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Reddit Investors Shake Up Wall Street: Why Portfolio Diversification Is Key

Published: 02/11/2021 by Financial Samurai 7 Comments

In the never-ending desire to get rich quick, Reddit investors are the new kings and queens of day trading.

Back in college, I was a degenerate day trader who bet on stocks between classes, partially based on what I read on message forums. More than 25 years later, it is fascinating to see forum-based trading explode again, but with much more firepower.

The following is a guest post from FarmTogether, a leading farm investing platform and Financial Samurai sponsor. With FarmTogether, you can diversify your portfolio and increase your passive income in a less volatile manner.



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Robinhood Alternatives 2021: Better Online Brokerages

Published: 01/30/2021 | Updated: 02/14/2021 by Financial Samurai 49 Comments

Look for Robinhood alternatives. Robinhood is an online brokerage house that steals from the poor (retail investors) and gives to the rich (hedge funds).

When Robinhood decided to arbitrarily shut down the trading of 13 names on January 28, 2021, it caused thousands of investors to lose billions of dollars. As a result, you would be nuts to continue trading on the Robinhood platform.

Features you want from an online brokerage:

  • Reliability – You can log in without the website crashing. The online brokerage stays up during trading hours. There are few or no bugs.
  • Fairness – You should be able to buy and sell and trade whatever securities you want without artificial interference from the brokerage. In other words, the brokerage won’t randomly shut down the ability to trade certain names out of the blue or lock you out of their platform.
  • Real-Time Quotes – In order to trade effectively, you need real-time quotes, not delayed quotes. Securities move too quickly for you to be waiting on a 10 or 15 minute lag.
  • Robust Research – The best online brokerage houses will have robust proprietary research and data on various stocks and bonds. The research is important to get an idea of what the street is thinking and to help you make better investment decisions.


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NewRetirement Review: An Excellent Retirement Tool

Published: 01/22/2021 | Updated: 02/14/2021 by Financial Samurai 21 Comments

If there’s one thing I love to do, it’s plan for retirement before retirement and during retirement. The more you can plan for retirement, the more retirement success you will likely have.

In the old days, I would write everything out on a spreadsheet and update each line item every month. Fortunately, more fintech companies are taking the guesswork out of retirement planning.

One such firm that’s making headway in the space is NewRetirement. This is my NewRetirement review for all of you looking for a great retirement planning tool. Both my wife and I sat down and reviewed the product together.

NewRetirement Overview

NewRetirement was founded in 2015 by Stephen Chen and is based in the San Francisco Bay Area. The company’s objective is to enable people to help themselves with a DIY retirement planning solution.

NewRetirement raised $2.2m in 2018 from 2 key investors, Guggenheim Partners and Intercept Ventures. NewRetirement originally reached out to me in 2017 and I passed. But after a good 5+ years of development and refinement, I’m excited to share my thoughts on NewRetirement with all of you.

Chen was inspired to launch NewRetirement when he and his brother Tim witnessed their mother struggling with her own retirement planning. They quickly realized that since their college educated, entrepreneurial mother (co-owned an advertising business) was struggling with her retirement transition, surely millions of others are too.

Wanting a better DIY solution than just using spreadsheets, NewRetirement was born. Independent and built from the ground up, the company is gaining traction.

Before founding NewRetirement, Chen co-founded a VC-backed company that raised $40M and filed to go public (got sold).

Stephen Chen, Founder and CEO of NewRetirement

He also bootstrapped a profitable 7-figure consulting firm and a separate performance marketing firm. In addition, he worked as a consultant for Charles Schwab, Fidelity, Dimensional Fund Advisors, and others.

NewRetirement was voted best retirement tool by Forbes, and the American Association of Individual Investors. The company has a growing user base of 100,000+ DIYers.

The typical user demographic of NewRetirement’s retirement tool is between 50 – 65 years old, has an average of $1 million and a median of $600,000 in investable assets, and $400,000 in home equity. As NewRetirement focuses on helping everyone achieve financial independence, it will likely attract a younger audience over time.

What Does NewRetirement Do?

NewRetirement wants to bring financial planning to the mass market at a very low cost. Users like you can utilize their technology to gain confidence, achieve financial independence, and maximize your money. This in turn can help you save time and stress.

Some of the resources and services offered by NewRetirement include:

  • Customizable Online Retirement Planner
  • Advisory services with CFPs
  • Live coaching sessions
  • Calculators for retirement, social security, lifetime annuity, reverse mortgage
  • Virtual Financial Advisor (coming soon)

How Much Does NewRetirement Cost?

