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If you are looking for ways to make money in the stock market, options can help you not only increase your income but also limit your risk.

Unlike passive investors in the stock market who rely on stock market gains and dividends to make money, options traders have many more ways to make money.

Options can generate cash flow similar to dividends. And options can protect investments much like insurance policies do.

Here are 5 options tips to help you with your goal to make money trading.

Option Trading Tips #1: Make Money Trading Covered Calls

If you already own a portfolio of stocks, you probably make money in two ways: when stocks rise, and when companies issue dividends.

But did you know that you can proactively generate income on your terms? You don’t have to rely solely on the company issuing dividends to earn income from your shareholding.

The covered call strategy is among the most powerful options trading strategies because it lets you sell options against your stock position.

When you sell calls against your stock, you receive money into your brokerage account.

It’s not free money though. It comes with an obligation, which is to sell your stock if it rises above a certain price.

For example, in the options chain below a shareholder who decides to sell a strike 126 call option would receive $1.86 per share or $186 per contract.

Generally, one contract corresponds to 100 shares so if you owned 1,000 shares you could pocket $1,860 (less commissions costs and fees) by agreeing to sell 10 call contracts at strike 126 for a bid price of $1.86.

What’s the catch? If the stock goes above $126 by expiration, you have to sell it at $126 per share.

You still get to keep your $1,860 – nobody can take that away from you if you hold the call option through expiration, at which point it will be assigned and your stock sold.

So if you don’t think the stock will rise above $126 by the option’s expiration date, then selling calls against your shareholding makes economic sense.

What makes options trading attractive compared to dividend paying stocks is you get to control when you generate income. You don’t have to wait for a quarterly dividend payment, you can sell call options weekly.

>> Related: Learn Options Trading Basics

Option Trading Tips #2: Make Money Trading Weekly Options

How nice would it be to click a few buttons and money gets deposited into your account when you want it?

Now you know covered calls allow you to do that but how often can you do it?

For a few decades after options were introduced you were limited to generating cash flow from selling call options no faster than monthly.

But greater demand from options traders has resulted in greater choices, and these days you can trade options as frequently as weekly if you wish.

So, if you own shares in a company like Facebook or Twitter and want to pocket some additional income this week, you can.

The amount you can make on any given week tends not to be large when compared to the share price of the company, but the value of trading weekly options is not only what you can pocket on any given week but more so the compounded sum total of the income you can earn from selling calls each and every week.

>> Caution: When trading weekly options, beware of upcoming news announcements for the company. If a company is due to report quarterly earnings, volatility may be higher than normal causing options prices to be temporarily higher than usual. If traders react negatively to earnings and the share price falls, the premiums you receive from selling calls may not offset the losses in share price.

Option Trading Tips #3: Pick A Good Options Trading Platform

When you trade options to earn extra money, you will want to use an options trading platform that has a good understanding of options trading strategies to make sure your order execution is seamless and any hiccups or queries are resolved quickly.

Good options trading platforms offer fast and accurate order execution, knowledgeable staff who understand how to guide you when executing orders, competitive commissions and fees, tools and screeners to help you select trades, and mobile access when you are on the go.

The leading options trading platform for many years has been thinkorswim and these days it is rivaled closely by TastyWorks.

Both platforms were built by similar teams so you can expect a top notch experience from each of them.

tastytrade SPOTLIGHT
Investormint Rating 1 2 3 4 5 4.5 out of 5 stars	Commissions: Closing trades for Stocks & ETFs and Options are commission-free Account Balance Minimum: $0 Commissions: $0 flat rate for stocks Get Started via tastytrade secure site

The nice thing about TastyWorks is no commissions costs are charged when closing trades.

While at thinkorswim, the tools and screeners are virtually unparalleled and will please the most avid options trader.

>> Related: What Are The Best Online Options Trading Brokers?

Option Trading Tips #4: Lower Your Risk

Emotions play a big part in trading the stock market. It is difficult to remain rational when everyone else seems to be panicking and selling or fearlessly buying.

When you own a portfolio of stocks, it can be easier to panic and sell at the wrong time than when your risk is limited.

After all, when you own a stock, the most you can lose is the entire amount you paid for it if the stock were to fall all the way to zero.

In practice, the likelihood of that happening is really low. It is rare for companies to go bankrupt and share prices to get entirely wiped out.

But tell that to your inner self when fear takes over and, if you are like most people, you will find it is not so easy to stay calm.

So how do you hold on to the shares of good companies when fear is gripping the markets and still keep your risk contained to a fixed amount?

The answer comes in the form of the married put options trading strategy, which involves buying put options against shares you own.

MARRIED PUTS → STOCK MARKET INSURANCE

Married puts are about as close as you can get in the stock market to buying insurance.

Just like you might pay an insurance premium monthly to protect your car, home or even your health, so too can you pay a premium to buy protection on stocks you own in the form of put options.

The difference is that you cannot buy insurance on your car after a crash, but you can buy insurance on your stock even after it has fallen lower.

If you think a stock will continue declining you can buy protection to limit risk and contain further losses.

For example, assume the options chain below displayed put option prices.

If you were concerned the share price would decline, you could buy the strike 124 option to limit your risk if the stock falls below $124 per share.

