Attention!
For those interested in long-term investments, I now wholeheartedly recommend Bitcoin as the primary option to consider.
However, it’s essential to educate yourself about this digital asset before diving in, as it can take time to fully grasp its intricacies and potential.
A fantastic starting point is the book “The Bitcoin Standard” (Amazon), which provides an in-depth look at the history, principles, and technology behind Bitcoin.
Once you’re ready to invest, most major exchanges offer similar fees and services, so choose one that best suits your needs. Personally, I use Crypto.com.
It’s crucial to transfer your Bitcoin to a secure wallet once you’ve made your purchase, as leaving it on an exchange can pose risks.
To truly make the most of your investment in Bitcoin, take the time to study and understand its workings. Your financial journey will benefit from a well-informed approach.
I wish you the best in your endeavors.
Sincerely
Michael J. Peterson
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Betterment vs Ellevest – it’s a common debate amongst investors.
In this article I’ll compare both, share the pros and cons, and who would be best suited for each.
About Betterment
Betterment is the largest independent robo-advisor and is also one of the first to arrive in the market.
Betterment offers two services – Betterment Digital which has no minimum investment requirement and Betterment Premium, which has a higher minimum balance requirement of $100,000 and higher fees, but offers more, including access to a human advisor.
About Ellevest
Ellevest is a robo-advisor geared toward women. It was founded by women, it’s run by women, and it focuses on women, but anyone can invest there, even men. They charge monthly fees rather than a percentage of assets under management and have three tiers to choose from.
Ellevest uses the goal-focused approach and they don’t require a minimum balance. Ellevest doesn’t offer access to a human advisor even in their highest tier program, but you can purchase human advisor services a la carte.
What do they have in common?
- Both have a program that doesn’t require a minimum balance.
- You can open a taxable or retirement account at either robo-advisor (but no joint accounts at Ellevest)
- Both platforms work on a goals-based investment philosophy
- Both companies invest in ETFs
- Betterment and Ellevest both automatically rebalance your portfolio
- Both platforms have a viable mobile app
- Both brokerages operate as a fiduciary
How are they different?
Betterment looks at your finances from a holistic point of view. They look at your entire financial profile and zero in on specific goals, such as buying a house or having a baby. Betterment offers personalized plans to help you achieve your goals, and they offer plenty of education along the way.
Ellevest focuses on women investors. It has a unique focus on women’s issues including the wage gap, longer life expectancies, and time off to raise children. Ellevest doesn’t offer joint accounts, so if you planned on opening an account with your spouse, you’d have to look elsewhere.
In-depth comparison – 10 distinctions
1. Goal Setting
Both Betterment and Ellevest focus heavily on goals.
Betterment makes it easy to set and meet goals. You can monitor each goal on its own, and can add new goals as often as you want. You can easily track your progress on their dashboard. They alert you right away if you are off-base and offers solutions (larger deposits) to rectify the issue. Betterment is great for young investors just starting out that may need those reminders to invest more money and more frequently. Betterment does take into account your other financial accounts to fully plan your goals.
Ellevest is also goal-focused, however, the number of goals you can set depend on your chosen plan. The basic plan at $1 a month allows one goal and its top plan allows up to six goals. You can set up goals for just about anything including saving for a house, retirement, or opening your own business. Ellevest focuses on gender-specific salary differences and life expectancies to manage your goals.
2. Retirement Planning
Betterment does a great job at retirement planning. They focus on aggressive investments during your younger years and more conservative portfolios as you age. If you link your external accounts, you’ll get a more holistic view of your retirement funds with Betterment versus Ellevest.
Ellevest focuses on long-term life expectancies and invests for retirement accordingly. If you sign up for Ellevest Plus, you’ll get advice on IRAs and 401Ks. Ellevest also offers a la carte services with retirement specialists and career specialists to further your retirement goals.
3. Account Types
Betterment and Ellevest offer the same account types you find at most robo-advisors. Like I said above, though, Ellevest doesn’t offer joint accounts. Betterment does offer a few more account options, though.
Both brokerages offer:
- Individual taxable accounts
- IRAs
- Roth IRAs
- SEP IRAs
In addition, Betterment offers support for inherited IRA accounts and trust accounts.
- Inherited IRA accounts
- Trust accounts
4. Features and Accessibility
Betterment and Ellevest both have basic accounts with no minimum balance requirement and premium accounts with higher balance requirements and more features.
Both firms offer access to human advisors, but at different costs and both offer portfolio reallocation. Betterment requires you to have $100,000 under management. You pay a higher fee, but have access to access to a team of financial advisors – you get unlimited access on this plan.
Betterment also offers many financial planning tools, all of which are free. Plenty of flexibility when creating portfolios and goals and a platform that sees you through any changes, decisions, or questions.
Ellevest’s features depend on the chosen subscription. If you pay for the higher tier for retirement planning, you get higher discounts on advice from a human advisor. The discounts range from 20 percent to 50 percent on the highest tier. Ellevest’s platform is focused on women, including their salary and investment needs.
5. Fees
Betterment uses the assets under management strategy, charging 0.25% of assets under management under $100,000 and 0.4% of assets under management over $100,000. If you have more than $2 million invested, they offer discounted rates.
Betterment Fees
Ellevest Fees
Ellevest uses a subscription-based model:
- $1 a month for one non-retirement goal
- $5 a month for a retirement goal
- $9 a month for up to 6 goals including a retirement goal
6. Minimum Deposit
Neither Betterment or Ellevest require a minimum deposit unless you want to use Betterment Premium for access to financial advisors, then you need $100,000 invested.
7. Portfolios
Both Betterment and Ellevest use the Modern Portfolio Theory which focuses on:
- Diversification
- Buy and hold
- Risk tolerance
- Goal timelines
- Aggressive vs conservative investing
Betterment has the following portfolios:
- Standard diversified portfolio of ETFs and stocks
- Socially responsible portfolio
- Goldman Sachs Beta Portfolio
- BlackRock Target Income
Ellevest has both diversified and socially responsible portfolios as well, but they emphasize their impact or socially responsible portfolios.
8. Tax Loss Harvesting
Betterment offers standard tax-loss harvesting, selling off losses to offset the capital gains, and lowering tax liabilities.
Ellevest doesn’t do tax-loss harvesting, but uses a tax minimization strategy that helps rebalance tax liabilities in a similar fashion to tax-loss harvesting.
9. Security
Both Betterment and Ellevest take security seriously using 256-bit SSL encryption. They both also carry SIPC insurance and two-factor authentication.
10. Customer Service
Betterment offers email and phone customer service 9 AM – 6 PM on weekdays. Ellevest offers email customer service but typically respond quickly during business hours.
Betterment Pros and Cons
Ellevest Pros and Cons
Which is best? My Pick
Betterment is better for goal planning and overall retirement savings. They offer a holistic view of all accounts, allow as many goals as you want, and have low fees. It’s easy for anyone to get started, even beginners.
Ellevest is mostly for women.
While anyone can invest there, the research, education, and all marketing is for women. The pricing is different and you have to pay extra for human advisor services. Ellevest uses a slightly more aggressive investment approach too, which isn’t great for beginners.
Michael is a senior writer at The Robo Investor. He earned his master’s at the Craig Newmark School of Journalism at CUNY, and is currently taking CFP courses at the University of Scranton. He has been an avid finance enthusiast ever since he started investing at the age of 23. Meet the Team