NewRetirement has both free and paid services. Here is a breakdown of their various plans

NewRetirement Planner Pricing Plans

There are currently three different pricing plans for the online retirement planner ranging from free to only $125/year. Both of the paid plans come with a free trial. Here is a summary of the features for each version.

NewRetirement Planner Pricing Plans

1×1 Advisory Services Plans

NewRetirement offers flexible financial services options. They offer personalized 1×1 financial coaching with no long-term commitment. An initial plan review session runs 45 minutes for just $99. Then, you can schedule follow-on 30-minute sessions for only $50 as needed if you want more help.

If you prefer to get direct help from a Certified Financial Planner (CFP), they offer an Advisor package starting at $500. It includes a 1 hour consultation Meeting, an expertly crafted retirement plan based on your individual needs, and a 1 hour review meeting to discuss the plan and answer questions.

If you want continued support, you can get additional advice from your Advisor anytime for $200/hour. This is an efficient way to get answers to new questions that arise in your journey. In addition, you can get help if changes arise in your lifestyle, career, financial needs, or goals.

Here’s a look at NewRetirement’s 1×1 financial services offerings. You can also request a free initial consultation through their website.

NewRetirement Review Advisor Pricing
NewRetirement’s 1×1 Financial Services Offerings

How Is NewRetirement Different From Personal Capital?

Regular readers know I’ve been a long-time user of Personal Capital’s retirement, net worth, 401(k) fee analyzer, asset allocation and other financial tracking tools.

I also consulted for Personal Capital and know Bill Harris, the founding CEO. And as a regular user of Personal Capital, I still highly recommend taking advantage of their free services.

With that said, how is NewRetirement different from Personal Capital and are they worth exploring? Frankly, retirement is such a huge milestone in everyone’s life. Thus, I think it’s always worth taking advantage of other tools out there, especially when they are free to play around with.

What you may find helpful about NewRetirement is they are highly focused on budgeting. Personal Capital is more focused on investing. Being able to accurately budget and invest well are both keys to a happy retirement. So you may find it helpful to use both.

The other main difference between Personal Capital and NewRetirement is the access to an advisor and the fee structure. Personal Capital requires a minimum of $100,000 in investment assets. In addition, PC charges an annual management fee (ex. 0.89% for the first $1M.)

NewRetirement’s advisor offering starts at $500 for a one-time complete review. And those who want further support can get additional help at $200/hour. Therefore, NewRetirement has a lower hurdle to get started and get help. And if you have a large amount of assets, NewRetirement can be cheaper on a percentage of assets basis.

Retirement Facts

Before we dive into the setup wizard, here are some interesting facts to note about retirement. Perhaps they will help inspire you to get planning.

  • The average life expectancy in the US is currently 78.7 according to the CDC. When planning for retirement, you need to think about your personal health and family medical history. No-one can accurately predict how long they will live, but estimating your own life expectancy is important for planning.
  • Only 38% of couples are having open dialogs about their investing and saving plans for retirement. Regular discussions about your financial health, goals, and retirement plans are vital. Get your partner involved today, don’t wait.
  • 75% of folks who are financially secure actively manage a financial plan. It makes sense that those who are proactive with their finances tend to yield much better results.
  • Only 44% of people between the ages of 44 to 59 feel their retirement savings are on track.

In other words, planning for retirement is very important. With interest rates plummeting during the pandemic, I’ve made the argument we should correspondingly lower our safe withdrawal rate in retirement, accumulate a larger net worth, or both.

As a result, more focus is needed when planning for retirement.

A Look Inside NewRetirement’s Retirement Planner

Curious what the NewRetirement Planner looks like? Here’s a glance at the signup process and a sample output.

In my demo, I used the following inputs for future retiree William, who lives in a coastal city with his spouse and two young children.

  • William is 38 with longevity age goal of 88
  • Spouse Helen is 36 with a longevity age goal of 92
  • They have 2 young children in daycare/preschool
  • Both plan to earn $150,000 in compensation until age 55 and then retire
  • Their combined savings is $200,000 in retirement accounts plus $50k in cash and investments
  • They own a home worth ~$1.2mil, paid 20% down, purchased 3 years ago
  • Mortgage balance of $726,000 at 2.6%, $6,500 monthly payments
  • $8,800 in monthly expenses (medical, childcare, food, utilities, transportation, insurance, clothes, entertainment, misc.)
NewRetirement Retirement Planner

NewRetirement Setup Wizard

The setup process is straight forward. You begin by entering your age, how long you hope to live and target retirement age.