The insurance is not free and will cost you $2.80 per share in this case. But much better to pay $2.80 than lose a lot more in the event the stock fell a good bit lower or worse if there were a stock market crash.

Above all, the married put offers peace of mind to help you make rational decisions.

The time may come where you want to sell your stock for fundamental reasons. But if nothing fundamentally has changed with the company yet market sentiment is causing a selloff, then married puts can be an ally to save your portfolio from short term dips that would otherwise occur.

>> MORE: Options Trading For Dummies

Option Trading Tips #5: Capitalize On Volatility

Volatility often breeds fear among most passive investors who have retirement accounts, such as Roth IRAs and 401(k)s, tied up in index funds.

Generally spikes in volatility accompany stock market declines so the fear is not without some merit.

But with options, you can take advantage of, rather than suffer from, volatility.

The options strategy that can make money when volatility spikes is called the straddle and involves buying call and put options.

When you buy call options you are betting on the underlying stock or index going higher. And when you buy put options you are placing a bet that the underlying stock will fall.

So when you buy calls and puts, you don’t necessarily care whether the stock goes up or down, as long as it goes up or down by a large amount.

The reason the stock needs to move a lot is the share price must generally move by a greater amount than the cost of both options in order to make money. If it hasn’t by expiration, the straddle will be under water.

So, if you think a stock could move a lot before an expiration date, the straddle can make money from the volatility in share price if it occurs.

But keep in mind the straddle is generally a speculative options trading strategy. Where the covered call strategy can be applied as part of a core investment approach, the straddle is more akin to a gamble that may payoff big but equally may fall flat.

Tip #6: Simulate Stock Ownership Buying LEAPS Options

Stocks don’t always perform the way you predict they will. Instead of directly investing in a company, you can purchase LEAPS options that give you an opportunity to earn money when a share prices increase.

LEAPS, which stands for “long-term equity anticipation security,” options are significantly cheaper than the cost of buying stocks. In fact, you get to decide what price you want to purchase stocks. For example, if a stock trades at $50 today, you could use LEAPS options to purchase the stock when it falls to $30.

Typically, you want to purchase LEAPS options that are about 20% lower than the stock’s current trading price. When the stock’s price recovers, you can sell them to make money.

Keep in mind, though, that you must pay a premium for LEAPS options. You can expect to spend about $8 per share.

If the stock’s value recovers to $50, you can share your share to earn $20 minus your $8 premium. You end up with a profit of $12 per share.

As with all investments, LEAPS options come with risk. If the share prices fall, then you won’t make any money from your purchase. You could even lose money, especially since you still have to pay the premium.

Option Tips #7: Hedge Event Risk

Hedging acts like an insurance policy against falling index values. A hedge event risk doesn’t prevent you from losing money, but it does limit the amount of money that you can lose.

When major economic events are announced, indexes can respond by increasing or decreasing in value. If the report offers good news, then your portfolio’s value could rally and earn you money. Bad news, however, could wipe out your portfolio.

Hedge event risk prevents you from losing an excessive amount of money by limiting the decline that your portfolio can experience. When you buy index puts, you earn the right to sell assets when they reach a certain price.

For example, you could use index puts to sell assets that fall below 10% of their current value. If the market plunges, you will lose at most 10% (plus the cost of the puts).

What Options Tips Have Paid Off For You? Share Your Options Trading Stories Below, We Would Love To Hear From You.

>> What Are The Best Stocks To Buy Now?

>> Find Out How To Trade Options

>> Is Facebook A Buy Or A Sell?

Whether you are a baby boomer set to retire or just starting out in the investing world, you need to know some time-tested principles for successful investing.

The investing lessons below are golden nuggets intended to help you sidestep market pitfalls and live a better retirement.

1 – Timing The Market Is
Really, Really Hard

We all love stories. Good vs evil. Superhero vs villain. Good cop vs bad cop. And when we invest in the stock market, who doesn’t love a good narrative too?

When you turn on the TV and switch to a financial news network you will undoubtedly hear analysts discussing the pros and cons of the latest hot stocks to buy.

It is easy to buy into the hype. In 1999-2000, buying technology stocks was supposedly the “smart” thing to to. Until the technology bubble burst and the stock market was the easiest place to lose a fortune in a hurry.

In 2006-2007, the place to be was anything related to real estate. A boom had caused prices of properties in the U.S. to soar, and everything from commercial real estate stocks to REITs to bank stocks were flying high.

But when 2008-2009 came along, the wind had come out of the sails of most of these hyped up stocks, and fortunes amassed during the boom times were lost even faster.

When you’re on the crest of a wave, it is hard to know where the peak is. And when markets crash, it is hard to know when the bottom has been reached.

Timing the markets well is difficult because of information asymmetry. It is a fact of investing that some investors will always know more than others.

Analysts at billion dollar funds may speak to dozens of domain experts before placing a bet on a technology stock, such as Facebook or Twitter.

They research intensely because when times get tough, they know where the floor is in the share price, and when it offers compelling upside potential as a value stock.

As a casual investor, you probably don’t have the resources to compete with research analysts at big hedge funds, and may lack the technology expertise to take on the quantitative high frequency robots transacting every few microseconds.

