Melissa Cohn agreed with LaCentra. Cohn is regional vice president and mortgage banker at William Raveis Real Estate, Mortgage & Insurance. After graduating from Smith College in 1982, Cohn got into the mortgage business, launching The Manhattan Mortgage Company in 1985. Since then, she has achieved the following: grown her business into the no. 1 … [Read more…]
Betterment and Betterment are not only two of the most popular robo advisors in the industry, but they may very well be the most innovative in the field. Though they represent two of the first robo advisors, both have built out their platforms and now offer robust portfolio options and other services to their clients.
Though they each have their own nuances–and specializations–you really can’t go wrong with either platform. Each will take complete control of your portfolio, managing every aspect of it for a very low annual fee. When you sign up with either service, your only responsibility will be to fund your account on a regular basis.
But what if you’re either new to robo advisors or you’re considering a switch from another one? If you’re researching robo advisors, the information will inevitably lead to Betterment and Wealthfront. So let’s take a look at the two heavyweights in the robo advisor space and see which might be a better fit for your portfolio. Listen to the Podcast of this Article
About Betterment
Betterment is not only the original robo advisor, but its also the largest independent robo (along with Wealthfront), with $21 billion in assets under management. The company is based in New York City and began operations in 2008.
As a robo advisor, Betterment is an automated, online investment platform that handles all aspects of investment management for you. When you sign up for the service, you complete a questionnaire that will help determine your investment goals, time horizon, and investment risk tolerance. From that information, Betterment creates a portfolio of stocks and bonds to meet your investor profile.
They dont actually invest your money in individual securities, but instead through exchange-traded funds (ETFs), each representing a specific asset class. They can build an entire portfolio for you through about a dozen funds that will give you exposure to the entire global financial markets.
All this is done for a low annual management fee. Your only responsibility will be to fund that your account on a regular basis and let Betterment handle all the management details for you.
Better Business Bureau rates Betterment as A+, which is the highest rating in a range from A+ to F. The company also scores 4.8 stars out of 5 by more than 20,000 users on the App Store, and 4.5 stars out of 5 by more than 4,500 users on Google Play.
About Wealthfront
Wealthfront is, with Betterment, the largest independent robo advisor, and Betterment’s primary competitor. In fact, with over $24 billion in assets under management, its now slightly larger than Betterment. The company is based in Redwood City, California, and launched operations in 2011.
As a robo advisor, it works much the same as Betterment, creating a portfolio for you based on your answers to a questionnaire when you open your account. Wealthfront will also manage your account using a small number of ETFs spread across various asset classes. But on larger accounts, they’ll also add individual stocks to get greater benefit from tax-loss harvesting.
Like Betterment and virtually all robo advisors, Wealthfronts basic investment strategy is based on Modern Portfolio Theory (MPT), which emphasizes asset allocation over individual security selection.
Similar to Betterment, and really all robo advisors, your account will receive full investment management for a very low annual fee. Your only responsibility will be to fund your account on a regular basis.
Unfortunately, Wealthfront has a Better Business Bureau rating of F, due to unanswered complaints. However, the company gets 4.9 stars out of 5 from more than 9,000 users on the App Store, and 4.8 stars out of 5 by more than 2,700 users on Google Play.
Investment Strategies Betterment vs Wealthfront
Betterment Investment Strategy
Betterment offers two plan levels, Digital and Premium. Premium is available for minimum account balances of $100,000, while Digital is open to all account balances. Like many robo advisors, Betterment has evolved past building and managing a basic portfolio comprised of a mix of stocks and bonds.
For example, if you choose the Premium Plan, you’ll have access to live financial advisors. But there are many other services and plans to choose from.
Read More: Betterment Promotions
Basic portfolio mix
Your portfolio will be invested in as many as six stock asset classes/ETFs and eight bond asset classes/EFTs.
Stocks:
US Total Stock Market
US Value Stocks Large Cap
US Value Stocks Mid Cap
US Value Stocks Small Cap
International Developed Markets Stocks
International Emerging Markets Stocks
Bonds:
US High-quality Bonds
US Municipal Bonds
US Inflation-Protected Bonds
US High-Yield Corporate Bonds
US Short-term Treasury Bonds
US Short-term Investment-Grade Bonds
International Developed Markets Bonds
International Emerging Markets Bonds
Use of value stocks
Notice that three of the six stock asset classes involve value stocks. This is a specialization of Betterment and represents a time-honored stock market investment strategy. Value stocks are investments in companies with stock prices that are low in relation to their competitors by various standard measurements. But the companies are deemed to be fundamentally sound, and therefore likely to outperform the general market once the investment community realizes the true value of the stocks.
In this way, Betterment makes an attempt to outperform the general market, such as the S&P 500 or even some broader indices.
Smart Beta
This is another investment strategy Betterment uses with the potential to outperform the general market. This specific portfolio is managed by Goldman Sachs. Smart Beta is a form of active portfolio management, which seeks high-quality companies with low volatility, strong momentum, and good value.
Since its a higher risk/high reward type of investing, it requires a minimum portfolio of $100,000.
Socially responsible investing (SRI)
This is an investment option increasingly being offered by robo advisors. However, with Betterment only a portion of your portfolio will be invested in SRI. They replace the ETFs in the International Emerging Market Stocks and US Value Stocks Large Cap with ETFs that specialize in socially responsible investing in those sectors.
Learn More: The Pros and Cons of Socially Responsible Investing
Flexible Portfolios
If you want more control over your investment portfolio, you can choose this option. It allows you to adjust the individual asset class weights in your portfolio allocation. Its also designed for more advanced investors and gives you an opportunity to increase allocations in asset classes you believe are likely to outperform the market.
BlackRock Target Income
For investors looking for income and safety of principal, Betterment offers this portfolio, which consists of 100% of bonds. There is some risk of principal in this portfolio but it’s designed to be minimal. You can even choose the level of risk and return you want. It won’t provide the type of long-term gains you’ll get from a stock portfolio, but it will offer the kind of steady income that will work especially well for retirees.
Tax-loss Harvesting
Tax-loss harvesting is a year-end strategy in which asset classes with losses are sold (and later replaced with comparable ones) to offset gains in winning asset classes. The strategy helps to defer taxable capital gains on growing asset classes.