Income And Savings

Then you input your compensation and savings. You can also add your spouse’s info by following the prompts to get a full picture of your family’s finances.

NewRetirement Review - Home calculator

Next, the setup wizard will help you add projected Social Security benefits and mortgage information if you own you home.

You will want to have your home’s current value, mortgage balance, interest rate, and monthly payment amount on hand.

Check out the projected $20.2m total savings for William and Helen by the year 2076.

If you’ve been a disciplined saver and are still many years off from your retirement age, you may see your total savings chart want to shout, “Wow, I’ll be rich!” at this stage of the setup process. But, don’t get too excited yet.

NewRetirement Review

Expenses

Now it’s time to input all of your monthly expenses and watch all those projected savings shrink. The positive is you may get very motivated to find ways to tighten your budget!

After you input your expenses, you get to see your retirement plan score and a detailed lifetime retirement projection chart.

Tip: Some of the colors in the chart are hard to differentiate from each other. If you hover over a category you can see it highlighted in the graph.

Results From NewRetirement’s Planner

Here’s a look at William and Helen’s retirement plan.

NewRetirement Review Retirement Plan

With a score of 135, William and Helen are in “Great” shape and are anticipated to meet >95% of their retirement needs. Even though the initial setup wizard stops here, you can go back and edit your inputs.

In addition, to get a further customized chart and score, click the “Complete My Plan” button. There are more sections you can complete such as passive income, one-time large expenses, withdrawn strategy, and basic estate planning.

Other features you can access are the Savings Timeline under the Insights menu and a Net Worth Forecast. Here’s a look at the Savings Timeline:

NewRetirement Review

And here’s a snapshot of the Net Worth Forecast chart.

NewRetirement Review - New With Snapshot

PlannerPlus Features

There are even more graphics and customizable inputs you can access with the paid version. Here are some of the best bonus features you get with the PlannerPlus version. You can try Plus free for 14 days and then for just $72/year.

  • Advanced Real Estate modeling
  • State specific Tax Projections
  • Roth Conversion Modeling
  • Roth IRA Explorer/optimizer
  • Automated Coach Suggestions
  • Relocation Modeling
  • Medicare Estimations
  • Ability to link accounts
  • Access to create scenarios
  • Advanced reports and charts
  • More control over assumptions
  • Printed Reports

Below is a snapshot of the Planner Plus Roth Conversion Explorer. This is a really neat tool because there’s been so much debate about whether converting to a Roth IRA is a good idea. The tool enables the user to make a more objective decision and model out the results way into the future.

NewRetirement Roth Conversion Explorer

Below is a snapshot of the PlannerPlus Real Estate Modeling tool. Given real estate is my favorite asset class to build wealth, I’m thrilled to see such a robust tool that can be used for a larger percentage of my net worth. In fact, for most Americans, real estate accounts for a majority of our net worths.

NewRetirement PlannerPlus Tool On Real Estate

NewRetirement Positives

Here’s a quick summary of NewRetirement’s offering.

  • Free – It’s free to use their basic retirement planner for as long as you want and the paid versions come with a free trial.
  • Simple to setup – Built for DIY retirement planning newbies, the setup questionnaire process is simple and easy to understand.
  • Customizable – It’s easy to make the planner as customized as you want, especially the paid versions. Flexibility is great when you want to plan for different scenarios.
  • Visualize if your money could run out or overflow – Many people are visual learners. The graphs make it easy to see when you could run out of money and when you could have excess funds.
  • Linking accounts isn’t required – Unlike Personal Capital, you don’t have to link any of your personal financial accounts to use the planner.

Areas Of Improvement

  • No free advice – NewRetirement offers free tools to make your own decisions, but not free advice. To get investment and budgeting advice, you would need to hire a 1X1 financial consulting session.
  • Can’t see the numerical score ranges – You can’t see the maximum possible score or what the numerical ranges are for great vs good, fair, and needs work. I guess they have their reasons for not revealing the breakdown, but I’d prefer to see the details.

NewRetirement Conclusion

When it comes to retirement planning, it’s better to be more prepared than not. NewRetirement is designed to help those who like a DIY approach, gain confidence and better plan for retirement. With NewRetirement, you can gain a much better grasp of you retirement future.

