Tarang Patel's guest appearances

Tarang Patel

The Freedom Formula for Physicians | How Doctors Cut Debt & Slash Taxes |  Business Of Medicine | Financial Education

Doctor Money Matters

BackTable Vascular & Interventional

Money Checkup with Anjali Jariwala

Peter Kim

Nisha Mehta

Ike Devji

Travis Hornsby

Farnoosh Torabi

Jason Shah

Lauryn Williams

Scott Frank

Carl Richards

Nii Darko

David Anderson

Ben White

Kevin Pho

Sarah Fallaw

David Draghinas

OwlTail

In this episode, host Dr. Aparna Baheti interviews Dr. Tarang Patel, diagnostic radiologist and creator of the Doctor Money Matters Podcast, about private equity in radiology, from why to get in to how to get out.---CHECK OUT OUR SPONSORRADPAD® Radiation Protectionhttps://www.radpad.com/---SHOW NOTESAfter getting out of the air force, Dr. Patel didn’t know what to do with the significant salary increase he was given. He had a lot of questions and wanted to learn how to manage his finances as a physician. In 2015, he created a website, which soon developed into a podcast. In doing this, his goal was to speak with guests who were experts in aspects of physician finance so that he could learn. He was also interested in disseminating the information with others, because he knew many physicians had similar questions about finance.Next, we discuss the private equity (PE) landscape, specifically in Phoenix, where Dr. Patel practices. He is a hospital employee and has never been part of a PE owned practice, but knows many in Phoenix who went through the Rad Partners buyout there. He explains the evolution of the Rad Partners deal. There were three dominant radiology groups that employed over 100 radiologists. They were approached by Rad Partners and decided to sell and become one large group. This resulted in one dominant radiology group in all of Phoenix. These physicians were all locked into a 5 year contract, which ended in late 2022. At this time, there was a mass exodus of radiologists from this group due to their dissatisfaction with the way the practice was run or how their contracts ended up playing out. Dr. Patel explains how they were able to attract so many people by incentivizing the deal with a heavy cash to share ratio. This gave providers a sense of a guarantee, which a higher share buyout would not have provided. This is because the PE company ascribes value to the shares, and it is unknown at onset whether they will financially profit in the long run.Dr. Patel further explains that joining a PE owned practice is generally a bad deal for young radiologists, because they are offered lower salaries and don’t get any buyout. This has resulted in PE companies failing to hire young doctors. Additionally, many older doctors near retirement use a PE deal as a way to get a large cash payout, work for a few more years, and retire. Dr. Patel believes that due to hiring difficulties and the high debt burden of many PE companies, they will start to close practices, which will open up the market for new practice models. He believes the radiology landscape will be vastly different in 5 years than it is now. Dr. Patel ends by saying you should never trust an offer that advertises low risk and high return. Additionally, for young radiologists looking for jobs out of training, he urges you not to follow the highest offer, but rather find the practice you enjoy going to work at everyday, even if the pay is lower. In the end, you will make the money, and it is worth enjoying your job and your colleagues.---RESOURCESEp. 287 OBL/ASC Reimbursement Update January 2023https://www.backtable.com/shows/vi/podcasts/287/obl-asc-reimbursement-update-jan-2023