Betterment makes this strategy available on all account balances. However, it’s only offered on taxable accounts since it’s completely unnecessary for tax-sheltered retirement plans.
Betterment Everyday Cash Reserve
If you’re looking to add a cash option to your investment portfolio, you can do it through Betterment Cash Reserve. The account is eligible for FDIC insurance up to $1 million. The minimum deposit is $10, and offers unlimited transfers, both in and out of your account.
Betterment Checking
The Betterment Checking account gives you the flexibility to manage your money in a way that best fits your financial goals. You’ll get this account with a debit card and you can use it to pay in person or online. You’ll also get FDIC insurance on your money.
The Betterment Checking account is an innovative way to manage your money. It’s faster, more secure, and requires zero minimum balance requirements. You can now deposit checks using their streamlined mobile app. Just take a picture and deposit checks will be there for you on the other side.
Wealthfront Investment Strategy
Unlike Betterment, Wealthfront has a single plan for all investors, with an annual management fee of 0.25% on all account balances. And like Betterment, Wealthfront has expanded its investment options menu in many different directions.
Basic Portfolio Mix
Wealthfront uses 11 asset classes in the construction of its portfolios, including four stock funds, five bond funds, plus real estate and natural resources.
The allocation looks like this:
Stocks:
US Stocks
Foreign Stocks
Emerging Market Stocks
Dividend Stocks
Bonds:
Treasury Inflation-Protected Securities (TIPS)
Municipal Bonds (on taxable investment accounts only)
Corporate Bonds
U.S. Government Bonds
Emerging Market Bonds
Alternatives:
Real Estate
Natural Resources
Use of Alternative Investments
Wealthfront includes real estate and natural resources in its portfolio composition. The real estate sector invests in companies that provide exposure to commercial property, apartment complexes, and retail space. Natural resources are held in ETFs representing that sector.
The combination of the two offers a stronger diversification away from a portfolio comprised entirely of stocks and bonds, largely because they offer protection in an inflationary environment. It’s possible for these sectors to perform well when the general financial markets are not.
Smart Beta
The Smart Beta option attempts to outperform the general financial markets. The strategy deemphasizes market capitalization in the creation of a portfolio. For example, rather than using the capitalization allocations of certain companies within the S&P 500, the strategy might increase some allocations and decrease others. It’s more of an active investment strategy and requires a minimum investment portfolio of $500,000.
Wealthfront Risk Parity
This is another investment strategy for investors with larger accounts and a greater appetite for risk. Its been shown to provide higher long-term returns, but it may use leverage to increase those returns.
Stock-level Tax-loss Harvesting
Tax-loss harvesting is available on all taxable investment accounts. But Stock-level Tax-loss Harvesting is available to larger accounts to provide more aggressive tax deferral.
This is a fairly complex investment strategy, but it involves the use of individual stocks to take greater advantage of tax-loss harvesting. The use of individual stocks will make it easier to buy and sell securities to minimize capital gains taxes. Depending on the specific plan, the required minimum investment ranges between $100,000 and $500,000.
Wealthfront Path
This is a software-based financial advisory, providing you with financial planning tools. They can help you plan for retirement or saving for the down payment on a house or a college education for one or more of your children. The apps run what-if scenarios, that can make projections based on various savings levels for each of your specific goals.
Though it doesn’t offer live financial advice, the service is free to use.
Wealthfront Cash
You can open an interest-bearing cash account with Wealthfront Cash Account with just $1. There’s no market risk, no fees, unlimited free transfers, and your account is FDIC insured for up to $5 million. The account currently pays 4.30% APY and provides a safe, cash investment to go with your stock portfolios.
And now, Wealthfront Cash allows you to get your paycheck up to two days early when you set up a direct deposit. They’ve also implemented the ability for you to invest directly into the market within minutes, straight from your Wealthfront Cash account. That means you can get paid early and immediately invest – giving you about extra days of investing each year.
Read more: Wealthfront Cash Account review
Wealthfront Portfolio Line of Credit
Much like a home equity line of credit, the Wealthfront Portfolio Line of Credit is secured by your investment account. You can borrow up to 30% of the value of your account for any purpose. There’s no prequalification since the line of credit is completely secured by your investment account.
The line of credit is automatic if you have a non-retirement account balance of at least $25,000. You can request funds against the line on your smartphone and receive them in as little as one business day.
Current interest rates paid on the line range between 2.45% and 3.70% APR, depending on the size of your account.
Retirement Planning Betterment vs. Wealthfront
One of the most common uses of robo advisors is the management of retirement accounts. Both Betterment and Wealthfront can manage all types of IRA accounts, similar to the way they do with taxable accounts. But each also offers some level of retirement planning.
Read More: Best Robo Advisors Find out which one matches your investment needs.
Betterment Retirement Planning
Betterment is strong in this category because in addition to their regular portfolios, they also offer income-specific investment options, like their BlackRock Target Income and Everyday Cash Reserve. The Target Income option in particular focuses on maximizing interest income, which is exactly what most people are looking for in retirement.
One of the advantages Betterment offers is that you can connect your 401(k) with your investment account. Betterment cant manage the 401(k) (unless chosen to do so by your employer through their 401(k) management plan), but they can coordinate your Betterment retirement account(s) with the activity in your employer plan.
And of course, if you have at least $100,000 in your Betterment account, you can enroll in the Premium plan and have access to live financial advisors.
But Betterment also offers its Retirement Savings Calculator to help you know if you’re on track for your retirement. By answering just four questions, they’ll be able to determine if your current retirement plan will provide the income you’ll need in retirement, taking your projected Social Security income into consideration. If it isn’t, it’ll let you know how much more you need to invest on a regular basis.
Wealthfront Retirement Planning
You can take advantage of Wealthfront Path to help you with retirement planning. You’ll start by linking your financial accounts so the program can get a better understanding of your finances. Recommendations to help you reach your goals are made based on the amount of regular contributions you’re making and the income you will need in retirement.
Path will analyze your spending patterns, your average annual savings rate, the interest you’re earning on those savings, as well as your investment and retirement contributions. It will also analyze the fees you’re paying on your investment and retirement accounts. Loan accounts are analyzed as well.