The company has several new initiatives in the works that should be rolling out in the near future. Be on the lookout for their Virtual Advisor, a simpler interface, more customizable inputs such as dependents and employer 401(k) matching, and more.

To sign up for NewRetirement’s award-winning retirement tool for free, click here. It is truly one of the best new tools I’ve seen come to market for DIY retirement planners.

Personal Capital Review 2021: Best Personal Finance Tool

Published: 01/01/2021 | Updated: 01/24/2021 by Financial Samurai 60 Comments

I’ve been using Personal Capital’s free financial tools to track my net worth, manage my cash flow, and optimize my investments for over eight years. Let me share with you the most thorough and honest Personal Capital review about their free financial application.

From 2013 – 2015, I was also a consultant for the firm. Therefore, I have intimate knowledge of their people, their technology, and their product. I still keep in regular contact with all the senior management.

It’s my belief that Personal Capital is hands down the best free financial tools you can find online. It helps you manage your finances and achieve a more secure retirement. I’ve tried everything from Excel, to Mint, a plethora of other financial apps, and nothing comes close to Personal Capital’s tools.

With Personal Capital, you can do the following things for free:

  • Automatically track your net worth
  • Analyze your investment portfolios for excessive fees
  • Analyze your investment portfolios for proper asset allocation
  • Track and manage your income and expenses
  • Run various retirement planning calculations to ensure a better financial future

Personal Capital currently manages over $13 billion in managed client assets. They also track over $900 billion in assets for over 2 million registered users for free. This amount is a testament to their money management capabilities and product offerings.

Their competitive advantage is that they built their company from the ground up with technology at its core. As a result, they are much more flexible in tailoring offerings to meet consumer demand. Let’s move onto the detailed Personal Capital review.



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Otis: A Fun Way To Invest In Cultural Assets And Collectibles

Published: 11/24/2020 | Updated: 12/07/2020 by Financial Samurai 11 Comments

Ever since I was young, I’ve been a collector with the little money I had. As an adult, it’s so fun to be able to buy things I couldn’t afford as a kid. Some of my favorite memorabilia include retro-Jordans and He-man figures from the 1980s.

I still remember paying a couple bucks in high school to buy a pack of Topps baseball cards. My hope was to land a Ken Griffey Jr. rookie card.

Although I never got one, it was always such a fun moment of anticipation before tearing open the pack. Today, a PSA-10-graded version of Ken Griffey Jr.’s 1989 Upper Deck rookie card now routinely sells on eBay for about $1,500. That’s roughly 20 times what it would have fetched 25 years ago.

One day in 1993, I found a treasure in my grandparent’s garage in Honolulu, Hawaii. I stumbled upon half of my father’s 1956 and 1957 Topps and Bowman baseball card collection. It was just sitting in an old cupboard in the garage. There were silverfish and cockroaches everywhere when I found the boxes.

Luckily, almost all the cards were in good condition. I made sure they stayed in good condition by outfitting each one with plastic sleeves and protective plastic shields.

Unfortunately, we couldn’t find many of my father’s American league baseball cards, which included several Ted Williams cards based on his recollection. Sadly, my grandparents must have thrown them away.

After a slow period in the mid-1990s and early-2000s, it appears that the sports card market is now booming. As a result, I was excited to be approached by Otis to sponsor a guest post on Financial Samurai and share its value proposition.

[Maybe my Sandy Koufax rookie card is worth something]


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Masterworks Review: A Way To Invest In Fine Art

Published: 10/21/2020 | Updated: 01/29/2021 by Financial Samurai 29 Comments

You may not know this, but I create original artworks with the interior paint I use for each house I’ve bought since 2003. Not only is art fun, but maybe one day, these original pieces will sell for megabucks! So when Masterworks approached me to do a sponsored post about investing in fine art, I welcomed them with open arms.

Masterworks, founded in 2017, is an investment platform that helps non-accredited investors buy shares of fine art. The fine art market has been booming due a surge in wealth by the investor class. Further, with the growth of countries like China, there is more capital chasing fine art than ever before.



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Edly Review: A Way To Invest In Income Sharing Agreements (ISAs)

Published: 09/17/2020 by Financial Samurai 21 Comments

Edly Income Sharing Agreement

An Income Sharing Agreement, or ISA, is an alternative way for students to pay for university. Traditionally, students take out loans and take all the risk. If a student graduates from college with no job or a low-paying job, a university isn’t going to make up the difference.