In this episode, host Dr. Aparna Baheti interviews Dr. Tarang Patel, diagnostic radiologist and creator of the Doctor Money Matters Podcast, about private equity in radiology, from why to get in to how to get out. --- CHECK OUT OUR SPONSOR RADPAD® Radiation Protection<a href="https://www.radpad.com/" rel="nofollow" target="_blank">https://www.radpad.com/</a> --- SHOW NOTES After getting out of the air force, Dr. Patel didn’t know what to do with the significant salary increase he was given. He had a lot of questions and wanted to learn how to manage his finances as a physician. In 2015, he created a website, which soon developed into a podcast. In doing this, his goal was to speak with guests who were experts in aspects of physician finance so that he could learn. He was also interested in disseminating the information with others, because he knew many physicians had similar questions about finance. Next, we discuss the private equity (PE) landscape, specifically in Phoenix, where Dr. Patel practices. He is a hospital employee and has never been part of a PE owned practice, but knows many in Phoenix who went through the Rad Partners buyout there. He explains the evolution of the Rad Partners deal. There were three dominant radiology groups that employed over 100 radiologists. They were approached by Rad Partners and decided to sell and become one large group. This resulted in one dominant radiology group in all of Phoenix. These physicians were all locked into a 5 year contract, which ended in late 2022. At this time, there was a mass exodus of radiologists from this group due to their dissatisfaction with the way the practice was run or how their contracts ended up playing out. Dr. Patel explains how they were able to attract so many people by incentivizing the deal with a heavy cash to share ratio. This gave providers a sense of a guarantee, which a higher share buyout would not have provided. This is because the PE company ascribes value to the shares, and it is unknown at onset whether they will financially profit in the long run. Dr. Patel further explains that joining a PE owned practice is generally a bad deal for young radiologists, because they are offered lower salaries and don’t get any buyout. This has resulted in PE companies failing to hire young doctors. Additionally, many older doctors near retirement use a PE deal as a way to get a large cash payout, work for a few more years, and retire. Dr. Patel believes that due to hiring difficulties and the high debt burden of many PE companies, they will start to close practices, which will open up the market for new practice models. He believes the radiology landscape will be vastly different in 5 years than it is now. Dr. Patel ends by saying you should never trust an offer that advertises low risk and high return. Additionally, for young radiologists looking for jobs out of training, he urges you not to follow the highest offer, but rather find the practice you enjoy going to work at everyday, even if the pay is lower. In the end, you will make the money, and it is worth enjoying your job and your colleagues. --- RESOURCES Ep. 287 OBL/ASC Reimbursement Update January 2023<a href="https://www.backtable.com/shows/vi/podcasts/287/obl-asc-reimbursement-update-jan-2023" rel="nofollow" target="_blank">https://www.backtable.com/shows/vi/podcasts/287/obl-asc-reimbursement-update-jan-2023</a>

Ep. 309 Physician Finances and Perspectives on Private Equity with Dr. Tarang Patel

It doesn’t matter how much or how little a person makes; finances can be a challenge for all of us. In today’s Money Checkup, I chat with Tarang Patel about how even physicians struggle with finances. Coming right out of medical school or residency, physicians are faced with large amounts of student loan debt and many don’t have the opportunity to start contributing to an employer sponsored retirement plan until they are in their mid-thirties. We discuss these issues and others that our physicians are facing with their finances to try and provide some suggestions and insight as to when and how they should be getting a handle on their finances. Tarang is a radiologist and host of the Doctor Money Matters podcast where he provides a place for physicians, dentists, and other health physicians to discuss financial topics they are faced with today.  What We Will Cover  Tarang’s background and where his interest in finance stemmed from Tarang’s reason for launching his podcast Doctor Money Matters How Tarang’s views on money were shaped How to instill good money values with your kids Financial mistakes many physicians tend to make Why physicians continue to make the same mistakes as previous generations How “keeping up with the Joneses” can hurt even physicians Financial traps physicians can fall into after finishing up medical school or residency The best time for physicians to link up with a financial planner Why maxing out a 401K isn’t enough for retirement The importance of living below your means (and avoiding lifestyle creep) If you haven’t started investing in a taxable account, why you should start today! The reason physicians are poor wealth accumulators despite the high income The importance of looking at the whole picture when examining a job offer Why you should look at establishing a financial plan NOW The significance of taking care of your financial health (just like you would your medical health)  A Financial Goal in the Works  Try to diversify away from the stock market  One Piece of Financial Advice  Get the right type of insurance as early as you can. Invest in yourself and your own financial knowledge.  Getting Connected With Tarang  Tarang’s Website Twitter Facebook Instagram  Link’s Mentioned   The Millionaire Next Door Bogleheads Blog White Coat Investor Physician on Fire  Click here if you want to read the transcript instead!  Physicians and Money with Tarang Patel (Dr. Money Matters)