So, a better wager is to forego timing the market and look instead to consistently investing in low-fee index funds that match benchmarks, such as the S&P 500.

2 – Keep Costs And Fees Low

“How much do you pay in fees each year?”

TRADERS

If you are a trader, one of the biggest risks is churning your trading account. This occurs when you place so many trades that commissions costs eat up much of your profits.

These days, you can trade inexpensively on many trading and brokerage platforms, such as thinkorswim and TastyWorks, but small commissions costs multiplied by a large number of transactions can still add up to a pretty penny when all is said and done.

INVESTORS

As an investor, you may be overpaying in a number of areas. The most obvious fee to pay attention to is what you pay to your financial advisor.

Management fees can often be well over 1%, which may not sound like much, but it adds up over time.

When you combine a high management fee with the fees charged by mutual funds, you can end up paying total charges of closer to 2% annually.

While it’s easy to dismiss a 2% annual cost as insignificant, especially if you are making 7-8% or more annually on average, the power of compounding tells a different story.

It turns out that high expense ratios combined with high management fees can massively impact your portfolio wealth over time – a lot more than you might think.

For example, an investor with $100,000 paying 0.5% in total fees annually will grow their portfolio to approximately $866,000 over a 30 year period assuming 8% average annual growth.

But an investor with the same $100,000 paying 2% in annual fees on a portfolio growing at the same rate over the same time period will see their portfolio grow to just $550,000.

The seemingly small differential of just 1.5% in additional costs annually ends up costing the second investor over $300,000 in net worth over a 30 year time period compared to the investor paying much lower fees.

Funds that are famous for having low fees are Vanguard funds. You can pick them yourselves, or if you find it easier you can look to a robo advisor to do it for you.

Leading robo advisors, such as Betterment, leverage technology to manage your portfolio automatically in a way that aligns with your risk profile and financial goals.

BETTERMENT SPOTLIGHT
InvestorMint Rating 1 2 3 4 5 5 out of 5 stars	Promo: Up to 1 Year Free Management Management Fee: 0.25% – 0.40% Account Minimum (Betterment Digital): $0 Account Minimum (Betterment Premium): $100,000 Get Started via Betterment secure site

3 – Build A Diversified, Risk-Adjusted Portfolio

Investment team members at large investment funds holding concentrated portfolios of stocks often vigorously debate the merits of each stock before pulling the trigger and buying.

If you had to invest $10 billion in 30 stocks, which stocks would you choose?

At the very least, you would be careful about doing your homework before taking the plunge.

To research a company, you would want to know its financials and perform quantitative research.

Key metrics to pay attention to would include:

• What are the returns on invested capital?
• What are the price-earnings ratios?
• Are earnings growing or declining?
• How much debt does the company service?
• How much cash does the company have on its balance sheet?
• Are customers returning?
• What is the lifetime value of customers?

All these factors play a role in quantitatively analyzing a company. But equally important is qualitative research, such as:

• Does management make decisions aligned with shareholders?
• Is the market for the company’s product or service growing?
• Does the company have any inherent competitive advantages or moats, such as:
  • Network effects (e.g. Facebook)
  • Low cost advantage (e.g. Amazon)
  • Intangible assets, such as brand (e.g. Coca Cola)
  • High switching costs (e.g. Salesforce.com)
• Is the company gaining market share within its market?

If you cannot answer these questions, it’s time to roll up your sleeves and do some homework.

After all, you worked hard for your money so now that you want it to work for you, make sure it is allocated to the most efficient money-making vehicles that align with your risk tolerance.

The process of selecting stocks is time-consuming however. So, an easier path if you are not inclined to perform due diligence on stocks is to build a balanced portfolio of diversified stocks and diversified bonds.

Index funds allow you to invest in stocks that align with your financial goals and risk tolerance.

You can choose clean energy index funds, sustainable energy index funds, technology funds, or broader funds that track benchmarks, such as the Dow Jones Industrial Average, NASDAQ, or S&P 500.

The father of Efficient Market Theory, Eugene Fama, recognized that no individual will have more knowledge than the market as a whole. So, choosing low-fee, risk-adjusted index funds is a smart choice for most investors.

4 – Beware Of Fear And Greed

One of the most famous sayings of billionaire investor, Warren Buffett, is:

“Be greedy when others are fearful and be fearful when others are greedy”

What he means is when everybody else is selling in a panic, it may be time to buy. And when everybody is buying hand over fist, it may be time to sell.

But this advice is much easier said than done. We humans have cognitive biases that affect our decision-making so that rational choices become more difficult.

The endowment effect, for example, makes us value something we own more than something we don’t.

So, when you own a stock, you may think it is worth more than it is – simply because you own it!

Any trader who has placed a wager on the market rising or falling by shorting stock or buying put options, will know the inner tug when a stock falls below its purchase price – should you cut your losses or hang tight in the hopes the share price will return to breakeven and more?

Giving in to fear when stocks fall or giving in to greed when stocks rise is so common that many stock market bubbles and stock market crashes have resulted from investors becoming overly emotional at market extremes. They make buy or sell decisions based on sentiment more so than reason.