The information is assembled, and future projections are made. You’ll be given advice on any needed increases in savings for retirement contributions, as well as asset allocations. And perhaps best of all, since all your financial accounts are linked to the service, it will provide continuous updates on your progress toward your retirement goals.
Betterment Pros & Cons
No minimum initial investment or account balance requirement.
Reduced fee structure on larger account balances.
Use of value stocks seeks to outperform the general market.
Unlimited access to certified financial planners on account balances over $100,000.
Comprehensive retirement planning package.
Limited investment diversification, excluding alternative asset classes, like real estate and natural resources.
The annual management fee rises from 0.25% to 0.40% if you select the Premium plan.
The reduced fee structure on large account balances doesn’t kick in until you reach a minimum of $2 million.
Wealthfront Pros & Cons
Your account includes alternative investments, like real estate and natural resources. This offers greater diversification than a portfolio invested only in stocks and bonds.
The minimum initial investment is just $500. That’s not zero, but it’s an amount most small investors can comfortably start with.
Flat-rate fee of 0.25% on all account balances.
Larger accounts get the benefit of more efficient tax-loss harvesting strategies through Wealthfront Risk Parity.
The Wealthfront Portfolio Line of Credit lets you borrow up to 30% of the value of your non-retirement accounts at very low interest and with no credit check.
There’s no reduced management fee for larger account balances.
The retirement planning tool (Path) is an automated system and does not provide advice from live financial advisors.
Poor rating from the Better Business Bureau.
Bottom Line
We’ve covered a lot of territory and details in this side-by-side comparison of Betterment vs Wealthfront. The summary table below should help you to be able to compare the various services each offers with a quick glance.
Category
Betterment
Wealthfront
Minimum initial investment
Digital: $0 Premium: $100,000
$500
Promotions
Up To 1 Year Free
First $5,000 Managed Free
Management fees
Digital: 0.25% up to $2 million, then 0.15% above Premium: 0.40% to $2 million, then 0.30%
0.25%
Available accounts
Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and nonprofit accounts
Individual and joint taxable accounts; traditional, Roth, rollover and SEP IRAs; trusts and 529 accounts
Rebalancing
Yes
Yes
Dividend reinvestment
Yes
Yes
Tax-loss harvesting – on taxable accounts only
Yes
Yes
Socially-responsible investing
Yes
Available through Smart Beta ($500,000 minimum) and Stock-level Tax-Loss Harvesting ($100,000 minimum)
Smart Beta investing
Yes
Yes, minimum $500,000
Interest bearing cash account
Yes
Yes
Line of credit
No
Yes
Financial advice
Yes, on Premium Plan only
Automated only
Mobile app
Yes
Yes
Customer service
Phone and email, Monday through Friday, 9:00 am to 6:00 pm Eastern time
Phone and email, Monday through Friday, 10:00 am to 8:00 pm Eastern time
You’ve probably already guessed were not declaring a winner between these two popular roboadvisors. Both are first rate and you can’t go wrong with either. More than anything, your decision will likely come down to specific details–what features and benefits one offers that better suits your own personal preferences and investment style.
But one advantage that’s undeniable with both Betterment and Wealthfront is that not only is each a first-rate service, but they provide enough investment options and related services that they can accommodate your growing financial capabilities and needs well into the future.
For example, while you may start out with a basic managed portfolio, you’ll eventually want to get into higher risk/higher reward options as your wealth grows. As well, you’ll like the flexibility of having high-interest cash investment options, as well as low-cost or free financial or retirement advice.
We like both these services and are certain you can’t go wrong with whichever one you choose.
Betterment Cash Reserve Disclosure – Betterment Cash Reserve (“Cash Reserve”) is offered by Betterment LLC. Clients of Betterment LLC participate in Cash Reserve through their brokerage account held at Betterment Securities. Neither Betterment LLC nor any of its affiliates is a bank. Through Cash Reserve, clients’ funds are deposited into one or more banks (“Program Banks“) where the funds earn a variable interest rate and are eligible for FDIC insurance. Cash Reserve provides Betterment clients with the opportunity to earn interest on cash intended to purchase securities through Betterment LLC and Betterment Securities. Cash Reserve should not be viewed as a long-term investment option.
Funds held in your brokerage accounts are not FDIC‐insured but are protected by SIPC. Funds in transit to or from Program Banks are generally not FDIC‐insured but are protected by SIPC, except when those funds are held in a sweep account following a deposit or prior to a withdrawal, at which time funds are eligible for FDIC insurance but are not protected by SIPC. See Betterment Client Agreements for further details. Funds deposited into Cash Reserve are eligible for up to $1,000,000.00 (or $2,000,000.00 for joint accounts) of FDIC insurance once the funds reach one or more Program Banks (up to $250,000 for each insurable capacity—e.g., individual or joint—at up to four Program Banks). Even if there are more than four Program Banks, clients will not necessarily have deposits allocated in a manner that will provide FDIC insurance above $1,000,000.00 (or $2,000,000.00 for joint accounts). The FDIC calculates the insurance limits based on all accounts held in the same insurable capacity at a bank, not just cash in Cash Reserve. If clients elect to exclude one or more Program Banks from receiving deposits the amount of FDIC insurance available through Cash Reserve may be lower. Clients are responsible for monitoring their total assets at each Program Bank, including existing deposits held at Program Banks outside of Cash Reserve, to ensure FDIC insurance limits are not exceeded, which could result in some funds being uninsured. For more information on FDIC insurance please visit www.FDIC.gov. Deposits held in Program Banks are not protected by SIPC. For more information see the full terms and conditions and Betterment LLC’s Form ADV Part II.
DoughRoller receives cash compensation from Wealthfront Advisers LLC (“Wealthfront Advisers”) for each new client that applies for a Wealthfront Automated Investing Account through our links. This creates an incentive that results in a material conflict of interest. DoughRoller is not a Wealthfront Advisers client, and this is a paid endorsement. More information is available via our links to Wealthfront Advisers.
HIGH POINT – Reflecting on 2022, more than half of retailers said sales were up over 2021, which was considered to be a banner year buoyed by pandemic-fueled shopping. But expectations for how this year will turn out are less optimistic, with just 37% expecting another year of sales growth.
Nearly one-third of respondents to Furniture Today’s sister brand Home Accents Today’s survey expect 2023 to produce lower sales than the previous year, and nearly as many see them as flat. In last year’s survey, more than half – 53% – predicted sales would stay the same this year.
