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Wealthfront Cash (actual user) Review & 3.5 year investment update - YouTube
Channel: Wanderer001 Reviews
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hello I am Wanderer001 and this
is my three and a half year follow-up to
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wealthfront but more importantly this is
my review and look at wealth fronts cash
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account now it's been a long time since
I've actually started on this page
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without actually being inside of my
actual wealth front account because I
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want to show you the marketing first but
then get into the actual cash account
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now I will admit I have been on the
lookout for a high-interest online
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savings account and wealthfront
just kept checking off the right boxes
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left and right I will admit there were
others that I was considering I was
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actually going to split cash between
several accounts but I'll get into the
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ideas behind that later and I'm gonna
specify this with while starting on the
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outside I did put my money where my
mouth is and I do actually have a wealth
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front cash account a lot of the reviews
that I've been seeing lately of the wealth
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front cash account are by people who
don't actually have wealth front cash
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accounts I'm going to show you returns
I'm going to talk about opening the
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account how long it took etc so to start
off we're just starting off on the main
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advertising page for wealth fronts cash
account they have a big banner thing
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here now say 2.5 1% APY now I will say
when it first launched it had 2.2 4 %
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and then in April they increase it to
two point two nine and then just jumped
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above everybody else with this 2.5 1%
giving it currently the highest interest
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with the minimum amount of money that
you can have that's the big thing there
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are other online accounts out there that
will pay you more but you have to have
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more money in 5,000 10,000 wealthfront
cash account you can start with as low
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as $1 so here you go just kind of
bringing you through the marketing here
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and here it's showing you cash account
that works as hard as you do so it's
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giving you you know here's the industry
standard so that's going to be your
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brick-and-mortar banks and then what
they are offering and we're just going
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to pop into the learn more area just so
you can see it is FDIC insured covering
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up to 1
million dollars now they do that by
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splitting your money amongst four
partner banks so wealthfront actually
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acts as kind of like a pass-through you
send them money they send your money out
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to one of these four participating banks
they do change so actually in my account
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one of the banks that I am currently
invested having my cash invested into
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was not one of the original partner
banks but everything is okay because
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those banks are FDIC insured meaning you
will not lose your money so here we go
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higher interest means more cash they're
just giving you again showing you
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projections I mean it's it's kind of all
the marketing but just kind of going
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through this so you get an idea when I
actually show you the cash account what
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might have actually brought you here
aside from this very large number and
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the nearly 25 percent above national
average and here it's telling you when
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should you hold cash rainy day fund down
pamphlet public well I'm not going to
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tell you why
you want to hold on to cash that is your
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prerogative
so here you go the big things it is FDIC
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insured up to $1,000,000 again because
it splits between for banks unlimited
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free transfers this is important because
a lot of other online banks you get six
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transfers a month now I will say that
you really shouldn't be pulling money in
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and out because then you don't get
interest and that's the point of keeping
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money somewhere is to gain interest but
the ability to know that if I wanted to
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I could transfer stuff unlimitedly no
market risk so what this means is
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obviously this is a cash account so you
might not be earning as much as you
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would if you invest it but you will not
lose your principal no fees
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now wealthfront for its investment
options does charge 0.25 percent of
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assets under management this particular
account the cash account does not do
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that fast and easy set up I will say it
was reasonably fast and easy to set up
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now being that I already had a IRA and
investment account I started on February
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28th at 6 p.m. so after hours and within
30 minutes my account was created money
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was March 1st at 9:00 a.m.
money in my wealthfront account was
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moved from my bank accounts
it was taken from my back and moved over
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to wealthfront but did not show that it
was fully invested invested quote quote
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into my wealthfront account until 4:30
p.m. so that gives you the idea of
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somebody who set up an account already
now what about somebody who was starting
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from scratch so I did have a friend who
decided to start a wealthfront cash
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account for a large sum of money that
they wanted to do something with but not
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necessarily invest and for them for
accounts set up to the money actually
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showing up in their wealthfront
cash account it took between 2.5 to 3
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business days so not terrible and here
you go
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minimum of $1.00 to open I did not start
with a dollar but knowing that that
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option is there he's great and here you
go you can kind of see how cash fits
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into your big picture so it does
integrate well into the path tool which
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is important one of the big things that
wealthfront has that's also free is the
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path tool so yes they're using the cash
account to bring people into wealthfront
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but does it really matter if you're
making 2.5 1% all right and here you go
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here is an idea of the returns that you
could see so if you have $10,000 within
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a year at 2.5 1% you can earn two
hundred fifty one dollars if you have it
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in your standard account you would only
make ten dollars now I've got a
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different scenario for you back when it
was at 2.2 4 % I had ten thousand
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dollars in a checking account which gets
0.05 percent interest so for one month
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of having ten thousand dollars in
checking account I made 46 cents now I
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did put five hundred dollars to start
off my wealthfront cash account and at
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that two point two four percent for one
month I made ninety five cents now I
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know that sounds like small amounts but
think about it ten thousand dollars got
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me forty six cents five hundred dollars
got me ninety five cents and that was at
