‘Can We Talk Finances?’ ‘Not Tonight Dear I Have a Headache’
I like to think I’m always up for sex. Really, I have a toddler and a fledgling career I don’t know how to manage and a brain like a course of misfiring bumper cars, not to mention stereotypical female hangups about my body, so let’s be real, my initial reaction is sometimes, “Ugh, can I suggest he check out what new and exciting porn the Internet has to offer instead?” But marital sex is a picnic, a catered picnic on a sunny, windswept European beach, compared to talking about finances.
As I’ve mentioned, both Ben and I are now freelance cash scroungers, meaning we pay for family health insurance out of pocket. Our other big ticket items include housing (mortgage and maintenance) and childcare (the cost of a second mortgage). Factor in food, utilities, transportation/travel, child purchases, and whatnot and voila! We have to draw on savings to make ends meet.
No problem, right? We have savings and that’s what the savings are for. I don’t mean the long-term savings: for Retirement, I have an IRA and Ben has a 401(K); for future College, Babygirl (Swarthmore class of ’33, where she will get a BS in Engineering but — because I’m a benevolent dictator — she can minor in whatever she likes) has a 529. Most of our money, what we need in the short term plus a bundle we’ve collected over the years, though, is in a savings account. A ho-hum, run-of-the-mill, doing-nothing-for-you, may-as-well-keep-it-under-your-mattress-you-ninny savings account. In the bank. Some of it should stay there, accessible. But that all of it is there would make Jack Donaghy throw a drink at me.
We are smarter than this, both of us. We know we should be making our money work for us like a team of sled dogs, pulling our broken sleigh across the arctic. What’s holding us up?
Decisions. As it turns out, you can’t merely wave your hand in a languorous way and say, “Be a dear and invest it in low-cost index funds won’t you, Philip? There’s a good chap.” I mean, for one thing, who is Philip, is he the butler? And if so how does he have access to the accounts? For another there are so many follow up questions. How much? With whom? Will it get rebalanced? Periodically? Regularly? How much are fees? How much are taxes? Would the money ultimately do better under the mattress?
Warren Buffett suggests that Vanguard will work as well as a guy you pay to do your money for you. That’s inspiring and convenient for me since my IRA is already with Vanguard. Ben is methodical, though, and has been doing pages and pages of research. He thinks Betterment — one of those new-fangled “robo advisors” — might be the way to go. Because he is a feminist and not a patriarchal throwback, though, he won’t just handle it, he wants my buy in. And I desperately want to read Sarah Waters’ new book and be left alone.
As a compromise, I let him talk to me about finances for half an hour yesterday while I looked at the ceiling and thought of England, and I promised to look up Betterment and alternatives as well as crowd-source opinions today. The blogger / lifehacker Daniel Odio, for example, is so conscientious he’s investing two robo advisors and letting them duke it out while he watches:
I’ve allocated $5k to Betterment and $5k to Wealthfront as a long-term test. I’ll be posting performance updates over time, but their absolute performance isn’t as meaningful as their relative performance, since absolute performance is just a measure of how the market is doing generally. What I’m really interested in knowing is, over time, is one better served by placing a bet on Wealthfront, or Betterment?
Right now, both are in positive territory, with Betterment clocking a 0.5% gain and Wealthfront a 0.4% gain. They’ve both been tracking each other quite closely, even though their asset allocation mixes are pretty different.
He goes on to list various minute pros and cons and notes that Wealthfront is a bit more aggressive but the big picture seems to be that both services are pretty good and oh god I’m already so bored and antsy I might pass out.
In non-robo land, our personal finance lady has also offered to take over these decisions for a small fee, and my instinct is to give everything to her and be grateful, because she’s smart and I trust her and I wouldn’t have to think about ETFs and capital gains anymore. But perhaps that’s defeatist and lazy, and Betterment / one of the other robos would do equally well at a lower cost. I DONT KNOW. I don’t know anything anymore except that I want someone to make perfect choices on my behalf and then explain them to me in a way that is neither intimidating nor condescending and results in my feeling rich enough to buy a new sweater to replace the moth-eaten ones I’ve had since the aughts.