One action the majority of retailers – 59% – took in 2022 was to raise prices. The survey found 44% boosted tags by 6% to 10%, and one-quarter hiked them between 11% and 15%. For 2023, 2 % of respondents have already raised prices or plan to do so, while the same percentage are putting off an increase, leaving about half – 48% – as undecided.
Among those who did opt for higher pricing, all of them said they did so to pass along increases that came from their vendors. Nearly three-fourths – 71% – also cited inflation as a leading cause, while factors such as warehouse costs and supply chain played a much smaller role.
A couple of elements that could influence sales into the future are the growing popularity of sustainable and handmade goods. Products with a sustainability story were deemed very or somewhat important to their customers by 41% of those surveyed, prompting nearly one-fifth of retailers to say they seek out such items at markets.
Meanwhile, almost two-thirds of respondents said they already carry handmade or artisan products in their stores. A little more than one-third, 35%, devote between 5% and 10% of their inventory to artisan goods, while an evenly divided 24% said these items account for 11% to 20% or 21% to 30% of total inventory.
The above data is based on a Home Accents Today’s online survey of home accent, home, gift and interior designer-run retail stores and full-line furniture retailer readers of Home Accents Today and Furniture Today, fielded in June and July 2023. The research was conducted and analyzed by Strategic Insights. Based on the sample size, the survey results are considered qualitative rather than quantitative.
How would you feel if one spooky night you discovered your new home also housed a family of evil spirits or long dead ghosts?
Even if you don’t believe in haunted houses, there are plenty of people out there who do—or who just want to hedge their bets. But could a history of haunted happenings really hurt the value of your home when it came time to sell?
The numbers don’t lie
Of course, how your property is received all depends on its particular brand of spooky.
A couple of studies in recent years confirm that a reputation for hauntedness has an impact on values. A realtor.com survey found that only about about one-quarter of buyers are open to buying a haunted home, especially if they get a discount, while 38 percent would not consider a haunted home purchase.
Another study by Redfin found that homes located close to cemeteries take longer to sell, but that the wait might just be worth it, since they tend to sell for prices higher than identical homes located in the same city but at a greater distance from a cemetery.
According to a study by two business professors at Wright University, though, houses where murder or suicide have occurred can take 50% longer to sell and at an average of 2.4 percent less than comparable homes.
The rules of buying and selling haunted real estate
Rumors of ghosts raise the question of disclosure.
Most states require sellers to fill out a standard form, revealing what they know about the property’s physical condition. Although the wording may vary state to state, most real estate laws require sellers to disclose “material facts” such as structural concerns, the age of the roof and shingles, leaks in the foundation and walls, existing mold and mildew, and total square footage.
In a 1991 New York case, though, a buyer sued the seller and the seller’s realtor for failure to disclose the house’s ghostly reputation.
Before putting the house up for sale, the seller wrote about her bumps in the night for the local paper and Readers’ Digest, but the buyers were unaware of the home’s reputation. Although the court did not rule nondisclosure of the house’s reputation as fraudulent, it did allow the buyer to back out of his contract and get his down payment back.
So what does this mean for you?
You are not likely to see a “haunted” box ready to be checked off on any state’s disclosure form, but in many areas, sellers are required to obligated to disclose things that affect a house’s marketability. Thus, even if not required by state law, it is a good idea to inform prospective buyers about rumors or reports and what exactly you have observed, without drawing conclusions.
If you’re new to investing, the idea of getting started can be daunting. After all, you probably don’t have tens of thousands of dollars lying around to build a portfolio and feel like you can’t make much of a difference with the disposable cash you do have.
Luckily, though, you can start your investment journey for a lot less–even if you only have $100 to begin.
The most important part of investing is getting started as early as possible. Rather than waiting until you have a large sum of money saved up, you can get started today and begin growing your savings. Before you know it, you’ll be well on your way to building a healthy portfolio that earns you interest and sets you up for financial success for as little as $100.
Let’s look at a few fun (and low-cost) ways that anyone can start building an investment portfolio today.
Overview: Where and How to Invest $100
Investment Type
Best For
High-yield savings accounts
Emergency funds and money that needs to be accessible
Certificates of deposit (CDs)
Those who don’t need to touch their funds right away
Company retirement accounts
Easy contributions, company matching, and investment diversification
Investment apps
On-the-go recommendations that are easy to access and often free
Robo-advisors
A hands-off approach with a diversified portfolio
Peer-to-peer lending
High risks but also high rewards
1. Start with High-Interest Savings Accounts
The easiest and most flexible way to begin your investment adventure is actually to start saving your money in a high-yield savings account. While your returns will be more limited than they would be on the stock market, it will also be a safer investment–and you can withdraw your funds at any time without penalty.
If you don’t already have a sufficient emergency savings account established (ideally, six months’ worth of expenses), this is a must. Even if you do have some money saved away, a savings account can be a great way to keep a smaller amount of funds safe and secure, yet accessible.
The savings accounts of today won’t earn you as much as they would have ten or twenty years ago. However, there are some online banks offering as much as 1.80% on high-yield savings accounts right now, and the interest rate climbs all the time. This makes them a great introduction to the world of interest-bearing funds.
Some of our favorite banks for high-yield savings accounts include CIT Bank, Ally Bank, and Capital One 360. All three are online banks, charge no fees for savings accounts, and offer some of the highest interest rates on the market today.
Want to see even more of the best interest rates and the banks offering them? Check out our list here.
2. Earn With A CD
If you want your money to grow a bit more than it would with a high-yield savings account but still need the funds to be secure against market drops, then you can look into a certificate of deposit, or CD. These savings vehicles offer a guaranteed rate of return on your investment in exchange for locking your money away for a specified period of time.
As long as you leave the funds alone until the end of the CD term, you will receive your full investment amount plus the agreed-upon interest. It’s a safe, easy way to earn extra cash on your savings!
CDs come in a number of different flavors. For instance, there are CDs ranging in term from as little as three months to as many as five or six years. The longer the term, the higher interest rate you’ll be offered. Plus, many of them have low minimum deposit requirements, meaning that you can get started even if you only have $100 to tuck away.