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the lower interest alright so here
inside of my wealthfront account the
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actual well front cash area is at the
bottom with other cash accounts now I'm
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not going to show you that because
at least rolling down to it because
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there's a lot of blurring that I would
have to do and I really don't want to
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have to do that so what I'm going to do
it scroll down to it and then show you
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what it looks like from the inside so
one of the things I do like in the cash
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account area even on the main screen is
it will always show you your current
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percentage now the percentage can go up
which it has several times but it can
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also go down so just like any other bank
account the interest rate is based on
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what the Federal Reserve is doing now
right now wealthfront has only gone up
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but in the past there have been other
online accounts that started lower and
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worked their way up and I have a feeling
we'll dip back down something like
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Marcus from golden Sachs which is one of
the other ones I was looking at a lot of
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the reviews when I was originally
looking was showing like 1.75 percent
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and then they've raised it to the
current 2.25 percent so this is variable
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just keep that in mind but you are doing
this to preserve your principle you are
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not doing this to make buku bucks over
here you can see it has the year-to-date
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so this tells you just how much money
you've actually made so we're gonna
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click down here to view more so that you
can see the entirety of what I've been
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doing so $500 deposit here's my interest
of 95 cents here is interest of 92 cents
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now this is calculated daily so shorter
months means less interest so here we go
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interest of 98 cents here is me testing
out withdrawal so you can actually
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withdrawal as low as a single dollar now
I did this because in the investment
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accounts you can't withdraw a single
dollar you have a much higher minimum so
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seeing that you could withdraw one
dollar was very good now you may be
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asking yourself how long does this money
take to show up in your actual bank
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account because you do need a bank
account in order to attach it to your
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wealthfront cash account well I executed
or started the request to remove this
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dollar at 10 a.m. on 6/10 and it took
about one to three business
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so as of 6:11 funds showed that they
were out of my wealth front cash account
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and transferring to my home bank account
funds were fully placed into my home
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bank account by the end of day on six
eleven now that was just for me your
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experiences may vary but figure one to
three business day now the original idea
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for me was to place my freelance money
into this account and I still will be
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doing that I've just kind of ran into
moving now I do realize that a wealth a
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cash account isn't the most glamorous
thing it's a savings account but
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everybody should have some sort of
savings account so why have a low
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interest savings account when you can
have something that will give you much
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much more now I did neglect you can have
repeating deposits I currently don't
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have that because again freelance work
is not steady work so I do not have a
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specific amount that will go in every
month but I will move that money over
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you can see all transactions and you can
manage your bank accounts now if you use
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the other wealthfront products you can
actually pick a bank account that you
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don't actually pull money from so in my
case I have a checking and a savings
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account I pull my money for my
wealthfront investment accounts and this
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account from my checking but they do
know my savings and it's at the same
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bank so it knows the routing number
which means I could pull money directly
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from my savings and place it into my
well front cash account if I wanted to
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now one of the things that was a little
strange for me and that's because I have
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those other accounts in well front is
that you do have to set up a specific
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beneficiary so I'm thinking because it's
the cash account it's not actually a
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beneficiary it's a transfer on death
benefit which is why you had to set it
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up separately for this style of account
now the wealthfront cash account is not
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without its shortcomings because it's a
fintech it is constantly growing and
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evolving and a lot of those other
reviews that I saw again people who
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don't actually have accounts and some of
the things that they're
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quipping about wealthfront is obviously
considered doing so let me quickly run
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through what wealthfront in no
particular order and in their own words
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is considering for the future including
debit cards ATM access direct deposit
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bill pay checks mobile checking deposits
a lot of that are things at your
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standard brick and mortar bank and it
again fine tech it's growing some of
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those options for me personally I don't
care about I'm looking for just a
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dumping ground for my money I don't want
to have access to it for an ATM or a
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check or a debit card I want this to sit
here and grow I don't want to use this
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other people I can see you might want to
have access to that direct deposit I
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will admit I wish it would allow me to
do that but then again I'm just moving
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cash from a client's check from my main
bank account into this so not terrible
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for me so touching back on some of those
other cons from other videos is the the
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rate fluctuation so this annual percent
rate yeah it's really good now and
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they've increased it twice so far but it
won't always be this this is based on
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the Fed is that a problem yes and no me
personally guess what just because you
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have your money in a brick-and-mortar
doesn't mean that their rate doesn't
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change either so these will change in
kind but they'll always be better than
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your brick-and-mortar the one big
argument that I saw made by some other
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youtuber was that you cannot transfer
funds between your cash account and your
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wealthfront investment accounts now I
will admit this does seem like a very
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large oversight by wealthfront and I'm
sure they do watch videos about
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themselves that they will see this and
go yes this is probably something that
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we're currently working on but I do feel
that maybe maybe before they came out
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with a cash account they should have
placed they should have had the ability
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to move your funds from the cash account
into your investment accounts also that
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excess cash that sits in your investment