To sidestep the risks of emotional investing, look to a smart retirement planning strategy. By investing in a way that is aligned with your risk profile, you will be less likely to panic on the way down or buy hand over fist on the way up just when the market may be about to peak.

For most people, slow and steady consistent investing in an index fund that tracks the market is a better bet for the long-term.

>> Related: What Are The Best Brokers For Free Stock Trading?

5 – Study Billionaire Investors

In any field you want to succeed at, it makes sense to study people who have already been super successful. The same is true of investing.

If you want to make a lot of money in investments, then study what successful investors do!

The quintessential example is Warren Buffett. He is well known in the investment field because he has made billions without resorting to insider trading or other illegal activities and enjoys helping others learn from his success, but he is far from the only one you can study.

Stanley Druckenmiller, Joel Greenblatt, Carl Icahn, George Soros, David Tepper, Jeremy Grantham, and John Paulson are just a handful of the wealthiest investors on earth who have investing lessons galore to share.

Read books about them and focus on the principles they have to teach. Nothing is guaranteed, of course, but if you do that, it gives you the best chances of success as an investor.

6 – Ignore Unsolicited Advice

Ignoring advice you didn’t ask for is one of the most important investing lessons you’ll ever learn. Most people who offer such advice are well-meaning – but don’t know what they are talking about when it comes to investing.

Friends and family often give advice based on misunderstandings that have become “common knowledge.” For example, many people know that the Great Depression was caused partially by a stock market crash so they may give you advice based on the idea that stock market investments are a gamble and that you should be very careful about investing anything.

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Others may have read a news headline saying a particular company is a hot investment and push you to invest in this company without knowing anything else about it.

The bottom line is that no matter how well-intentioned someone’s advice is, it’s not helpful unless they have facts to back it up.

If someone makes a suggestion about when, how, or why you should invest, ask yourself what this person’s experience with investment is.

If the person hasn’t made a lot of money via investments themselves or relies on a financial advisor to direct their retirement investments without giving much input into the process themselves, that person’s advice is not based on knowledge and listening to it could be risky.

You don’t have to tell people they don’t know what they’re talking about, of course, and if the advice-giver is a friend or family member you probably don’t want to hurt their feelings. But you don’t have to take their advice either. Thank them for it and then do what makes sense to you regardless of their opinion.

7 – Max Out Your Retirement Accounts

The old saying is that there is no free lunch in the stock market, but retirement accounts are as close as you can get to one.

If you max out your 401(k) plan, you can put $18,000 a year into a retirement account that grows tax-free until you take withdrawals.

If you are above the age of 50, you can invest up to $24,000 annually.

So, if you earn $100,000 annually and allocate the maximum amount of $18,000 to your 401(k), just $82,000 is taxable; it’s a great way to lower your tax bill.

Retirement accounts, such as 401(k)s, IRAs, and Roth IRAs, are a great way to grow your wealth over time.

Not only do you enjoy tax-free growth of earnings, but you reduce the taxes you pay to the government short-term.

What investing lessons have you learned to build wealth in the stock market? Share your stories with us below, we would love to hear from you.

>> How Does A Fed Rate Hike Affect You?

>> What Are The Best Robo Advisors?

>> Who Are The Best Online Stock Brokers For New Traders?

Some of the most innovative players in financial management these days are robo-advisors, which offer returns comparable to those attained by human investment advisors but with significantly lower fees.

Two of the best-known names in the robo-advisor world are Wealthfront and Vanguard Personal Advisor Services.

While the Vanguard Group is one of the world’s oldest and most illustrious investment companies, its foray into digital money management didn’t begin until recently.

In contrast, Wealthfront has been offering automated management services to clients for over a decade.

So is age or experience a better bet? In this Wealthfront vs Vanguard review we help you decide.

How Robo-advisors Work

Robo-advisors are digital money managers that rely upon algorithms to select investments and calculate asset allocations.

When you sign up with a robo-advisor, you’re given a questionnaire to fill out; your answers are used to determine your risk tolerance and your future financial goals.

A diversified, risk-adjusted portfolio is then created for you, and that portfolio will most likely consist of exchange-traded funds (ETFs).

Vanguard Personal Advisor Services may be most appealing to deep-pocketed investors who are interested in the hands-off investing experience offered by robo-advisors yet still want the reassurance of knowing a human financial consultant is available.

VANGUARD PERSONAL ADVISOR SERVICES
InvestorMint Rating 1 2 3 4 5 4.5 out of 5 stars	Management Fee: 0.30% Account Minimum: $50,000 Get Started via Vanguard secure site

Wealthfront is best for hands-off investors who don’t need the fallback of phone support with human financial experts.

Vanguard Personal Advisor Services
vs Wealthfront Features

Vanguard Personal Advisor Services is actually a hybrid service: It combines computer-based money management with human advice.

To start an account, you must invest a minimum of $50,000.

Management fees of 0.3% are in line with the fees charge by other top robo-advisors.

Wealthfront’s process, on the other hand, is completely automated; its fees are only 0.25%, and you can start an account with as little as $500.

