Allocation % for alternative savings robo account?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
Investment17
Posts: 14
Joined: Tue Feb 28, 2017 9:14 am

Allocation % for alternative savings robo account?

Postby Investment17 » Sat Mar 18, 2017 8:45 pm

Good evening everyone.

I am enjoying reading about investing and there seems to be a lot of smart people on these boards.

I have a betterment account, and I currently have my ROTH set to 90/10. I am in my very early 30s and plan on maxing this out every year.

Now I also have a build wealth general investment account. This account I would like to use more as a savings account, where as I have enough set aside in my normal savings with my bank for 12 months worth of expenses, and now I would like to start putting future contributions towards my wealth account to see some returns on it, instead of it sitting there doing nothing. This will be money that I might want to take from down the line for a new home payment, or for big vacations, etc etc. Either way, I will keep contributing and trying not to take out anything if possible, but I am thinking in terms on if I had to and did, short term as in 5-15 years. I already have a liquid emergency fund.

I was thinking about putting this on a 70/30 allocation, so I don't get hit as hard with a 90/10 if the market drops. Would you guys recommend that allocation type, or should I go even lower?



Thank you very much

confusedinvestor
Posts: 94
Joined: Thu Mar 15, 2012 11:04 am

Re: Allocation % for alternative savings robo account?

Postby confusedinvestor » Sat Mar 18, 2017 9:07 pm

AS you are a current Betterment customer, did you try to see the AA suggestion from Betterment platform on this specific goal?

FYI, i am in the same situation like you and i tried Betterment, i got a AA log Stock/Bonds as 40:60 with Betterment for short-term wealth creation account but I didnot use Betterment as they have .25 fees and now did the same with Schwab Intelligent portfolio with 30:70 AA

Note: Both in Betterment (.25 fees) or Schwab Intelligent (0 fees but % Cash) you cant decide on AA, the platform will decide it for you.

You can also call a Schwab CFP with .28 fees and they can help with you this. Check out Schwab Intelligent Advice, it is better than Betterment CFP with .40 fees

Investment17
Posts: 14
Joined: Tue Feb 28, 2017 9:14 am

Re: Allocation % for alternative savings robo account?

Postby Investment17 » Sun Mar 19, 2017 9:13 am

They did give a recommendation. They recommend the safety net goal of 40/60. I'm not really looking at it as a safety net emergency fund though. That's why I was thinking about going 70/30. Maybe I'm being to aggressive for a savings account alternative.

I don't mind the fee with betterment. I love the interface and the support from them has been great. I really don't have any issues or interest in leaving them, but thank you for the alternatives.

tj
Posts: 1786
Joined: Thu Dec 24, 2009 12:10 am

Re: Allocation % for alternative savings robo account?

Postby tj » Mon Mar 20, 2017 10:10 am

Investment17 wrote:They did give a recommendation. They recommend the safety net goal of 40/60. I'm not really looking at it as a safety net emergency fund though. That's why I was thinking about going 70/30. Maybe I'm being to aggressive for a savings account alternative.

I don't mind the fee with betterment. I love the interface and the support from them has been great. I really don't have any issues or interest in leaving them, but thank you for the alternatives.


70/30 could drop by 35% or more. Does that sound like a savings account alternative?

Alto Astral
Posts: 593
Joined: Thu Oct 08, 2009 10:47 am

Re: Allocation % for alternative savings robo account?

Postby Alto Astral » Mon Mar 20, 2017 11:00 am

How many months of living expenses would your liquid emergency fund cover?

I've read a Betterment blog on investing emergency funds in some kind of AA. While I disagree, few on this recommend it. If I needed it in 5-15 years it would be in 5-year laddered CDs. Maybe some in Vanguard Total Bond Market Index

Investment17
Posts: 14
Joined: Tue Feb 28, 2017 9:14 am

Re: Allocation % for alternative savings robo account?

Postby Investment17 » Mon Mar 20, 2017 11:06 am

Alto Astral wrote:How many months of living expenses would your liquid emergency fund cover?

I've read a Betterment blog on investing emergency funds in some kind of AA. While I disagree, few on this recommend it. If I needed it in 5-15 years it would be in 5-year laddered CDs. Maybe some in Vanguard Total Bond Market Index


I have 8 months in my liquid emergency.

I ended up setting my alternative account to 60/40. Since I am still young, I keep my roth at 90/10

Investment17
Posts: 14
Joined: Tue Feb 28, 2017 9:14 am

Re: Allocation % for alternative savings robo account?

Postby Investment17 » Mon Mar 20, 2017 11:08 am

tj wrote:
Investment17 wrote:They did give a recommendation. They recommend the safety net goal of 40/60. I'm not really looking at it as a safety net emergency fund though. That's why I was thinking about going 70/30. Maybe I'm being to aggressive for a savings account alternative.

I don't mind the fee with betterment. I love the interface and the support from them has been great. I really don't have any issues or interest in leaving them, but thank you for the alternatives.


70/30 could drop by 35% or more. Does that sound like a savings account alternative?


How much of a drop for 60/40 and 40/60?

Alto Astral
Posts: 593
Joined: Thu Oct 08, 2009 10:47 am

Re: Allocation % for alternative savings robo account?