As long as you know for certain that you won’t need to withdraw your funds early (which usually involves a painful early-withdrawal penalty), putting cash into a CD is a safe and easy way to invest.
3. Invest in Your Retirement Through Work
Interested in tax-advantaged retirement funds that will help you invest in your future? Then look into starting (and fully funding) an IRA in addition to your 401(k), through your employer.
If your employer offers to match contributions toward your 401(k), you should always take advantage of this. Even if you only contribute enough to collect the full employer match, that’s fine; failing to do so is essentially leaving free money on the table, though. Plus, your 401(k) contributions are tax-deductible and will grow over time, providing you with a healthy retirement nest egg for your future.
IRAs are also excellent long-term investment vehicles, primarily for the tax benefits. If you open a traditional IRA, your contributions will be tax-deductible up to the annual maximum. If you qualify for a Roth IRA, your contributions won’t be tax-deductible now, but your withdrawals will be when the time comes to utilize those funds.
Saving for retirement is the second-most-important priority (behind establishing a healthy emergency savings account). Before worrying about building a stock market investment portfolio, be sure that you are setting your older self up for success.
4. Utilize an Investment App
Ready to dabble in the stock market, but don’t quite know where to start? Or maybe you don’t think that you have enough investable funds to warrant a stock brokerage? Well, then an investment app might be the perfect introduction for you and your money.
There are a number of intro-to-investing apps on the market today, but one of our favorites is called Stash. After answering a few questions to determine your investment style (do you want to be super conservative with your money or risk more in order to potentially make more?), Stash will curate the perfect recommendations for you.
To start using Stash, you only need $5, making it one of the most flexible and affordable investment options around. Plus, if your account balance is below $5,000, your monthly service fee for using the app is a single dollar.
Yep, for only $3, you can get curated investment options as well as a wealth of advice and resources. This makes Stash truly ideal for beginner investors who don’t really know where to start or aren’t ready for a financial advisor just yet.
Sign up for Stash and get a $5 bonus after funding your account with $5.
To read our complete review of Stash and learn more about the app, see our write-up here.
Alternatively, Acorns uses your spare change to make thoughtful investments across a diverse portfolio. It starts the process by siphoning off the change from your spending. If you buy a drink for $4.75, the app pays the vendor the correct amount and puts the remaining $0.25 in an account ready for investing.
The app is essentially a robo-advisor that automatically invests money you wouldn’t otherwise miss. Your portfolio can easily be spread across thousands of individual securities using just a small amount of funds. Read more in our Acorns Review.
Related: The Best Investment Apps
Another app we love is Public. Public is unique because it makes the stock market social. You can follow your friends and other investors and have conversations about companies and trends to build your financial literacy over time. There are even a few famous faces on the app, like Girlboss founder Sophia Amoruso, Adobe Chief Product Officer Scott Belsky, and NBA legend, Shaq.
In addition to the social piece, Public offers fractional shares for thousands of public companies and even popular ETFs from Fidelity and BlackRock. This makes it possible to build a portfolio with just $100, because you can invest with dollar amounts (e.g. $1 worth of Amazon stock, if you like).
Public also has a fun Themes tab where you can discover and learn about companies based on your values and interests. The Growing Diversity theme spotlights companies with high marks for diversity and inclusion. Infinity and Beyond curates companies involved in space travel. Made in the USA spotlights companies who support job creation domestically.
You won’t pay any commissions for standard stock and ETF trades with Public. It’s also one of the first free trading apps to announce that it will no longer participate in payment for order flow (PFOF). This decision removes any conflict of interest from its business model. Public also added an optional Tipping feature on trades and hopes that community support will help to offset the revenue it will lose by forgoing the PFOF model.
Read our review of Public
Related: How to Invest in the Stock Market: A Guide
If you’re looking to diversify your portfolio, you could try Masterworks. Masterworks enables you to buy shares in blue-chip artwork pieces by household names like Van Gogh and Andy Warhol. While the value of art is inherently subjective and therefore a high-risk investment blue-chip works like these have historically outperformed the stock market by a significant margin.
Masterworks looks to buy a new work every 1-2 months, and pieces typically sell after 5-10 years, making it a long-term play. Works can only be sold when all owners agree to do so with no owner permitted a greater than 20 percent share, so as not to give them undue influence. As such, it is an illiquid asset, but long-term value investing is no bad strategy.
Aside from shared ownership of blue-chip art, Masterworks big innovation is using blockchain to both reliably value the art, and maintain accurate ownership records of all pieces. Plus, they’re planning to open a free-to-access gallery where you can visit your investment.
Read our full review of Masterworks or visit Masterworks.
SEE IMPORTANT INFORMATION HERE.
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5. Robo-Advisors Might Be the Answer
There is a growing number of robo-advisors on the market today, most of which offer you automated investment options for an affordable price tag. This makes them a great option for beginners or hands-off investors who want their money to grow without constant oversight.
Companies like Betterment offer easy-to-use platforms that make investing as simple as using a savings account. Simply add the money you want to invest (as much or as little as you can afford each month) to your account and watch Betterment work its magic by investing your funds in ETFs (exchange traded funds).
Robo-advisors will help you rebalance your portfolio over time, can reinvest your dividends, and will even help you with tax-loss harvesting. The fees are a bit higher than you would find if you invested your funds directly with a company, but the added expense may be well worth it to you for the convenience of a hands-off approach.
You can also opt for a robo-advisor such as Ally Invest or M1. Ally’s trading platform is free for stocks and ETF’s, and charges less than $10 per trade for mutual funds. With M1, there are no fees to worry about as long as you meet low investment minimums on the platform.
6. Check Out Peer-to-Peer Lending
Looking for a quick return on your funds, whether you’re investing $25 or $2,500? Then look into peer-to-peer lending.
Platforms like Lending Club and Prosper allow approved investors to put up funds in denominations as low as $25. You’ll be able to choose the peer loans that you’re most interested in, lending money directly to borrowers and enjoying return rates ranging from 5% to as high as 33% in some cases.
Peer-to-peer (P2P) lending comes with additional risks, but with great risk comes great rewards namely in the form of interest rates higher than you’re guaranteed to find elsewhere.
FAQs
Curious how you can grow your investments if you’re starting out with only $100? Here are a few common questions from others who are just as curious.
How much interest will I earn on $100?