Wealthfront vs Vanguard
Fee Comparison

Vanguard Fees: Vanguard Personal Advisor Services charges an annual management fee of 0.3%. For clients who have invested $1 million or more, that fee is waived.

Although Vanguard primarily uses its own commission-free ETFs, fund expense ratios still get passed on to clients; these come to between 0.04% and 0.12% annually.

Additionally, Vanguard charges an annual account service fee of $20 and may charge you for transactions like transferring funds between accounts.

Wealthfront Fees: Wealthfront’s management fees are 0.25%.

Fees are calculated on the basis of your portfolio’s average monthly balance and are subtracted from your balance once every month.

No other transaction fees apply.

Wealthfront selects ETFs based on risk factors aimed at maximizing returns for given levels of risk.

Expect to pay annual ETF expense ratios between 0.08 and 0.12%.

WEALTHFRONT SPOTLIGHT
InvestorMint Rating 1 2 3 4 5 4 out of 5 stars	Management Fee: $0 for first $10,000 An additional $5,000 managed free for each friend invited who signs up Management Fees thereafter: 0.25% Account Minimum: $500 Get Started via Wealthfront secure site

Investment Minimums

You will need to invest at least $50,000 with Vanguard Personal Advisor Services to open a new account.

Wealthfront will allow you to open an account with as little as $500.

Vanguard vs Wealthfront
Account Types

Tax Strategy

Tax-loss harvesting is applied by Wealthfront and involves selling losing positions in order to offset capital gains with the aim of lowering the tax impact.

The original investment is then replaced with another investment that correlates with the portfolio’s risk and return objectives.

Wealthfront harvests tax losses on a daily basis.

For investments over $500,000, Wealthfront harvests individual stocks for tax benefits through its Smart Beta investment feature.

Individual stocks are typically more volatile than ETFs and so may offer more opportunities to minimize taxes.

Wealthfront also offers tax-minimized brokerage account transfers that port certain assets automatically to your new Wealthfront account; securities held long-term (as defined by the IRS) fall into this category.

Software algorithms then sell those securities so that they can be realized in the form of tax savings.

Vanguard Personal Advisor Services does not routinely use tax harvesting, but the strategy may be implemented for some portfolios on a case-by-case basis.

Vanguard’s client portfolios are set up by human financial advisors who allocate assets to both taxable and tax-advantaged accounts.

When shares need to be sold for rebalancing purposes, the services look to tax-advantaged accounts first.

Invest with Wealthfront >> Invest with Vanguard >>

Human Advice vs Digital Advice

Wealthfront does not facilitate client interaction with human financial advisors by phone.

However, you’ll always have the opportunity to connect with a human advisor by phone, email or video conferencing at Vanguard.

When you first sign up for an account, Vanguard will customize an actionable financial plan for you based upon your answers to the interview questionnaire.

Shortly thereafter, a personal advisor will speak with you either by phone or by video chat. This will give you the opportunity to ask questions and to express preferences that were not reflected in your original questionnaire answers.

This consultation is offered free of charge, and you are under no obligation to move forward with it after you talk with your advisor.

If you proceed, a human planner uses the allocations recommended by the algorithm to craft a customized portfolio for you.

Your account is then reviewed periodically by a Vanguard advisor to help ensure target allocations and risk preferences are maintained.

All clients have access to a dedicated team of over one hundred advisors should questions arise; however, there’s no guarantee of continuity, so clients may not work with the same advisor twice.

Clients who keep more than $500,000 in their accounts have the option to work with a dedicated representative for an additional fee; these clients can also send investment-specific questions via email to a Certified Financial Planner at no cost.

This access to human financial planners means that clients of Vanguard Personal Advisor Services can get advice about investments they hold outside Vanguard because these advisors function like other financial planners.

Access to human financial planners also means that Vanguard can give you some measure of support for your 401(k) plan, which is a frontier in which few robo-advisors venture.

>> Manage Your 401(k) Plan Automatically with blooom

Tools and Calculators

Vanguard does not make many tools, calculators or widgets available to clients because clients have the option to plan scenarios with live financial advisors.

Wealthfront offers a personal finance modeling system called Path that allows clients to investigate future outcomes based on information from linked financial accounts, their current investments and their risk tolerance.

The tool parses these along with assumptions about inflation rates, changes in consumer spending habits and other economic criteria taken from the Bureau of Labor Statistics’ Consumer Expenditure Surveys to create a series of likely future scenarios.

Asset Classes

Wealthfront offers clients access to three basic portfolios, depending upon the level of risk that client is comfortable assuming:

It uses the principles of Modern Portfolio Theory to balance these portfolios.

Portfolios typically consist of 6 to 8 ETFs that represent stocks, bonds and assets such as Treasury Inflation-Protected Securities.

Vanguard diversifies holdings with the aim of increasing investment returns and minimizing losses.

Personal Advisor portfolios have access to Vanguard’s Admiral Shares, a class of mutual funds that offer low expense ratios and that were originally reserved for high net-worth investors.

Other core holdings may include bond market index funds, international stock market index funds, international bond market index funds and tax-exempt funds that invest in municipal bonds. Many of these are Vanguard-branded ETFs.

Clients who want access to liquidity also have the option of including money-market funds.