It doesn’t matter how much or how little a person makes; finances can be a challenge for all of us. In today’s Money Checkup, I chat with Tarang Patel about how even physicians struggle with finances. Coming right out of medical school or residency, physicians are faced with large amounts of student loan debt and many don’t have the opportunity to start contributing to an employer sponsored retirement plan until they are in their mid-thirties. We discuss these issues and others that our physicians are facing with their finances to try and provide some suggestions and insight as to when and how they should be getting a handle on their finances. Tarang is a radiologist and host of the Doctor Money Matters podcast where he provides a place for physicians, dentists, and other health physicians to discuss financial topics they are faced with today.  What We Will Cover <ul> <li>Tarang’s background and where his interest in finance stemmed from</li> <li>Tarang’s reason for launching his podcast <a href="https://www.doctormoneymatters.com/" rel="nofollow" target="_blank">Doctor Money Matters</a></li> <li>How Tarang’s views on money were shaped</li> <li>How to instill good money values with your kids</li> <li>Financial mistakes many physicians tend to make</li> <li>Why physicians continue to make the same mistakes as previous generations</li> <li>How “keeping up with the Joneses” can hurt even physicians</li> <li>Financial traps physicians can fall into after finishing up medical school or residency</li> <li>The best time for physicians to link up with a financial planner</li> <li>Why maxing out a 401K isn’t enough for retirement</li> <li>The importance of living below your means (and avoiding lifestyle creep)</li> <li>If you haven’t started investing in a taxable account, why you should start today!</li> <li>The reason physicians are poor wealth accumulators despite the high income</li> <li>The importance of looking at the whole picture when examining a job offer</li> <li>Why you should look at establishing a financial plan NOW</li> <li>The significance of taking care of your financial health (just like you would your medical health)</li> </ul> A Financial Goal in the Works <ul> <li>Try to diversify away from the stock market</li> </ul> One Piece of Financial Advice <ul> <li>Get the right type of insurance as early as you can.</li> <li>Invest in yourself and your own financial knowledge.</li> </ul> Getting Connected With Tarang <ul> <li><a href="http://www.doctormoneymatters.com" rel="nofollow" target="_blank">Tarang’s Website</a></li> <li><a href="https://twitter.com/drmoneymatters" rel="nofollow" target="_blank">Twitter</a></li> <li><a href="https://www.facebook.com/groups/doctormoneymatters" rel="nofollow" target="_blank">Facebook</a></li> <li><a href="https://www.instagram.com/doctormoneymatters/" rel="nofollow" target="_blank">Instagram</a></li> </ul> Link’s Mentioned <ul> <li><a href="https://www.amazon.com/Millionaire-Next-Door-Surprising-Americas/dp/1589795474" rel="nofollow" target="_blank"> The Millionaire Next Door</a></li> <li><a href="https://www.bogleheads.org/blog/" rel="nofollow" target="_blank">Bogleheads</a> Blog</li> <li><a href="https://www.whitecoatinvestor.com/" rel="nofollow" target="_blank">White Coat Investor</a></li> <li><a href="https://www.physicianonfire.com/" rel="nofollow" target="_blank">Physician on Fire</a></li> </ul> Click here if you want to read the transcript instead! <a href="https://fitadvisors.com/wp-content/uploads/2019/03/7.-Physicians-and-Money-with-Tarang-Patel-Dr.-Money-Matters.pdf" rel="nofollow" target="_blank"> Physicians and Money with Tarang Patel (Dr. Money Matters)</a>

Physicians and Money with Tarang Patel (Dr. Money Matters)