It’s impossible to say how much interest you can earn from $100 because there are a few key variables in play. First, it’ll depend on where you put that money — are you investing it in the stock market or letting it sit in a savings account? Then, it’ll depend on the timeframe — are you interested in how much that money will grow in a year or where it’ll stand come retirement? Just for perspective, though: if you had bought $100 worth of Amazon shares in 1997, you’d have enjoyed more than a $120,000 growth in value by 2018. On the other hand, if you put that $100 in a high-yield savings account today, you could earn a few extra bucks by year’s end.
How should I invest $100 to make $10k?
Again, where are you investing and how much risk are you willing to take on? The riskier the investment, the faster and more aggressive the growth. Short of perfectly timing a surprise stock or buying a winning lottery ticket, turning $100 into $10,000 will take some time. If you’re determined to grow a $100 investment to $10,000, though, you may want to consider high-risk stocks or something like peer-to-peer lending.
How can I invest $100 wisely?
The wisest investment is the one you can best live with. If you don’t really have $100 to spare in the first place, investing it in a mutual fund probably isn’t wise. If you can’t afford to lose that money, using a p2p platform to offer loans with it also isn’t wise. If you can comfortably take on that risk, though, go for it. Otherwise, wise investments include savings accounts and CDs, and you’ll want to be sure to calculate how long you realistically want to invest those funds.
What’s the best way to invest $100 short term?
If you need your money available sooner rather than later, you’ll be trading off growth for convenience. With that said, short-term investments may be the best choice for those who just want to earn a little extra money and then have their funds available when they need them. This means putting it away in a CD with a smaller time frame or letting it grow in a savings account.
Bottom Line
Investing doesn’t only mean spending tens of thousands of dollars on stocks and building a Wall Street portfolio. It simply means making your money work for you, and you can get started for as little as a few bucks.
There are plenty of options to begin building your first portfolio, letting your money earn interest and grow over time. Whether you choose a high-yield savings account or go the high-risk/high-return route of the stock market, the important thing is to start early.
Also read: What to Do with Your Money When Interest Rates Are Low
Be sure to also watch your progress over time, too, and revisit whether you are making efforts in the right places. No, you don’t need to watch your investments daily or obsess over normal market fluctuations. However, using a platform like Empower to track not only your investments and savings accounts but overall net worth can be invaluable along the way.
If you’re a home buyer in today’s market, there’s a bit of good news: an influx of new construction. In response to the low levels of existing home inventory, residential builders are working to meet demand. In June 2023, new home sales in the U. S. made up 14.35 percent of total home sales, according to the National Association of Home Builders (NAHB) — an increase of 4.46 percent year-over-year.
On top of building the home, a residential developer often can help you buy it, too. Called home builder financing or preferred lending, getting a mortgage this way can mean a speedier closing, discounts and special perks for borrowers. However, it can also result in higher interest rates, more stringent qualifications and potentially more expensive loans overall.
So is it a good idea to finance your home purchase through a construction company? Here’s how borrowing from a builder works, and what you should know before filling out any applications.
What is home builder financing?
Home builder financing simply means a mortgage for a newly built home that’s offered through the construction company or developer. Some of the largest firms have their own standalone home-financing arm: National builder Toll Brothers, for example, provides loans through its subsidiary, Toll Brothers Mortgage Company. Other builders have ongoing partnerships/arrangements with independent mortgage companies or banks, known as their “preferred lenders.”
This can be a mutually beneficial relationship. However, to ensure there are no conflicts of interest, lenders must closely follow the terms of the Real Estate Settlement Procedures Act (RESPA), which dictates that they cannot legally receive kickbacks, referral fees or other unearned fees from the builder — or bestow them, either.
Home builder financing requirements
If you’re buying a production or a spec house — a move-in ready home built in a development before there’s a buyer — qualifying for a loan with a preferred lender is similar to getting a mortgage from any lender. You’ll likely be able to choose between a variety of financing products such as a conventional loan or FHA loan. These kinds of mortgages typically require a minimum down payment of 3 to 5 percent and a credit score of at least 620 (for conventional) or 580 (FHA). Some lenders even offer jumbo or other non-conforming loans.
If you aim to have a home custom-built, financing can be more complicated. You’ll need to get a construction loan (either independently or through a preferred lender), which can have stricter requirements, as well as higher fees. You’ll generally need a 20 percent down payment and a credit score of 680 for this sort of financing, though the terms can vary by lender.
Home builder financing deals
To encourage borrowers to use their financing, home builders often offer deals. In fact, nowadays “we are seeing incentives of some sort in most new construction developments,” says Patty Zuzek, real estate broker at Fieldstone Real Estate Specialists and vice president of sales and marketing for Fieldstone Family Homes in Minnesota.Through these deals, home buyers may be able to increase their buying power by financing through the home builder.
Home Equity
Bankrate insights
In August 2023, 55% of builders provided incentives to bolster sales, up from 43% in 2022, according to the National Association of Home Builders (NAHB). A quarter of builders (25%) reduced their home prices, by 6% on average.
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Financing incentives
Special offers may include upgrades for the home (like better appliances) or downgrades of the home price, a credit towards closing costs or a discount on the mortgage rate. The particular incentives the builder (or their preferred lender) offers are dependent on the type of construction and financing, according to Zuzek. For instance, a borrower going with a preferred lender’s FHA loan to buy a new home in an existing development will be offered different incentives than someone financing a custom-build on their own lot.
Mortgage rate buydowns
Home builder incentives are also highly market-driven, Zuzek says. For example, home builders are responding to current high interest rates by offering a mortgage rate buydown on new construction if you go with their preferred lender. Mortgage rate buydowns — also known as temporary buydowns — are discounts on loan interest rates. They involve the builder, lender and/or buyer paying upfront to knock percentage points off the interest rate for the first one to three years.
Mortgage 30 Year
Bankrate insights
One common type of temporary buydown is the 2/1 buydown, which lowers the borrower’s rate by 2 percent for the first year, then by 1 percent for the second year. For example, say you take out a 30-year mortgage with a rate of 7.25 percent and have a 2/1 buydown. The first year, your rate will be 5.25 percent, the second year it will be 6.25 percent and the third year it will be 7.25 percent, where it will remain for the rest of the loan.