Invest with Wealthfront >> Invest with Vanguard >>

Customer Support Comparison

Personal Advisor customers have access to Vanguard advisors whenever they have questions about their portfolios or their financial overview.

Any tech questions relating to the digital platform are answered Monday through Friday from 8:00 a.m. to 8:00 p.m. EST.

Wealthfront gives customers the opportunity to resolve website access issues with a live customer support team.

The phone line is open Monday through Friday from 11:00 a.m. to 8:00 p.m. EST. Customers can connect with the customer support team by email too.

Mobile App Comparison

Wealthfront allows clients to monitor their accounts through mobile apps available for both iOS and Android smartphones.

The apps are data-driven, so with a touch of a button, clients can generate charts and tables that display how investments have performed over time.

Wealthfront also features a news feed for mobile devices to which clients can subscribe.

Vanguard’s mobile app is available for iPhones, Android phones, iPads and Kindle Fires, and it allows clients to connect with any of their Vanguard accounts, including their Personal Advisors services account.

Wealthfront vs Vanguard Winner

Comparing Wealthfront vs Vanguard Personal Advisor Services is a bit like comparing apples to oranges.

Personal Advisor Services has many automated features that permit Vanguard to describe it as a robo-advisor platform.

However, it is a system driven by human decision-making because, after all, your portfolio is initially put together by a human financial planner, and the algorithms mostly work to keep those portfolios in balance.

Wealthfront, on the other hand, is a completely automated platform that creates your portfolio based on its proprietary algorithms and that automatically adjusts your portfolio as needed to maintain your level of risk tolerance.

Vanguard is the clear winner if you’re an investor for whom human contact is important or you’re an investor who wants some measure of control over your investments.

If you’re basically a hands-off investor who is comfortable following a set investment strategy even if there are a few bumps along the way, Wealthfront may be the better choice.

You should also consider Wealthfront if you’re working with a relatively small account balance or you’re planning for a specific goal such as a child’s college education.

Which Robo-Advisor
Is Best For You?

Wealthfront is the best choice if:

• You’re interested in a low-cost robo-advisor service with a proven track record
• You’re a hands-off investor who’s comfortable formulating a risk strategy and sticking with it for the long term
• You’re saving for retirement or a specific goal such as your child’s college education

Vanguard Personal Advisor Services is the best choice if:

• You’re prepared to invest $50,000 or more
• You’re interested in having a personalized investment plan created for you at no cost
• You want the benefit of a human financial planner at a low cost who will advise you not only on your Personal Advisor portfolio but also on your accounts outside of Vanguard

Invest with Wealthfront >> Invest with Vanguard >>

Financial technology companies have increasingly combined capitalism with social good. For example, student lender CommonBond funds the education of a child in need when it approves a loan. And Wunder Capital is no different.

In this same spirit of making money while doing something good for the world, Wunder Capital offers investors the chance to earn monthly cash flow by investing in a diversified solar portfolio that promotes renewable energy.

Wunder Capital develops and manages solar investment funds. From start to finish, the company takes charge of sourcing commercial solar opportunities, underwriting contracts, and constructing each project. Once the solar system is live, Wunder Capital manages the ongoing operations, bills energy customers, and distributes proceeds to investors.

At this time, only accredited investors are eligible to invest but those who qualify can, according to the company, earn annual returns as high as 6% through the Wunder Income Fund and up to 8.5% annually in other funds.

But before investing your hard-earned money, what else do you need to know?

Wunder Capital Spotlight

WUNDER CAPITAL SPOTLIGHT
InvestorMint Rating 1 2 3 4 5 3.5 out of 5 stars	Minimum Investment: $1,000 Accredited Investors Only: YES Investment Duration: 5 → 10 years Get Started via Wunder Capital secure site

What Is Wunder Capital?

Wunder Capital loans money from accredited investors to large scale solar projects in need of financing.

Wunder Capital connects investors with large scale solar projects in need of financing. As solar investments produce returns, investors earn a share of the proceeds, which are deposited directly into investors’ bank accounts.

Wunder Capital is a unique financial technology company. Unlike most FinTech companies that are primarily online, Wunder Capital has both an online portal for investors and an offline presence managing and maintaining solar projects.

The company has an extensive national reach, partnering with over 100 commercial solar developers and installers in 27 states, so Wunder Capital provides a curated solar portfolio much like a solar index fund.

What makes the investment opportunity attractive to stock market investors is that the asset class is uncorrelated with traditional equity markets, so solar can offset exposure to market fluctuations to some extent.

Plus, portfolio volatility is expected to be lower than that of a traditional brokerage account portfolio because returns are generated as solar loans are repaid. The loans are backed by tangible businesses and have the potential to produce consistent monthly cash flow.

For all the obvious benefits, the one big drawback for the average investor is that only accredited investors who earn $200,000 annually (or $300,000 if married) or have a net worth of $1,000,000+ excluding a primary residence are eligible to invest.

What Are The
Wunder Capital Funds?

Wunder Capital offers three investment funds spanning investment terms from 5 → 10 years and offering returns from 6.0% → 8.5%.