This is my first solo episode. I talk about roboadvisors and the pros and cons of using them. I also review some of the larger and most popular companies providing this service. What is a robo-advisor? It is a computer algorithm based approach to managing your investments. (Note this generally applies to your stock market accounts) A robo advisor is designed to eliminate the need for an individual to make trading decisions about the stocks or ETFs in an account.  This is not the same as Wall Street computer-based trading which can be millions of trades in a day. Rather, this is designed to simulate a financial advisor in optimizing asset allocation and rebalancing a portfolio when necessary to achieve diversification and some of them are supposed to do tax loss harvesting to reduce the capital gains and possibly reduce some of your income tax as well. These are not generally designed to replace the other aspects of a financial advisor such as goal planning, advice about insurance, tax advice, etc. So what are the pros and cons of a robo advisor while one benefit is there extremely low cost compared to the average financial advisor most financial advisers range from .75 to 1.25% of your assets under management. Now, there a is a trend of financial advisors going to fixed cost management such as a fixed fee whether you have $100,000 or $2,000,000 under management but those are still the exception rather than the rule.  These advisors are still more expensive than Robo advisors but as noted above, they provide you with a more broad array of advice. If you do end up choosing a human financial advisor make sure you pick a fee-only advisor or a flat cost advisor who holds the CFP designation and is a Fiduciary. Now getting back to Robo advisors, some of the pros include low cost. The majority range from  free to 0.35% of assets under management, though a few are slightly higher and I'll talk about those when I discuss the individual ones. The majority of the robo advisors don't trade individual stocks, rather they use a portfolio of ETFs to give you a wide diversification. In my opinion however, you can generally achieve this diversification with only a few individual ETFs. The second Pro of these Robo advisors is they eliminate this work for you you can just put your money in and basically let the computer do its thing and you don't have to worry about anything else other than when you end up needing the money.  In my opinion however this is probably not the best way to approach any advisor whether it's a robo advisor or human advisor after all this is your money you're putting in if you just put it in and basically ignore what's happening you are at risk for any number of issues. Always pay attention. It doesn't mean you have to make the individual trades or decisions but just know what's going on and that could be as simple as looking at your statements every quarter so that you're just aware of what's happening. You may not have any issues and that's the ideal scenario . The next benefit of Robo advisors and probably the one that is talked about the most is the tax-loss harvesting. Some of these advisors claim that by optimizing tax-loss harvesting you will improve your returns. If done properly it should override the cost of the majority of these Robo advisors by a significant amount. What is tax-loss harvesting? Tax loss harvesting is where the government allows you to reduce your capital gains and your income tax by subtracting any losses you've had from your investments from any games you've add so for example let's say you own an ETF which covered the S&amp;P 500 and that ETF you've had it for 5 years and the S&amp;P has done relatively well over the last five years has gained $5,000 so you had a $10,000 investment and it's $15,000 now I'm not sure if those are the exact numbers but let's just use that so if you had another ETF let's say was an international ETF and for whatever reason that ETF did poorly and you lost $4,000 Your gain of $5,000 is subject to taxes if you only sold the position where you had a game but you also have this International ETF where you lost $4,000 so if you take the two together and your Net gain is only $1,000 and you only owe taxes on that thousand dollars. now let's say instead of a gain of $5,000 you only had a gain of $2,000 and you had the same $4,000 loss on the international ETF well in that case your net loss is $2,000 and that can be used against your ordinary income which for most positions is taxed at a higher rate than long-term capital gains so that tax loss of $2,000 is actually worth more to you because it can reduce your income of let's say $250,000 to now $248,000 and that's what you can text on which can be a savings of a few hundred dollars on your taxes.  So why does a robo advisor do this better than humans and what ends up happening is that most years  unless you need to sell the underlying security you don't want to take anything with a game particularly in a taxable account because you basically reduced your Net game because you have to pay the rest in text so you're better off holding games for as long as you can but of course within reason because at some point you will have to take the money out when you need it but none like you should be taking every year use them to reduce your regular income as much as possible now as a loss Okay so that is tax-loss harvesting and if done properly it can help boost your returns. The promise of Robo advisors is that they'll do this for you so you don't have to think about it at a fraction of the cost of a human advisor. So what are some of the cons of picking Robo advisors well one is the cost like I said it's not free for the most part there are a few that are for me but they tend to have a little bit more limited services. the next is and I don't know that this is particularly on it's just that you could probably do this yourself without spending that much