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Have you been trying to start investing and found it overwhelming? I hear you; investing can be complicated.
Investing would have been helpful to learn in school, but we did not. So investing, like most personal finance topics, is something we are left to figure out on our own.
Crazy right? Well, here is a full Wealthfront review that will help you become an investor with a click of a few buttons, don’t worry about what Wealthfront is just a little late on this article.
“How do I invest?” is the question I kept asking myself when I saw people on the internet talking about putting money into investment accounts, the market, stocks, bonds, and some other terms that sounded like a foreign language.
Essentially, investing is putting your money to work because you can receive a return on that original investment over time.
This post is about the Wealthfront review, a Robo-advisor that helps you get started with investments.
WHY SHOULD YOU INVEST?
Investing is a powerful way to grow your financial wealth; stock and mutual funds, which are the things you would invest in in the stock market, historically have shown to provide significant returns over a long period of time.
Something to consider is investing in the stock market has its ups and downs, and they are often not returning many year to year, but over the long run, it provides exponential growth for your money, much more than any other option out there.
HOW DOES INVESTING WORK?
As you know, many publicly traded companies offer the general public access to buying a piece of their shares (owning a part of the company). As those companies become more profitable, you also get to enjoy a bit of that growth.
Once you become a shareholder of a particular company, you have stakes in the profits, the more growth, the more returns, the more volatile the economy becomes, the fewer returns, and so on.
The market in which you can buy, sell and receive earnings can be affected by many factors: economy, politics, environment, and natural disasters, which is why it can be risky and unpredictable to invest.
And this is one of the reasons why if you are interested in investing, you should at least try to understand the basics and make educated decisions about your purchases, sales, etc.
Here is a fundamental process of how investing works (for my visual folks)
- You buy a stock or share from a company, OR you loan that company money in simple terms so they can have more capital to operate or expand.
- The company becomes more profitable, sells more, expands more, and makes more money.
- Due to that growth, your original investment is now worth more because of the power of interest attached to that initial loan, and so now you have made a profit off of your actual seed money.
You can also invest in other things like bonds, real estate, art, currency, etc. This stock example was just laid down in the picture.
HOW DO YOU GET STARTED INVESTING?
If you are reading this article, it might be because you are a beginner, and although there are many ways to get started investing, Robo-advisors could be the best way to get started.
At least until you understand more about the stock market, how things are related, and how it affects the money you initially invest.
And this is where Wealthfront comes in.
Wealthfront is one of the most regarded Robo-advisors, extremely reputable, and super user-friendly.
WHAT IS WEALTHFRONT
Wealthfront is an investment platform created with the beginner investor in mind. Investment management is automated through their platform.
If you are just getting started with your journey or are an experienced investor looking for a hands-off approach, Wealthfront was created for you!
What I love the most about Wealthfront is that Dan Caroll and Andy Rachleff founded it with the everyday people in front of the platforms’ design. They wanted to give access to the wealth-building mystery that is the stock market.
This type of management is usually reserved for wealthy and or experience stock traders.
In January 2022, it was announced that the Swiss investment bank, UBS, had agreed to purchase Wealthfront, but it will continue to operate as its entity to the outside world.
WHO IS WEALTHFRONT BEST FOR
- Cost-conscious investor
- New to investing
- Hands-off approach investor
- Access to free financial tools
- Top-tier wealth management without the price tag
Wealthfront is considered to be a top tier and ranks alongside the best Robo-advisors in the market; they offer sophisticated and valuable portfolio management.
Welathfront has a very intentional series of questions to determine what type of investments you should make, and it makes smart suggestions based on what it is you are looking for when it comes to your assets.
They also give you the option to automate transfer to invest regularly and make it easy with the set-it-and-forget-it approach.
And this approach can be efficient at the start of your investment journey, as investing in the stock market can be a very emotional experience; it is best not to be checking your investment daily as that can affect the performance of your assets.
IMPORTANT TAKEAWAYS AND MAJOR PROS ABOUT WEALTHFRONT
- Waterfront offers core, socially responsible, smart beta, and other customized portfolios.
- Cash accounts offer up to $1M FDIC insurance – in case something were to happen to the economy, the government will vouch for your money in the account up to 1M
- Direct portfolio with ETFs and cryptocurrency funds
- Cash management through HYSA – a great way to earn higher interest rates on your saving, much more than a traditional savings account.