Wunder Capital operates three funds:

• Wunder Capital Income Fund
• Wunder Capital Term Fund
• Wunder capital 5 Fund

The Wunder Capital Income Fund invests in operational solar projects that power businesses across the U.S and has the longest duration of any fund opportunity at ten years.

The Wunder Capital Term Fund loans to businesses looking to capture the effect of going solar, offers the highest potential annual returns of all funds and has a term length of 7 years.

And the Wunder Capital 5 Fund invests in large scale solar projects that power U.S. businesses, municipalities, non-profits, and community solar developments.

Invest In Solar Energy With Wunder Capital

Is Wunder Capital Right For You?

Wunder Capital may be right for you if you like the idea of investing in green energy and don’t need access to the capital you invest for at least 5 years.

Whether Wunder Capital is right for you depends on your appetite for risk, how keen your are to gain exposure to an uncorrelated asset class, and your desire to invest in green energy.

RISK: LIMITED OPERATING HISTORY

Wunder Capital was founded in 2014, so it has been operating for relatively few years compared to the length of its investment funds, especially the Wunder Income Fund that has a 10 year term length.

The company has raised approximately $4.8 million in venture funding, which may seem like a lot but given the scale of its ambitions and operations does not leave the company with very deep reserves.

As an investor, the short operating history of the company should be considered because it means the company has yet to prove the returns can be sustained over the long term.

Other companies have fallen short of their lofty ambitions to make money from the solar market, and it could be that Wunder Capital has found the magic sauce but conservative investors may wish to watch from the sidelines a little longer.

LIQUIDITY RISK

If the bulk of your assets are currently invested in the stock market, Wunder Capital offers exposure to an uncorrelated asset class which could possibly lower the volatility of your returns.

However, the risk of investing with Wunder Capital is that your money is tied up for many years. The minimum investment term length is 5 years and the maximum is 10 years so one way or another you won’t be able to touch your money once committed.

As a general rule, only invest capital you are certain you will not need for day to day living expenses.

GREEN ENERGY EXPOSURE

Few investments offer the opportunity both to make money and do good for the world but Wunder Capital Funds falls into that rare category.

While robo-advisors, such as Betterment, offer investment opportunities in socially responsible portfolios, you generally need to go hunting for quite some time to find other ways to combine social good with money-making opportunities.

So, if the idea of investing in renewable solar energy is attractive to you while making money along the way then Wunder Capital is well worth checking out.

How Wunder Capital Works

Wunder Capital sources capital from investors, manages ongoing operations, bills consumers, and oversees distributions of returns to investors.

Unlike most of its rivals, Wunder Capital automates the process of funding solar energy related companies in need of financing.

Wunder Capital relies on its own proprietary algorithms to crunch through data and make faster decisions on which deals to select.

The company claims the speed of its process compared to traditional financing avenues, such as banks, can help it to pass on savings to investors.

Wunder Capital doesn’t simply connect investor capital to companies in need of financing. It also manages ongoing operations, such as the maintenance of arrays, consumer billing, and the distribution of returns to investors.

So, from start to finish, Wunder Capital is involved in projects which means investors can be more confident that the company does not act only as a financing marketplace but has control over operations to ensure targeted returns are achieved.

Invest In Solar Energy With Wunder Capital

Wunder Capital Pros and Cons

Wunder Capital offers three investment funds that are all uncorrelated with the stock market, offer monthly cash flow potential, have low investment minimums, and promote renewable energy but investments are illiquid and only available to accredited investors.

Wunder Capital Summary

Wunder Capital offers accredited investors a rare opportunity to invest in a “solar index fund” that has the potential to produce returns that are uncorrelated with the stock market.

Before taking the plunge and investing, keep in mind that you won’t be able to withdraw your money once it has been committed. Depending on the fund you invest in, your money may be tied up for anywhere from 5 to 10 years.

If you are not sure whether the investment opportunity is a fit for your overall financial circumstances, it would be well worth consulting with a financial advisor first.

If you do decide it’s a good fit with your financial goals, matches your risk appetite and tolerance, and your capacity for risk, the opportunity to earn monthly returns and support projects that do good in the world is compelling.

Invest In Solar Energy With Wunder Capital

When Fidelity Go first launched, it was no match for Betterment. But as time has gone by, Fidelity has made its robo-advisor more attractive to investors by lowering its investment minimum and distinguishing portfolio oversight by sticking with humans as opposed to computers. But do those differences give Fidelity the edge?

In this review, we compare Betterment vs Fidelity Go across a range of key factors, like fees, account minimums, tax strategy, customer support, investment strategy, and account selection.

As you will see, the two robo-advisors compete so aggressively on fees that the real winners are clients. But the neck-and-neck race on expenses is just one important consideration. To find out who comes out on top overall, read on!

Fidelity Go vs Betterment
Features

• InvestorMint Rating

  • 1
  • 2
  • 3
  • 4
  • 5
• Standout Feature
  Best Overall
• Management fee
  0.25% – 0.40%
• Account Minimum
  Starting at $0
• Open an Account

• InvestorMint Rating

  • 1
  • 2
  • 3
  • 4
  • 5
• Standout Feature
  Investment expenses included in management fee
• Management fee
  0.35%
• Account Minimum
  $10
• Get Started Now

What Is Betterment?