time and get almost similar results. Now  in my opinion most of the time you're probably better off simplifying your accounts as much as possible and doing the stuff that you do need to do on your own just so that you are aware of your finances and no one for lack of a better term screw with you. Who are some of the companies that have these Robo-advisory services The most famous ones and probably some of the earliest ones are betterment and wealthfront other companies include wisebanyan and then some of the larger discount brokerages now offer these services such as Vanguard Schwab fidelity. some of the traditional Wall Street firms such as Merrill Lynch and Morgan Stanley also offer these but I don't have enough information about reviewing them. So let's talk about the individual companies now Betterment  0.25% fees. (0.4-0.5% if you want access to a human CFP, only available on portfolios over $100k Fees not charged for any assets over $2mil Uses low cost Vanguard and iShares ETFs (No trading costs, but the ETFs have their own fees (low cost but are not included in the above management fee) Claim to generate an extra 2.66% in annualized return over 20 years on a $100k portfolio based on  Passive investing Tax harvesting Better behavior   In my opinion, I would only count the extra (0.4%) for tax loss harvesting as a true gain, because the other 2.2% can be achieved by anyone who uses index funds or ETFs and does a buy and hold philosophy  Wealthfront  0.25% fees Claim up to 2.05% increase in returns due similar factors as Betterment Unique feature called direct indexing (instead of using ETFs, if you have &gt;100k in your account they buy a portfolio of individual securities to improve tax loss harvesting opportunities (Basket of 1000 stocks which always has some losers so you should have more likelihood of being able to take losses against income vs ETF which is the average of all these stocks so if market is up you can’t take a loss even though some stocks are likely down) Link to the methodology on my website. If you do use this feature or even with ETFs you have to make sure that you don’t make any transactions in accounts not managed by the robo-advisor which may conflict with IRS Wash Sale rule A wash sale is the sale at a loss and purchase of the same security or substantially similar security within 30 days of each other. If a wash sale transaction occurs, the IRS may disallow or defer the loss for current tax reporting purposes. More specifically, the wash sale period for any sale at a loss consists of 61 calendar days: the day of the sale, the 30 days before the sale, and the 30 days after the sale. The wash sale rule postpones losses on a sale, if replacement shares are bought around the same time. Features  Passive Plus (Basic robo-advisor service similar to others) Direct Indexing (Kicks in for free once assets &gt; $100k) Advanced Indexing (Alternative weighting to traditional market cap ETFs) Kicks in for free once assets &gt; $500k Link to explanation about advanced indexing.   Uses Low cost ETFs (Avg fee is 0.12% so net fee is around (0.37%)  Vanguard Personal Advisor Services  Hybrid model with Human and robo advisor Need $50k to invest. Fee 0.3% plus ETF costs They give you a dedicated advisor if &gt;$500k managed Mostly vanguard products but can use others (you may incur transaction costs but likely minimal Not quite as much automated tax loss harvesting  Wise Banyan  No management fee at all for basic account No trading fees Low cost ETFs (ave .12%) Only for individual taxable accounts or IRAs (No joint accounts with spouse or kids trust accounts) Tax loss Harvesting is extra (0.25% up to $96k. No additional cost after that)  Schwab Intelligent portfolios  No management Fee Account Minimum $5000 Variety of portfolios (including conservative moderate and aggressive) Pro or con is they maintain a cash position which can be a drag on return (they can also make money by loaning out this cash) Tax loss harvesting available if portfolio &gt; $50k  SoFi Wealth Management  0.25% fee (First 10k free and no management fee if you are existing SoFi loan customer No tax loss harvesting Low account min ($500)  Personal Capital  High cost (0.89% up to $1 mil) reduces incrementally downward at higher levels Great App to track investments (free but they will call you occasionally to try to get business) Minimum investment amount $100k  Fidelity Go  0.35% fee ETF only (Fidelity or BlackRock iShares) No tax loss harvesting $5k minimum  DIY (Do it yourself)  First don’t bother in a retirement account. (No need to TLH) If you don’t have much interest, use a target date fund. Alternatively use a 2 or 3 fund portfolio of a US Total stock, Total International Stock, and Total Bond fund. If you are far from retirement you can eliminate the Bond Fund. Here is a link to  simple portfolios that you can use from bogleheads.org. Most retirement plan providers have some index funds in them and it will save you thousands of dollars over the long run if you take the time to find them when you first start In a taxable account, there are a few simple options. Again you can use a target date fund to keep it really simple, or you can use the multi fund portfolios. In a taxable account, it may make more sense to use a few more funds/ETFs so that you have the ability to TLH.  I personally do the DIY, but I am not sure it is the best over the long term. At the time of this podcast recording, I have no robo advisors, but I do have accounts with some of the companies mentioned. I do not currently receive any advertising from these companies. In my general opinion, the best options seem to be Wise Banyan for those who are just starting out, and Wealthfront for those with more assets to invest. I'm sure the other companies are fine also. Remember I am not a financial advisor, rather a DIY investor. Please do your own due diligence before investing with any of these companies.

