betterment-investment

Investing with Betterment has been surprisingly a piece of cake. If you have been following me since January, you know that I have been working on a $1,000 investment challenge called the Grow Your Dough Challenge with Wealth Hacker Jeff Rose. The goal is to make as much money as you can with a $1,000 investment and not contribute a penny more. I have been using a robo-advisor called Betterment to earn passive income.

 

I’m back on the uptick!

If you remember from my investing with Betterment May update, you will recall that I dropped to an 8.1% cumulative return as of June 1, 2019. I decided to not change anything in my investment strategy and ride it out.

Well, it turns out that doing nothing actually does something. I was able to increase my cumulative return to a whopping 15.5%!

investing with betterment

It’s been a roller coaster, but it continues to go up!

Return Chart Comparison

I have been investing with Betterment for six months now, and I’m still discovering new features. I just discovered this really handy comparison chart to show you how your investment would have performed if you had a different allocation.

For example, if I change my current investment strategy (90% stocks / 10% bonds) to a more conservative strategy (90% bonds / 10% stocks) I can see what my return would have been like.

comparison betterment

This chart is really handy, because I can easily see the difference in allocation strategies. Had I decided to go a more conservative approach (bonds are more conservative than stocks!), I would have only earned 3.5% on my investment.

Granted, I have had a more wild ride by aggressively investing in stocks, but ain’t no gain without the pain. Side note, I’m also 30 years old at the time of this post, and I have a long ways to go (fingers crossed) with investing. I would rather rapidly accumulate wealth now, knowing I can take a few punches, than risk out on earning money.

How my $1,000 investment has grown since January 2019
Month Amount
January $1,080.72
February $1,103.74
March $1,110.77
April $1,146.89
May $1,100.22
June $1,154.97

Disclosure: Links contain affiliates. When you buy through one of my links, I will receive a commission. This is at no cost to you and helps support my channel!

How much have I earned investing with Betterment?

So far, I have earned $154.97 investing with Betterment over the past six months. That translates to roughly $25.82 per month.

I know that doesn’t seem like a lot, but I have literally done nothing to my investment aside from checking it every month.

I have continued to live my life: travel cheaply, write numerous personal finance articles and video scripts as a freelancer, enjoy a tequila on the rocks with my hubby, and even take time to color my hair (Ha. THAT certainly takes more time than my investments do!).

What funds can you invest in with Betterment?

I really enjoy that I can still invest with Vanguard while investing with Betterment. Vanguard has the lowest expense ratio and provides its investors with low cost index funds.

Index funds buy and hold all stocks in a given index.

I am invested in VTI in my Betterment account. VTI is the entry point index fund which means, there are no minimums to purchase a share (or partial share in this case).

Will you continue to invest with Betterment after the challenge?

By now you should know I am a very hands off investor. I like to set it up once and let it ride. My husband, on the other hand, likes to tinker with his investments. He likes to watch the stock market and sell high on apps like Robinhood.

But I have drank the Vanguard Kool-Aid and damn, does it taste good. I really need to do a separate blog post on this.

By letting Betterment handle the rebalancing of my portfolio, I can feel confident that things will go fairly smoothly. So, yes. I think I will continue to invest with Betterment after the challenge. I might even set up an automatic contribution and see where this thing really takes me!

If I contribute $100 per month investing in Betterment, I can really skyrocket this thing.

You know, I was turned on to Betterment from bigger FIRE tycoons like Mr. Money Mustache and Jeff Rose with Good Financial Cents. I really appreciate those who have done the experiments before me so that I could jump in with some educated practicality.

How has the Grow Your Dough Challenge helped you financially?

Right now my Betterment investment portfolio is set up in General Investing. I don’t have this in an IRA and I can withdraw the money whenever I need to. I think it has helped me learn how I want to contribute to my retirement using different platforms.

Kyle and I just had a discussion about how we need to maximize his TSP before we go crazy on our IRAs or general investment accounts. I have been reading JL Collins’ Simple Path to Wealth and that’s helped me focus on what I need to do next. I need to temporarily stop feeding my IRAs and instead use that money to max out Kyle’s TSP.

How do you currently invest?

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