Betterment: An Ideal Platform for the First-Time Investor

Bob HaegeleBy: Bob Haegele

August 25, 2016August 25, 2016

Betterment: An Ideal Platform for the First-Time Investor

The online world has has made it easier for people to invest, and they don’t need a lot to get started. The market is more accessible for first-time investors thanks to online platforms like Betterment that offer an easy way to start building their net worth. But it’s not without its risks. So, it’s important to analyze each financial investment carefully before you decide to pull the proverbial trigger.


There are many different opinions about which investment strategies work better than others, but there is one that everyone is in agreement on. And that is the importance of diversification.

To put it simply, diversification is the investor’s way of saying that you shouldn’t “put all your eggs in one basket.” In other words, you should spread your investment dollars into more than one type of assets and stocks, and you should put them into a variety of industries. Using this strategy will minimize your overall risk in the market.

Click for Betterment Pricing and Details.

What to Invest

As a rule, you shouldn’t invest more than 10% of your money in the stock market because there is always a chance that you will lose it. Keeping this margin will prevent you from blowing through your entire savings.

You can consider putting part of what’s left over into the following assets:

  • Low-cost mutual funds
  • ETFs

These types of investments are good for first-time investors, and they can be kept over the long term. But you want to make sure you keep your management costs low because you want to get the best possible return.

Compare to competitorsM1 Finance vs. Betterment

Finding the Right Online Broker

There are many different platforms for online trading, which can make it difficult to find the right one. However not all online brokers are created equal. So, it’s important to learn more about a company to find out if it will fit your investment needs.

Betterment has a simple system that is perfect for the first-time investor, and they have a user-friendly interface that is easy to use. But in spite of its simplicity, there is no guarantee that you will win. In fact, you should be constantly mindful of the risks involved in investing, and you should make sure you have a solid strategy that will keep you successful over the long term.

Types of Assets

Betterment offers a variety of assets, and they even offer a way to start saving for retirement. They even have rollover options available if you want to move money from an existing IRA.

Here is a list of the assets offered by Betterment:

All of these are great long-term investments that can help you earn income and build savings quickly.

Portfolio Management

In addition to a variety of long-term assets, Betterment has other features that make it easier to manage your portfolio. These include:

  • Automatic Asset Allocation: This will help to maximize the performance of your assets, especially mutual funds and ETFs.
  • Automatic Tax Loss Harvesting: This helps to minimize your taxable returns by offsetting it with any losses you’ve incurred.
  • Automatic Portfolio Rebalancing: This feature is designed to buy and sell ETFs to help you rebalance your assets.

The fact that many of these processes are done automatically will save you money and a tremendous amount of time. Betterment will automatically deposit any dividends you’ve earned on any of the following schedules:

  • Monthly
  • Semi-monthly
  • Bi-weekly
  • Weekly

The great thing about this feature is that you can choose how often you want to get paid. The downside, however, is that they will not automatically reinvest your dividends. So, if you want to put money back into a mutual fund or bonds, you will have to do it yourself.

Final Thoughts

It should be clear by now that Betterment doesn’t offer a lot for day traders and short-term investors, but it has a lot of great features for someone who wants to build a lasting portfolio they can keep over the long term. Plus, their management fees are lower than most of their competitors, which makes it a great platform for first-time investors.

And Betterment doesn’t overlook the importance of retirement planning, as they can help you find a good IRA that can help you save for when you’re older. So, if you’re thinking about getting into the market, but aren’t sure where to begin, you should give this company a serious look and think about creating an account now.

Click for Betterment Pricing and Details.

Betterment Comparisons:

Related Links

Bob Haegele
Bob Haegele

About the Author:

Bob Haegele is a personal finance writer, entrepreneur, and dog walker. He's a money management expert and investing connoisseur. Bob has been writing about personal finance for three years and now manages several personal finance sites, including The Frugal Fellow and Modest Money. You can also find him contributing to popular websites such as GOBankingRates, Bankrate, and You can see more of his work on Muck Rack and Contently, or connect with him on LinkedIn.

Leave a Comment

Your email address will not be published. Required fields are marked *