Welcome to Worth Your Time Weekly – March 29, 2018
Each Thursday, I do a quick post with 3-5 links I came across (or were emailed to me by you!) that I think are worth your time. Here are the links for this week (and don’t forget my first WYTW last week)!
1. Do you have your money at Wealthfront? They are changing your investment plan and you might not realize it.
“Instead of putting investors solely into a low-cost indexing strategy, Wealthfront has now decided to invest 20% of its investors’ funds into an internal “risk parity” fund, which in turn is invested mostly in complex derivatives known as total return swaps. The fees associated with the old strategy averaged out at 0.09%; the new strategy, by contrast, carries a fixed fee of 0.50%, all of which goes directly to Wealthfront”
Many robo-advisors are backed by Venture Capital firms that like their companies to continually create more revenue, faster and faster. If you bank at a robo-firm (Betterment, Ellevest, and lots of others) – make sure you keep an eye on what they are doing. This change by Wealthfront was “opt-out” meaning they’d change you to a higher cost investment strategy without you agreeing to it.
2. Who is the person best able to steer you toward irrationality? It might be the person in the mirror
Interesting article on how we can consistently steer ourselves toward things we would likely caution others against. This has big implications for retirement investing (since overconfidence can move us away from passively-managed index funds), but also is something we should all consider in our working and personal lives.
3. How BigLaw protects himself when renting a car
I always feel like I’m getting taken by the rental car employees as they sell me on the various “coverages” I should buy (especially when I know I’m covered for most issues through my own auto insurance and credit card). BigLaw walks through his process and I feel more prepared for my next round at the rental car desk..
4. Are you considering (hoping for) Public Service Loan Forgiveness?
This article does one of the better jobs of describing the process that I’ve come across. It also goes into what I think might be the biggest hurdle – loan servicers that aren’t setup to do the required PSLF documentation and their lack of incentive to get it right.