Betterment is a five-star robo-advisor but it’s not without rivals.

Personal Capital, Wealthfront, and Ellevest all offer still competition on cost and services. The question is does Fidelity Go stand toe to toe with it?

We’ll get to the Fidelity Go vs Betterment comparison in just a moment. But first, let’s see how Betterment stands out.

Betterment offers two service tiers:

• Betterment Digital – a pure robo-advisor solution that manages money using computer algorithms.
• Betterment Premium – includes all the features of the Digital service as well as unlimited access to human advice.

Betterment features behavioral finance methods to support goal-setting and help clients make more rational decisions.

To ensure clients are fully invested, fractional shares are incorporated into both plans.

Beyond standard portfolio management services, clients can make charitable donations via the platform easily and automatically. And they can invest in social-driven causes to align their investments with their values.

There’s lots more too, but first let’s get a glimpse of what Fidelity Go has to offer.

What Is Fidelity Go?

Like most robo-advisors, Fidelity offers automated investment management using computer algorithms. But it also offers a few twists on the usual robo-advisor offerings.

Unlike most robo-advisors who compete on management fees but make little mention of expense ratio charges paid by clients at the fund level, Fidelity Go fees are more transparent.

It bundles management fees and expense ratios into one overall fee, which is low when compared to others.

It also separates itself from the pack by using human advisors to oversee investment decisions on customer accounts. Clients who may be hesitant to hand over full authority to a computer to manage their money may find this human aspect appealing.

Nevertheless, a glaring gap in the Fidelity robo-advisor service is the absence of a tax strategy. As we’ll see, Betterment shines brightest in this category.

 Check Out Betterment

Betterment Fees vs Fidelity Go
Fees

Betterment Total Fees

The tricky thing about comparing robo-advisor fees is that management fees alone don’t cover the full gamut of costs you pay.

A quick glance at Betterment vs Fidelity fees could lead you to conclude that Betterment is much cheaper.

But upon closer examination, the two robo-advisors charge virtually the same amounts.

Betterment Digital management fees are 0.25% which looks a whole lot less than the 0.35% charged by Fidelity for retirement accounts and 0.40% for taxable accounts.

But Fidelity Go’s fees include management fees and expense ratio costs. On the other hand, Betterment – like most robo-advisors – passes on the costs of expense ratios to clients.

The sum of Betterment Digital management fees plus the average expense ratio of 0.13% annually comes to a total cost of 0.38%.

Betterment Premium clients pay an extra 0.15% annually for a total cost of 0.53%.

Fidelity Go vs Betterment
Investment Minimums

Betterment Account Minimum

Like other top robo advisors, the entry-level Digital service has no investment minimum. However, Premium clients need to commit $100,000 to gain access to the higher tier of service.

Fidelity Go Account Minimum

Originally, a $5,000 minimum was required to get started with Fidelity Go but nowadays that threshold has reduced to just $10.

Get Started at Fidelity Go

Fidelity Go vs Betterment
Tax Strategy

Betterment Tax Strategy

To keep more money in your pocket, Betterment applies a daily tax strategy in standard accounts called tax loss harvesting.

The idea is to lower taxes on gains by selling losing positions to offset winning positions, and then to replace those losers with similar holdings that keep the underlying portfolio diversified.

To optimize for taxes across taxable and retirement accounts, tax-coordinated portfolios are used to place tax-efficient funds in taxable accounts and tax-inefficient funds in tax-advantaged retirement accounts.

Betterment claims that performance returns can increase by as much as 2.66% thanks to these tax strategies.

Fidelity Go Tax Strategy

Fidelity loses lots of points in this category. It doesn’t offer tax-loss harvesting, tax-coordinated portfolios, or tax minimization strategies – a rarity among robo-advisors.

Betterment vs Fidelity Go
Account Types

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Betterment vs Fidelity Go
Investment Strategy

Both robo-advisors aim to spread risk and build diversified portfolios that match client risk profiles and financial goals, but they do so in very different ways. Fidelity uses its own funds primarily while Betterment relies on Vanguard funds.

Fidelity Go client portfolios are mostly built using Fidelity Flex index funds that are divided across up to ten funds.

Betterment spreads money across up to 12 asset classes, primarily using low cost Vanguard ETFs.

Free rebalancing is included as part of both service offerings. The difference is it’s automatic at Betterment but manual at Fidelity Go.

Betterment vs Fidelity Go
Overall Winner

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Which Robo-Advisor Is Best:
Fidelity Go or Betterment?

When we compare Betterment vs Fidelity Go on costs and investment minimums, it is hard to separate the two robo-advisors.

A closer examination highlights that Betterment is the clear winner. It offers a comprehensive tax strategy that has the potential to boost after-tax gains. And a wealth of tools and services are included free.

Beyond portfolio rebalancing, which Fidelity supports – albeit manually – Betterment also includes retirement tools and calculators, socially responsible portfolios, and automated charitable giving.

It also offers a wider variety of account types and a larger group of asset classes.

The bottom line is unless you are an existing Fidelity client or prefer manual oversight, Betterment comes out on top.

Get Started at Fidelity Go Check Out Betterment