This is my first solo episode. I talk about roboadvisors and the pros and cons of using them. I also review some of the larger and most popular companies providing this service. What is a robo-advisor? It is a computer algorithm based approach to managing your investments. (Note this generally applies to your stock market accounts) A robo advisor is designed to eliminate the need for an individual to make trading decisions about the stocks or ETFs in an account.  This is not the same as Wall Street computer-based trading which can be millions of trades in a day. Rather, this is designed to simulate a financial advisor in optimizing asset allocation and rebalancing a portfolio when necessary to achieve diversification and some of them are supposed to do tax loss harvesting to reduce the capital gains and possibly reduce some of your income tax as well. These are not generally designed to replace the other aspects of a financial advisor such as goal planning, advice about insurance, tax advice, etc. So what are the pros and cons of a robo advisor while one benefit is there extremely low cost compared to the average financial advisor most financial advisers range from .75 to 1.25% of your assets under management. Now, there a is a trend of financial advisors going to fixed cost management such as a fixed fee whether you have $100,000 or $2,000,000 under management but those are still the exception rather than the rule.  These advisors are still more expensive than Robo advisors but as noted above, they provide you with a more broad array of advice. If you do end up choosing a human financial advisor make sure you pick a fee-only advisor or a flat cost advisor who holds the CFP designation and is a Fiduciary. Now getting back to Robo advisors, some of the pros include low cost. The majority range from  free to 0.35% of assets under management, though a few are slightly higher and I'll talk about those when I discuss the individual ones. The majority of the robo advisors don't trade individual stocks, rather they use a portfolio of ETFs to give you a wide diversification. In my opinion however, you can generally achieve this diversification with only a few individual ETFs. The second Pro of these Robo advisors is they eliminate this work for you you can just put your money in and basically let the computer do its thing and you don't have to worry about anything else other than when you end up needing the money.  In my opinion however this is probably not the best way to approach any advisor whether it's a robo advisor or human advisor after all this is your money you're putting in if you just put it in and basically ignore what's happening you are at risk for any number of issues. Always pay attention. It doesn't mean you have to make the individual trades or decisions but just know what's going on and that could be as simple as looking at your statements every quarter so that you're just aware of what's happening. You may not have any issues and that's the ideal scenario . The next benefit of Robo advisors and probably the one that is talked about the most is the tax-loss harvesting. Some of these advisors claim that by optimizing tax-loss harvesting you will improve your returns. If done properly it should override the cost of the majority of these Robo advisors by a significant amount. What is tax-loss harvesting? Tax loss harvesting is where the government allows you to reduce your capital gains and your income tax by subtracting any losses you've had from your investments from any games you've add so for example let's say you own an ETF which covered the S&amp;P 500 and that ETF you've had it for 5 years and the S&amp;P has done relatively well over the last five years has gained $5,000 so you had a $10,000 investment and it's $15,000 now I'm not sure if those are the exact numbers but let's just use that so if you had another ETF let's say was an international ETF and for whatever reason that ETF did poorly and you lost $4,000 Your gain of $5,000 is subject to taxes if you only sold the position where you had a game but you also have this International ETF where you lost $4,000 so if you take the two together and your Net gain is only $1,000 and you only owe taxes on that thousand dollars. now let's say instead of a gain of $5,000 you only had a gain of $2,000 and you had the same $4,000 loss on the international ETF well in that case your net loss is $2,000 and that can be used against your ordinary income which for most positions is taxed at a higher rate than long-term capital gains so that tax loss of $2,000 is actually worth more to you because it can reduce your income of let's say $250,000 to now $248,000 and that's what you can text on which can be a savings of a few hundred dollars on your taxes.  