To get a buydown, “depending on which builder you work with, you’ll need to work with their preferred lender and their preferred title company,” says Zuzek. That’s because the lender pays for some portion of the buydown. Aspects like the borrower’s credit score and what type of mortgage they’re using will affect whether they’re offered a temporary buydown, she adds.
A temporary buydown can be a good option, but you need to be aware of the risk when the rate resets. “In general, buydown loans tend to end up at a much higher rate than what you’re going to get for a straight fixed ,” says Jeff Lazerson, President of Mortgage Grader, a mortgage brokerage in Laguna Niguel, California.
Still, they can be a shrewd move when mortgage rates are rising. “Right now the timing might not be too bad, as long as it’s a lender or builder-paid buydown,” Lazerson says. If mortgage rates fall in the next year or two, the buyer could refinance to a better rate after the buydown ends, he adds.
The pros of borrowing from a builder
1. Good interest rates
A big reason a borrower should consider borrowing home builder financing: cheaper loans. Pulte, for instance, is one of the nation’s largest home builders with their own mortgage company — Pulte Mortgage. As of this writing, Pulte is offering a 30-year fixed rate mortgage with an interest rate of 5.5 percent and an annual percentage rate (APR) of 5.69 percent. That interest rate is 1.62 percent below the current national average.
2. Home upgrades
One benefit of working with a preferred lender is you may be able to more easily upgrade the home. “The builders will allow you to finance improvements into the loan,” says Lazerson. The best reason to go with builder financing is when you want a significant amount of extras or customized features — such as top-of-the-line kitchen appliances or specialty flooring — but don’t have the money, according to Lazerson.
Because builders can pay for materials and labor at a reduced rate, the upgrade could be negotiable if you go with their preferred lender. You could get a better deal on a mortgage with an independent lender, but you’ll have to pay out of pocket for your own upgrades or take out a home renovation loan.
3. Streamlined mortgage process
Since builders work closely with a specific lender (or they’re owned by the same parent company), they can have more confidence that the loan will close if the borrower is approved. Builders don’t want to have a sale fall through at the last minute due to a hiccup in underwriting.
Every extra day they keep a finished home on their books is costing them, not only in taxes and maintenance, but in opportunity cost as well. With a preferred lender, the lender and the builder have strong reasons for the process to go smoothly. The builder benefits from selling the house and the lender benefits from the continued referral business. And of course, you the buyer could benefit from a faster and easier closing. It’s not guaranteed that you’ll get approved, of course, but your relationship with the builder certainly won’t hurt.
The cons of borrowing from a builder
1. Higher fees and costs
Going with a builder’s preferred lender can cost you more than going with an independent lender. “When you’re having to split your profits three ways — between the mortgage company, the builder and the loan officer — you just mark up the loan more because everyone’s got to get paid,” Lazerson says. That means a higher interest rate (after a buydown ends) and more fees.
Also note: for using their preferred lender, builders may throw upgrades like nicer flooring in for free. But, what they don’t tell you is that they inflate the value of these perks, according to Lazerson. “I don’t remember one time that a builder deal was cheaper than what the consumer could get through the mortgage broker,” he adds.
2. Stricter qualifications
To take advantage of some financing deals, you may have to meet stricter guidelines. For example, Pulte’s advertised APR of 5.69 (mentioned above) isn’t for everyone. The minimum credit score is 780 and you have to put at least 20 percent down. This rate is based on purchasing a $500,000 home. That means a minimum $100,000 down payment. The national median down payment for Q1 of 2023 was $24,100, according to Realtor.com. So, to qualify for this specific reduced APR, you’ll need to make a down payment that’s four times the national median down payment.
3. Limited choices
If you want to get discounts or other benefits from financing through a builder, you may be limited in the house you can buy. Obviously, it’s got to be one of the developer’s — and not all builders and lenders work in every area. Also, with some builders and preferred lenders, the discounts their offering may only apply to already-built homes in specific communities. If you want a different house or a different location, the discount may not work for you.
Should you use home builder financing?
It’s important to know that builders can’t require you to use their preferred lender. It’s just another option for buyers. “Asking the correct questions to the lender and the builder is really important,” says Zuzek. You want to know what to expect in terms of timeline, discounts and fees. And read the fine print on any and all incentives.
And, while going the preferred-lender route is certainly convenient — like getting an auto loan at the car dealership — studies show that shopping around saves money for mortgage-hunters. You should compare new construction mortgage rates from three different lenders, at least.
That way you’ll be able to make an educated decision as to whether the builder’s loan offer, with all its enticing incentives, is the best way to finance your new home.
The co-owners of a Yakima-based online business offering home décor, gifts and other hosting and kitchen items have opened a brick-and-mortar location in Glenwood Square.
Lexi Borton and Morgan Robinson began their online Table Envy “tablescape” rental business in 2020, just as the COVID pandemic shifted many gatherings from public places to private homes. It provided the items and décor necessary to host parties and other events.
That business led to Tavolo Shoppe, which offers many of the Table Envy rental items for sale. Those include charcuterie boards, dough boards, glassware, linens and pantry items.
Borton said other popular items at Tavolo, the Italian word for “table,” include candles, ceramics, spices and pillows.
After establishing Tavolo online in October, a physical location in Glenwood Square became available. The shopping center at 5110 W. Tieton Drive in Yakima is housed in a refurbished fruit warehouse and includes several restaurants, stores and services such as beauty salons.
“We love this space. We feel like it really fits our style,” Borton said of the Glenwood Square building. “Being in a place with a lot of restaurants and retail businesses has been fun. It allows us to meet a lot more people.”
Tavolo opened its Glenwood Square location in mid-June and is located on the first floor in Suite 220, immediately inside Entrance 1 on the west side of the building. It is open noon to 6 p.m. Tuesdays through Fridays and 10 a.m. to 4 p.m. Saturdays. Call 509-206-8766 or visit tavoloshoppe.com for more information.
Drift Home Collection began as an online venture in 2017, specializing in handmade Moroccan rugs and other home decor items; now it’s opening a brick-and-mortar location in New Braunfels slated for September.
The shop will be located at 173 E. San Antonio St. and called Drift Home & Interiors.
Owner and curator Nataliya Borener, who is an interior designer by trade, wanted to combine her home collection shop with her namesake business Nataliya Borener’s Interiors.