This asymmetric risk profile is one of the reasons why I’ve been imploring people to attend a more affordable college. If you’re not already rich or don’t receive free grant money due to your genius, please don’t overpay for college. Further, be smart about picking a major in high demand.

Unfortunately, with the overall student loan debt amount ballooning to ~$1.6 trillion in 2020, I don’t think many people are paying attention. Good thing there’s an alternative to taking out student loans in the form of an Income Sharing Agreement.

Instead of taking out a student loan at a potentially high interest rate, with an ISA, a student agrees to pay a fixed percentage of their earnings for a fixed number of months.

In a typical ISA, students would agree to pay a fixed percentage of their income once they are employed and are earning in excess of a specified threshold salary. This threshold is usually $30,000 – $40,000, depending on the ISA.

An ISA is quite different from student loans, which accrue interest during college and regardless if the student finds a job or not. Further, student loan payments generally have at most a 6-month moratorium after graduation before payments are due.

It seems to me the an ISA is a win for the student and a win for the investor. Therefore, I’ve invited Edly, an ISA investment platform to write a sponsored post and share further insights about this fast-growing asset class.



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The Definitive Guide To Farmland Investing: A Trillion-Dollar Asset Class

Published: 09/01/2020 by Financial Samurai 13 Comments

I’m pleased to share with you a comprehensive guide to farmland investing by FarmTogether, a leading farmland investing platform and Financial Samurai sponsor. Not only is this article full of information, it will evolve with updated information as the landscape changes.

Farmland might be the world’s most promising untapped asset class, and the newest opportunity in real estate investing. Estimated at a value of over $2.5 trillion in the US alone (USDA), returns to farmland in the US have averaged over 10% for the last 47 years (Forbes). 

In fact, from 1992-2016, farmland assets averaged an especially impressive 12% average return, outperforming real estate (NCREIF) at 8.7% and the Russell Stocks Index 3000 at 8.8%. Farmland also has a history of preserving capital in times of economic downturns, displaying an impressive resilience over the past two decades (NCREIF).

Farmland investing is resilient to the economic cycle
Source: Nuveen

Still, it might come as a surprise that until recently, there haven’t been many options for non-institutional investors looking to get involved, aside from making the large investment and commitment needed to buy an entire farm outright. 

Thankfully, this is changing. New technology-driven platforms ours, which was reviewed on the site earlier this year, are offering fractional investment solutions that make it possible for a wider range of investors to participate.

This innovative technology is being introduced to the market at a time of huge changes in farmland ownership – as well as in farming itself – and hints at an unprecedented opportunity for a wider investor audience to share in these promising returns.



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AcreTrader Review: Unprecedented Access To An Overlooked Asset Class

Published: 07/30/2020 by Financial Samurai 20 Comments

AcreTrader is a proud new sponsor of Financial Samurai. In my quest to continuously learn about new alternative assets and new promising investment platforms, I’ve invited AcreTrader to write a guest post about farmland investing. During times of uncertainty and stock market volatility, it’s nice to invest in real assets.

Mark Twain once said, “Buy land. They’re not making it anymore.”

Many investors view land as one of the oldest and most stable asset classes out there. Land is capable of generating great long-term returns with an added benefit of capital preservation during times of economic distress.

Now, online investing platform AcreTrader makes it easier than ever for investors to get involved. 



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DiversyFund Review: A Private REIT With No Management Fees

Published: 07/18/2020 | Updated: 02/14/2021 by Financial Samurai 1 Comment

DiversyFund is a real estate marketplace that enables nonaccredited investors to diversify into real estate investing for as little as $500. As an experienced real estate and real estate crowdfunding investor, this is my detailed DiversyFund review.

DiversyFund was founded in 2016, but really only received its Series A funding in early 2018. Therefore, DiversyFund is one of the newest real estate crowdfunding platforms with the least amount of funding.

The leading real estate crowdfunding platform for nonaccredited investors (which includes accredited investors) is Fundrise. Fundrise was founded in 2012 and is the creator of the private eREIT and eFund for real estate.

Based in San Diego, California, DiversyFund has been primarily focused on commercial real estate opportunities in Southern California.



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Top Product Reviews

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  • CrowdStreet review (real estate marketplace)
  • Credible review (student loans, mortgages, personal loans)
  • PolicyGenius review (life insurance)
  • LendingTree review (mortgages)
  • Allstate review (auto insurance)
  • Masterworks review (art investing)

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