then it falls off. We lead busy lives and sometimes we let things slide. So it becomes tomorrow’s problem.

It happens with exercising, dieting, curbed spending, and how we save. It’s something that we have all done at some point and it’s a weakness everyone deals with at some point in their lives.

So, instead of trying harder next time, lets take advantage of what’s available, to do the work for us now.

An automatic saving plan will successfully end all the worry and procrastination we have with our finances and force habit change. Let’s work smarter and start automating our savings.

The Automatic Saving Plan

Most people get paid by direct deposit and it happens on a regular schedule. Continue Reading…
Happy Hour: It’s Bacon!, Filling A Loophole, and 101 Posts

February 10, 2012

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Jon

Welcome to Happy Hour and our 101st post. Something I’d never imagine happening based on how much I never wrote before starting this endeavor. Even piecing together a few words into a phrase was a long shot not too long ago. Anyways, here are some of the more interesting reads I came across this week.

It’s Bacon!

If you happen to live near a Jack In The Box, here is a limited time only opportunity for you. The company has come up with a drink that only Homer Simpson would love, a bacon milkshake. If you are craving a pork smoothie, the new bacon shake won’t be listed on the menu. It’s a secret item, just ask for it when you order.

Filling A Loophole

Our Congressmen and woman will have to find another way to profit on their ability to influence laws, government contracts, and more. While Martha Stewart had to sit in jail after avoiding a $45,000 stock loss, our elected officials have been able to profit from nonpublic government information for decades. This might be coming to an end, if these same elected officials actually approve a bill to end insider trading off of government information. Guess we’ll find out just how greedy they are? Continue Reading…

Betterment Review: Simple Investing For Everyone

What Is Betterment?

The Payroll Tax Cut: What Are You Doing With Your 2%?

Happy Hour: Swimsuit Indicator, Aristocrats and How Did I Get Here Google?

The SI Swimsuit Indicator

The Aristocrats

How Did I Get Here Google?

How Tax Brackets Work

Marginal Vs. Effective

How It Works

Set Up Automatic Saving For Success

The Automatic Saving Plan

Happy Hour: It’s Bacon!, Filling A Loophole, and 101 Posts

It’s Bacon!

Filling A Loophole