Borener got the idea after traveling to Morocco in 2016.
Drift Home & Interiors will have a variety of handmade, high-quality home decor items including lighting, rugs, blankets, pillows, ceramics. The shop will also have a small assortment of handmade jewelry, ceramics and more.
“Each thing in my shop is special because it’s going to be something that was made by human hands and has a story,” Borener said.
The shop will also offer full-service interior design services.
Borener emphasized that great design is “purposeful, intentional and meaningful.”
“Your home should be a reflection of things you truly love and connect with,” Borener said.
Dining version | Travel version | Dining & Travel version (bear in mind these offers are targeted – For anyone that wants to check, when you go to your Apple Card in the Wallet app, hit the top right button with the three dots, and then Daily Cash)
Apple card sent out various spending offers for Dining and some people got for Travel as well:
Through September 20th, get 5% total Daily Cash Back every time you use Apple Card on dining purchases, on up to $6,000 in total spend depending on your Apple Card payment type. See offer terms for full details and exclusions.
Through September 20th, get 5% total Daily Cash back, on up to $20,000 in total travel spend and up to $6,000 in total dining spend depending on your Apple Card payment method. See offer terms for full details and exclusions.
Earn 5% back on up to $2,000 in total qualifying dining purchases at Panera and Uber Eats when using Apple Pay.
Earn 5% back on up to $2,000 in total qualifying dining purchases when using Apple Pay.
or Earn 5% back on up to $12,000 in total qualifying dining purchases when using Apple Pay.
Earn 5% back on up to $2,000 in total qualifying dining purchases with virtual online number or titanium card.
or Earn 5% back on up to $12,000 in total qualifying dining purchases with virtual online number or titanium card.
The Fine Print
Offer is limited to the select Apple Card account holder who directly received this offer. No need to enroll.
Valid from August 21, 2023, to September 20, 2023.
Earn a total of 5% Daily Cash back on up to $6,000 in total qualifying dining purchases made with your Apple Card depending on your payment method.
Qualifying dining purchases include those made with Apple Card at restaurants, cocktail lounges, discotheques, nightclubs, taverns, bars, eligible delivery services, and fast food restaurants.
The total Daily Cash back that can be earned with this offer is $300, depending on your payment method.
Dining purchases at Bonus Daily Cash Merchants with Apple Pay: you will earn 5% back on up to $2,000 in total qualifying dining purchases at Panera and Uber Eats when using Apple Pay. 5% Daily Cash is not available at Panera locations outside the U.S. and excludes orders made on third-party apps, plastic gift card purchases made online, and gift cards purchased through the Bulk Gift Card program. The maximum Daily Cash you can earn in this category is $100. The 5% Daily Cash earn rate includes the 3% standard earn rate for purchases made using Apple Pay plus and an additional 2% bonus earn;
Dining purchases at non-Bonus Daily Cash Merchants with Apple Pay: you will earn 5% back on up to $2,000 in total qualifying dining purchases when using Apple Pay. The maximum Daily Cash you can earn in this category is $100. The 5% Daily Cash earn rate includes the 2% standard earn rate for purchases made using Apple Pay plus an additional 3% bonus earn;
Dining purchases made with virtual online number or titanium card: you will earn 5% back on up to $2,000 in total qualifying dining purchases with virtual online number or titanium card. The maximum Daily Cash you can earn in this category is $100. The 5% Daily Cash earn rate includes the 1% standard earn rate for purchases made using virtual online number or titanium card plus an additional 4% bonus earn.
Qualifying purchases can only be made by the Apple Card account holder who directly received this offer. This means any purchases made by Apple Card Family members will not be included towards the Apple Card account holder’s qualifying spend.
Merchants are assigned a merchant category code (MCC) by the credit card network based on its primary line of business. Web mapping platforms such as Apple Maps and similar services, may label or refer to a merchant as a restaurant or dining related establishment however, for the purposes of this promotion, qualifying dining purchases are determined based on the MCC reported by the merchant. Purchases made with merchants that provide dining related goods or services such as restaurants or bars located within another establishment (e.g., inside a hotel, casino, amusement parks, airport, or event venue), at cafeterias, catering, vending machines, convenience stores, food courts, and food trucks may not qualify for this offer if a merchant does not submit transactions using the anticipated MCC associated with qualifying dining categories.
Our Verdict
These are nice earn rates, just beware of the $2,000/$12,000 limits. The Dining version seems to have been more widely sent out than the Dining + Travel version.
Treasury Secretary Henry Paulson today outlined a possible future role for mortgage financiers Fannie Mae and Freddie Mac during a speech before the Economic Club of Washington.
While suggesting four options, including privatization, nationalization, and a partial guarantee program, a housing utility option seemed to be preferred.
Under this model, a “public utility-like mortgage credit guarantor” would be established to resolve the ongoing conflict between public purpose and private gain that eventually led to the downfall of Fannie and Freddie.
Congress would replace the pair with one or two private sector entities that would purchase and securitize mortgages with a credit guarantee backed by the federal government.
The entities would be privately owned, but regulated by a rate setting commission that would establish both a targeted rate of return and mortgage program and underwriting “innovations.”
The entity(s) would not have investment portfolios as Fannie and Freddie do.
As the mortgage crisis worsened, the GSE-share of new mortgage business increased to a staggering 84 percent in the second quarter of 2008 from 46 percent a year earlier.
Shortly after, the pair saw their share prices drop to nearly nothing as they were taken into conservatorship by the Treasury and the FHFA.
Paulson noted that nearly all new mortgage market originations have federal government support, a trend that is not sustainable over the long-term.
“It will lead to inefficiency, less innovation and higher costs,” he said. “It also contradicts basic U.S. market principles.”
“We must have some degree of private sector involvement in the evaluation of credit risk if we are going to have a mortgage market that allocates resources with efficiency.”
To support depository institutions’ ability to fund mortgages, a “long-term fee-like structure” may be put in place in exchange for explicit government backing.
“Over time, another approach might be to offer other financial institutions the opportunity to pay a fee for government backing on securitized, conforming loans, a structural transformation that would lower entry barriers, and increase competition and innovation in housing finance,” he added.
“Covered bonds are another private sector alternative worth exploring.”