- Available on Android and iOS – making it accessible to anyone regardless of income; I mean, not everyone can afford an iPhone.
- Up to $5000 of free assets management as a promotional sign-up
- Low ETF expense ratios – Wealthfront is very transparent about its fees for investment services; the management fees come in at an industry standard of 0.25 percent, or $25 annually, for every $10,000 invested.
- Daily tax-loss harvesting – when you sell a losing investment to gain tax advantages and offset another gain.
- 529 college savings plan management.
HOW TO OPEN AN ACCOUNT WITH WEALTHFRONT AND PRICING/FEES
You can sign up on your phone or computer.
The first step is to provide basic personal information, including your pre-tax income and current savings.
Then you will need to choose your type of account, regular investing, retirement, banking, or education.
I recommend that you start with one goal first, and you can do add-ons later once you are more familiar with the process of investing.
If you are unsure what to choose, Wealthfront will make recommendations for you and educate you on those choices.
They will also ask your risk tolerance through a series of questions determining your comfort level with how aggressive or conservative you want to be with the money invested.
|Management fees for 6-figure accounts
|Management fees for $5000
|$12.50 or free of you take advantage of their promotions or are an employee of a company that has a relationship with Wealthfront
|Average of 0.8% – 0.11%
HOW IS YOUR WEALTHFRONT PORTFOLIO MANAGED
Once Wealthfront helps you determine your risk tolerance, it selects customized portfolios with asset allocations remaining the same regardless of the balance on the investment account.
Wealthfront will also adjust the money allocation as the market fluctuates, money gets withdrawn or deposited, and dividends get reinvested.
Wealthfront’s daily tax-loss harvesting is one the most fantastic features of how they manage your portfolio because their goal is to help help you minimize the amount of taxes you are paying.
The tax-loss harvesting is not something you might see an impact on immediately, but it adds up with your long-term capital gains.
KEY PORTFOLIO MANAGEMENT FEATURES
|To keep you on track with your goals, and inconsistent/variant deposits or withdrawals.
|Tax and statements available on the website version.
|You can link/sync/consolidate accounts to receive your net-worth balance, savings, and spending and other planning information
PERSONAL EXPERIENCE WITH WEALTHFRONT
When I first started to toy with the idea of investing in the stock market, I began to do tons of research on where I could get started.
I needed a place that was going to spell out the process for me.
Also, long-term fees were a huge concern, and Wealthfront kept coming up as an option, and what sold it is the fact that they have amicable relationships with my employer, and they offer to manage my investment for free up to $75,000.
Sweet deal, right?
Another essential aspect I was looking for was hands-off investments; although I coil manually invest, at this time of my life, I cannot do so in a way that would benefit me.
And studies have shown that actively managed portfolios and hands-off approaches to investing have minimal impact on the ROI at the end of the life of the investment.
User experience with the interface is also a huge plus, and it is like using a social media account; super intuitive, visually pleasing, and straightforward.
Would you like to open up an account?
You can get up to $5000 managed for free if you use the link in this article.
FINAL THOUGHTS ON THIS WEALTHFRONT REVIEW
Wealthfront stays top of mind with innovation and technology, has grown to complete financial planning, money, and investment management platform, and is best for those who would like to experience an all-in-one digital investment experience.
Waterfront has an edge in creating value, where anyone, regardless of whether you have an account with them or not, can access educational materials around personal finance.
Wealthfront offers a fully automated and robust hands-off investment experience. If you are looking to get started with investing in the stock market, this Robo-advisor might be the perfect solution for you.
I hope this has served you in the best way because I am sure this is the right place if you have ever wondered about the following:
- Make money online
- Online jobs for 16-year-olds at home
- How to make money as a teenager
Please leave your comments and questions below; I read every single one. Also, if you have suggestions for future posts, I am happy to consider them.
This blog post was all about how to make money online under 18. In this post, I revealed the most effective and tried strategies I implemented to create a plan I can finally use to become financially independent.
DISCLAIMER: I AM NOT A FINANCIAL ADVISOR. INFORMATION FOUND ON THIS SITE IS AN OPINION BASED ON MY PERSONAL EXPERIENCE AND SHOULD ONLY SERVE AS EDUCATION AND NOT PRESCRIPTIVE ADVICE. PLEASE CONSULT A FINANCIAL ADVISOR.