So why does a robo advisor do this better than humans and what ends up happening is that most years  unless you need to sell the underlying security you don't want to take anything with a game particularly in a taxable account because you basically reduced your Net game because you have to pay the rest in text so you're better off holding games for as long as you can but of course within reason because at some point you will have to take the money out when you need it but none like you should be taking every year use them to reduce your regular income as much as possible now as a loss Okay so that is tax-loss harvesting and if done properly it can help boost your returns. The promise of Robo advisors is that they'll do this for you so you don't have to think about it at a fraction of the cost of a human advisor. So what are some of the cons of picking Robo advisors well one is the cost like I said it's not free for the most part there are a few that are for me but they tend to have a little bit more limited services. the next is and I don't know that this is particularly on it's just that you could probably do this yourself without spending that much time and get almost similar results. Now  in my opinion most of the time you're probably better off simplifying your accounts as much as possible and doing the stuff that you do need to do on your own just so that you are aware of your finances and no one for lack of a better term screw with you. Who are some of the companies that have these Robo-advisory services The most famous ones and probably some of the earliest ones are betterment and wealthfront other companies include wisebanyan and then some of the larger discount brokerages now offer these services such as Vanguard Schwab fidelity. some of the traditional Wall Street firms such as Merrill Lynch and Morgan Stanley also offer these but I don't have enough information about reviewing them. So let's talk about the individual companies now <a href="https://www.betterment.com/" rel="nofollow" target="_blank">Betterment</a> <ol> <li>0.25% fees. (0.4-0.5% if you want access to a human CFP, only available on portfolios over $100k Fees not charged for any assets over $2mil</li> <li>Uses low cost Vanguard and iShares ETFs (No trading costs, but the ETFs have their own fees (low cost but are not included in the above management fee)</li> <li>Claim to generate an extra 2.66% in annualized return over 20 years on a $100k portfolio based on <ol> <li>Passive investing</li> <li>Tax harvesting</li> <li>Better behavior</li> </ol> </li> <li>In my opinion, I would only count the extra (0.4%) for tax loss harvesting as a true gain, because the other 2.2% can be achieved by anyone who uses index funds or ETFs and does a buy and hold philosophy</li> </ol> <a href="https://www.wealthfront.com/" rel="nofollow" target="_blank">Wealthfront</a> <ol> <li>0.25% fees</li> <li>Claim up to 2.05% increase in returns due similar factors as Betterment</li> <li>Unique feature called direct indexing (instead of using ETFs, if you have &gt;100k in your account they buy a portfolio of individual securities to improve tax loss harvesting opportunities (Basket of 1000 stocks which always has some losers so you should have more likelihood of being able to take losses against income vs ETF which is the average of all these stocks so if market is up you can’t take a loss even though some stocks are likely down) <a href="https://support.wealthfront.com/hc/en-us/articles/211005023" rel="nofollow" target="_blank">Link to the methodology</a> on my website. If you do use this feature or even with ETFs you have to make sure that you don’t make any transactions in accounts not managed by the robo-advisor which may conflict with IRS Wash Sale rule A wash sale is the sale at a loss and purchase of the same security or substantially similar security within 30 days of each other. If a wash sale transaction occurs, the IRS may disallow or defer the loss for current tax reporting purposes. More specifically, the wash sale period for any sale at a loss consists of 61 calendar days: the day of the sale, the 30 days before the sale, and the 30 days after the sale. The wash sale rule postpones losses on a sale, if replacement shares are bought around the same time.