Postby Alto Astral » Mon Mar 20, 2017 11:17 am

Investment17 wrote:
Alto Astral wrote:How many months of living expenses would your liquid emergency fund cover?

I've read a Betterment blog on investing emergency funds in some kind of AA. While I disagree, few on this recommend it. If I needed it in 5-15 years it would be in 5-year laddered CDs. Maybe some in Vanguard Total Bond Market Index


I have 8 months in my liquid emergency.

I ended up setting my alternative account to 60/40. Since I am still young, I keep my roth at 90/10

With 8 months in liquid emergency, you can probably hold the rest in your desired AA. What's your overall AA across 401ks, Taxable etc and not just Roth?

In case this helps: I have 12 months EF in 5 year CD ladders. I have the rest in my desired AA, including in Taxable. I have 2 kids who will start college in 15 years, but I am not doing anything separate. Just one AA. With that kind of time horizon, I may just cash-roll their tuition if I can afford it. In your case, you may want to set aside some for your down-payment and AA the rest

Investment17
Posts: 14
Joined: Tue Feb 28, 2017 9:14 am

Re: Allocation % for alternative savings robo account?

Postby Investment17 » Mon Mar 20, 2017 11:27 am

Alto Astral wrote:
Investment17 wrote:
Alto Astral wrote:How many months of living expenses would your liquid emergency fund cover?

I've read a Betterment blog on investing emergency funds in some kind of AA. While I disagree, few on this recommend it. If I needed it in 5-15 years it would be in 5-year laddered CDs. Maybe some in Vanguard Total Bond Market Index


I have 8 months in my liquid emergency.

I ended up setting my alternative account to 60/40. Since I am still young, I keep my roth at 90/10

With 8 months in liquid emergency, you can probably hold the rest in your desired AA. What's your overall AA across 401ks, Taxable etc and not just Roth?

In case this helps: I have 12 months EF in 5 year CD ladders. I have the rest in my desired AA, including in Taxable. I have 2 kids who will start college in 15 years, but I am not doing anything separate. Just one AA. With that kind of time horizon, I may just cash-roll their tuition if I can afford it. In your case, you may want to set aside some for your down-payment and AA the rest


Its all new to me. I never thought about retirement until now, and now is the time when I started all this.

I do not get 401K from my job, just my Roth that I max out on my own. We will be having discussions about a 401K in the coming months. Its not a big company, but very stable.

Everything else is either in the liquid fund or ill be putting future savings into my other Alternative account. For now I just have a couple thousand in that account. Just opened a few weeks ago

I guess you can say I am starting from the beginning with all this.

Alto Astral
Posts: 593
Joined: Thu Oct 08, 2009 10:47 am

Re: Allocation % for alternative savings robo account?

Postby Alto Astral » Mon Mar 20, 2017 11:52 am

Investment17 wrote:
Alto Astral wrote:
Investment17 wrote:
Alto Astral wrote:How many months of living expenses would your liquid emergency fund cover?

I've read a Betterment blog on investing emergency funds in some kind of AA. While I disagree, few on this recommend it. If I needed it in 5-15 years it would be in 5-year laddered CDs. Maybe some in Vanguard Total Bond Market Index


I have 8 months in my liquid emergency.

I ended up setting my alternative account to 60/40. Since I am still young, I keep my roth at 90/10

With 8 months in liquid emergency, you can probably hold the rest in your desired AA. What's your overall AA across 401ks, Taxable etc and not just Roth?

In case this helps: I have 12 months EF in 5 year CD ladders. I have the rest in my desired AA, including in Taxable. I have 2 kids who will start college in 15 years, but I am not doing anything separate. Just one AA. With that kind of time horizon, I may just cash-roll their tuition if I can afford it. In your case, you may want to set aside some for your down-payment and AA the rest


Its all new to me. I never thought about retirement until now, and now is the time when I started all this.

I do not get 401K from my job, just my Roth that I max out on my own. We will be having discussions about a 401K in the coming months. Its not a big company, but very stable.

Everything else is either in the liquid fund or ill be putting future savings into my other Alternative account. For now I just have a couple thousand in that account. Just opened a few weeks ago

I guess you can say I am starting from the beginning with all this.

You've done a pretty good job. I would skip betterment for now since you are just starting out. They have some nifty Tax Lost Havesting automation etc but you can probably find that on this forum. You may be able to save a lot on those 0.25% fees in the long run. I have my Roth at Vanguard and manage my AA in a spreadsheet. I just pick VanguardTotalBond and VanguardTotalStock index funds. If you have at least $10K to put in each, go for their "Admiral" flavor to get a lower ER. Otherwise starting with Investor class shares is fine till you hit $10K.

To your original question, 70/30 is a conservative AA if you are in your thirties. This is my current AA as well. I am thinking of going 80/20 but I am being hammered on another post about this. Of course, they care about you hence the serious tone. Here's a snippet: viewtopic.php?f=10&t=214196&p=3290076#p3290044


Return to “Investing - Help with Personal Investments”

Who is online

Users browsing this forum: AlohaJoe, BigJohn, Bing [Bot], Bob, Dan S., Flux, gilgamesh, jebmke, monty, pycut, RadAudit, retired61, retiredjg, Silk McCue, Yahoo [Bot] and 67 guests