account wealthfront I'm talking to you
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make it so that you can put it into your
savings account so you can earn a little
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money off of it instead of having it sit
in the investment accounts not doing
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anything just saying wish it would
do that alright so with that said this
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has been the portion of the video
dedicated to the wealth front cash
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account do I think you should do it yes
everybody should have a high yield
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savings account
I've waited far too long to do it I am
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jumping on the bandwagon I will actually
open up a separate account so I'll have
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one for my side jobs and then one for my
actual cash and then keep my brick and
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mortar minimally funded so that you know
I can pay bills quickly if needed but
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also have access to some things that the
brick and mortar does but I want this
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high-yield rate so if you are leery of
wealthfront I can assure you I have been
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using them for three and a half years
for the investment side I've been using
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this since it was publicly available and
have had no problems so with that being
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the end of the cash account we're gonna
talk about the investment side of things
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and give a quick run-through of how my
accounts have been doing as well as new
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things that wealthfront
has added to their investment side and
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one of the first things that wealthfront
has added to the investment side is this
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here it is a new path tool which is
expecting a large expense so in my case
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as I mentioned earlier I'm looking to
purchase a home and all things going
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well hopefully that will be next month
and I will be purchasing said home for
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that much and what the path tool will
say is projected impact is showing you
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retirement this expense is going to
decrease my net worth in retirement by
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$300,000 paying for it this expense will
deplete my savings and require fifteen
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thousand dollars from my retirement
account and why is that well if we hit
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done you'll notice that up here at my
net worth is only two hundred and thirty
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six thousand that's partially because of
money that I have from my condo sale is
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in here but you can see well now in the
retirement is still manageable and we
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have this new path event which is two
hundred thousand in December and again I
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did that when I was practicing too and I
forgot to come in here and say July you
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have to indicate done next to it to lock
it and then we
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done when we come down to our retirement
you can see well now it says I will need
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1.9 I will only have 1.6 but we can come
in here and edit because I'm not
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actually spending $200,000 upfront I am
only doing a downpayment of 50,000 so
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doing that you can see here's my event
it doesn't change my pathway tool all
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that much and I am still comfortable for
retirement which is great now we're just
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gonna delete this one out of here we're
gonna say delete and then the path tool
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corrects itself I do like the path tool
and I'm happy that they made it
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available to everybody for free the
other change which is a little harder to
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actually see is with investment accounts
with investment accounts now to borrow
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against your own money they have lowered
the amount that you actually need to
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have inside of your investment account to
25 thousand as opposed to what it was
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previously still not there yet again
taking donations if anybody wants to see
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how that Tool Works but then lowering
the threshold to entry I do appreciate
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so let's talk about returns and I'm
gonna start with the investment account
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down here so looking at 2019 you can see
it has been a slightly turbulent year
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you can see just in 2019 I have tax loss
harvesting 57 dollars and 18 cents but
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we're gonna check our all-time and then
talk about returns so last time we
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talked our money weighted return because
2018 was really bad was 3.8 percent you
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can see currently we are sitting at
seventeen point six two percent so good
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on it it's gone up and if we change that
to our time weighted previously it was
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thirteen point seven four percent and we
are currently sitting at 21 point seven
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five so this has gone up quite a bit
thankfully again I did hit a point break
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here back in 2018 where the investment
account like back in December was below
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my actual money contributed coming back
and we come down to art in our IRA
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account can see our contribution limits
our contribution max and current
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contribution for the year so money
weighted last year
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granted total time not just for last
year but the last time we did this we
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were looking at seventeen point eight
three you can see we are currently at
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thirty six point eight two and changing
that to our time waited we were at
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thirty-one point zero eight and now we
are at forty three point seven six now I
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will say that these returns are based on
the time that I have been using
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wealthfront
my Roth IRA is set for a risk tolerance
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of six point five and my investment
account is set for seven point zero keep
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in mind because you're using index funds
this is for the long haul this isn't
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meant to get in and out of the market
there are other options for that if
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you're looking to do something like that
or if you're looking to invest in
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individual stocks wealthfront might not
be the right choice for you but they do
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have something like M1 finance
which is something I put my wife in - I
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like the hands-off approach that
wealthfront
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offers so here's the thing and this is
where you can either check out or listen
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to the little sales pitch at the end for
the wealthfront cash account there are
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no fees but for the investment side
there are but there's nothing saying
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that you might not want to transfer
after you get yourself a safety net set
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up with the cash account into an
investment account so if you're looking
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to have some of your assets managed for
free meaning $5,000 managed for free
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there will be a referral link in the
description area below and $5,000
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managed for free is pretty good
especially after you get that safety net
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and you're looking to kind of start to
increase your wealth so I have been
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Wanderer001 this has been a look
at the one wealthfront cash account and
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two investment account and IRA after
three and a half years of usage if you
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have any questions or comments please
leave them in the area below and as
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always thanks for watching
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