</li> <li>Features <ol> <li>Passive Plus (Basic robo-advisor service similar to others)</li> <li>Direct Indexing (Kicks in for free once assets &gt; $100k)</li> <li>Advanced Indexing (Alternative weighting to traditional market cap ETFs) Kicks in for free once assets &gt; $500k <a href="https://support.wealthfront.com/hc/en-us/articles/115002707243" rel="nofollow" target="_blank">Link to explanation about advanced indexing</a>.</li> </ol> </li> <li>Uses Low cost ETFs (Avg fee is 0.12% so net fee is around (0.37%)</li> </ol> <a href="https://investor.vanguard.com/advice/personal-advisor?lang=en" rel="nofollow" target="_blank">Vanguard Personal Advisor Services</a> <ol> <li>Hybrid model with Human and robo advisor</li> <li>Need $50k to invest.</li> <li>Fee 0.3% plus ETF costs</li> <li>They give you a dedicated advisor if &gt;$500k managed</li> <li>Mostly vanguard products but can use others (you may incur transaction costs but likely minimal</li> <li>Not quite as much automated tax loss harvesting</li> </ol> <a href="https://wisebanyan.com/" rel="nofollow" target="_blank">Wise Banyan</a> <ol> <li>No management fee at all for basic account</li> <li>No trading fees</li> <li>Low cost ETFs (ave .12%)</li> <li>Only for individual taxable accounts or IRAs (No joint accounts with spouse or kids trust accounts)</li> <li>Tax loss Harvesting is extra (0.25% up to $96k. No additional cost after that)</li> </ol> <a href="https://intelligent.schwab.com/" rel="nofollow" target="_blank">Schwab Intelligent portfolios</a> <ol> <li>No management Fee</li> <li>Account Minimum $5000</li> <li>Variety of portfolios (including conservative moderate and aggressive)</li> <li>Pro or con is they maintain a cash position which can be a drag on return (they can also make money by loaning out this cash)</li> <li>Tax loss harvesting available if portfolio &gt; $50k</li> </ol> <a href="https://www.sofi.com/wealth-management/" rel="nofollow" target="_blank">SoFi Wealth Management</a> <ol> <li>0.25% fee (First 10k free and no management fee if you are existing SoFi loan customer</li> <li>No tax loss harvesting</li> <li>Low account min ($500)</li> </ol> <a href="https://www.personalcapital.com/" rel="nofollow" target="_blank">Personal Capital</a> <ol> <li>High cost (0.89% up to $1 mil) reduces incrementally downward at higher levels</li> <li>Great App to track investments (free but they will call you occasionally to try to get business)</li> <li>Minimum investment amount $100k</li> </ol> <a href="https://www.fidelity.com/managed-accounts/fidelity-go/overview" rel="nofollow" target="_blank">Fidelity Go</a> <ol> <li>0.35% fee</li> <li>ETF only (Fidelity or BlackRock iShares)</li> <li>No tax loss harvesting</li> <li>$5k minimum</li> </ol> DIY (Do it yourself) <ol> <li>First don’t bother in a retirement account. (No need to TLH) If you don’t have much interest, use a target date fund.</li> <li>Alternatively use a 2 or 3 fund portfolio of a US Total stock, Total International Stock, and Total Bond fund. If you are far from retirement you can eliminate the Bond Fund. Here is a link to <a href="https://www.bogleheads.org/wiki/Three-fund_portfolio#Other_than_Vanguard.2C_Boglehead-style" rel="nofollow" target="_blank"> simple portfolios</a> that you can use from <a href="https://www.bogleheads.org/" rel="nofollow" target="_blank">bogleheads.org</a>. Most retirement plan providers have some index funds in them and it will save you thousands of dollars over the long run if you take the time to find them when you first start</li> <li>In a taxable account, there are a few simple options. Again you can use a target date fund to keep it really simple, or you can use the multi fund portfolios. In a taxable account, it may make more sense to use a few more funds/ETFs so that you have the ability to TLH.</li> </ol> I personally do the DIY, but I am not sure it is the best over the long term. At the time of this podcast recording, I have no robo advisors, but I do have accounts with some of the companies mentioned. I do not currently receive any advertising from these companies. In my general opinion, the best options seem to be Wise Banyan for those who are just starting out, and Wealthfront for those with more assets to invest. I'm sure the other companies are fine also. Remember I am not a financial advisor, rather a DIY investor. Please do your own due diligence before investing with any of these companies.

Episode 12. Tarang Patel, DO -- Roboadvisors