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The Miracle of Compound Interest

Your Most Powerful Investment Ally is Time If you’ve ever heard compound interest described as “the most powerful force in the universe,” it’s probably on account of a quote to that effect attributed to Albert Einstein. As it happens, the quote itself is probably an urban legend. But if Einstein didn’t make such a reference, (or, as an alternative version has it, call compound interest “the most important invention of all time,”) it was probably because he was too busy with E=MC2 to give the matter much thought. E=MC2 is the formula that describes converting mass into energy. Compound interest, by contrast, is the formula that describes converting time into money. Lots and lots of money. Compounding Turns Time Into […]

Welcoming Three New Hires to Our Executive Team

At Wealthfront, we believe that everyone deserves sophisticated financial advice. Delivering on a mission this large isn’t easy; it requires patience, funding and most importantly an extremely capable team. Today, I am incredibly excited to announce three new additions to our team of talented executives who will help make our mission a reality. Joe Ternasky, Vice President of Engineering. Yesterday we welcomed Joe as Wealthfront’s VP of Engineering. Joe has had an impressive career spanning Adobe, Apple, Microsoft and most recently, nearly a decade at Google, where among other responsibilities, he ran development for all of Google apps for enterprise. His experience developing compelling user experiences at scale and across multiple platforms will ensure we deliver on the vision laid […]

529 Series, Part 2: The Benefits of Superfunding

On June 1, 2016, Wealthfront announced its new 529 College Savings Plan. This post is the second in a three-part series updating our previous advice on saving for college using 529 plans. This post is based on an original 2014 post by Adam Nash. One of the largest financial obligations that many parents decide to take on is funding their child’s college education. With the current four-year cost of a California public education at UCLA at $136,000 and a private education at Stanford at $267,000, this can be a daunting task even for professionals with high-paying careers. The 529 plan is the most popular of several deferred savings plans for college. While contributions to a 529 plan are not deductible […]

The 529 Series, Part 1: Five Simple Questions When Saving for College

On June 1, 2016, Wealthfront announced its new 529 College Savings Plan. This post is the first in a 3-part series updating our previous advice on saving for college using 529 plans. This post is based on an original 2012 post by Jeff Rosenberger, PhD. For most households, the birth of a child represents a wide range of conflicting emotions and new found responsibilities. From an investment standpoint, it is at this moment that many parents confront a familiar, and yet suddenly urgent financial goal: how to save for the ever-increasing financial burden of a college education. Saving for college can be a daunting financial goal. If you have a newborn daughter, you’ll need roughly $540,000 to pay for her […]

Introducing Wealthfront 3.0

When we launched Wealthfront in December 2011, the idea behind our first generation service was simple: take the best practices of investment management like diversification, rebalancing, dividend reinvestment and tax-loss harvesting, and automate them so investors could get these benefits without the high fees and high minimums of the traditional industry. The advent of low-cost ETFs and the relentlessly improving economics of consumer software made Wealthfront 1.0 possible. In December 2013, we launched Wealthfront 2.0. Our second generation service built a series of high value-added services that previously were only available to the wealthy, and layered them on top of our basic service. These innovative services include our Direct Indexing Platform, Single-Stock Diversification Service, and Automated Tax-Minimized Brokerage Transfers. No […]

America’s $13.2 Trillion Problem

Every year, millions of investors open their brokerage statements and feel a wave of anxiety as they attempt to figure out how much they are really paying in fees. The challenge is it’s almost impossible to tell. One thing we can be sure of is investors are paying way too much in fees. State Street and Boston Consulting Group data estimates that US investors paid over $277 Billion in fees to manage their investments in 2014, and that doesn’t include advisory or maintenance fees. If this continues, investors could lose an estimated $13.2 trillion to fees alone over the next 30 years. That’s $13.2 trillion that could be used to buy new homes, pay for college educations or fund retirements. […]

Happy Holidays from Wealthfront!

At Wealthfront our clients are our one true north, so it’s appropriate at this time of year to take a moment to just say, thank you. 2015 has been a momentous year for us, and our success stems directly from the trust and support you have placed in us. Wealthfront was created with the belief that everyone deserves sophisticated financial advice. To achieve our mission we need to deliver innovative products and change the way the rest of the industry treats its clients. We spent much of 2015 focused on both of those dimensions. Delivering Unparalleled Investment Value We pride ourselves on leading our industry with constant innovation, because every addition to our service is designed to deliver more value […]

The Personal Economics That Drive Services Like eBay & Airbnb

As a Product Manager at eBay in 2004, I had the opportunity to fly to New Orleans for my first eBay Live in June of that year. Over 10,000 eBay fans, mostly part-time sellers, gathered together to discuss, debate and learn about new features that the eBay platform offered them. I’ll never forget that experience, for while my official role was to teach eBay sellers about new features available on the platform, the truth is I learned more from them about their lives and reasons for selling on eBay. The biggest lesson I learned from speaking to hundreds of people who sold either part-time or full-time on eBay was a simple one. The relatively small amounts of additional income and […]

Welcoming Mike Schroepfer to Wealthfront’s Board of Directors

At Wealthfront, we have a once-in-a-generation opportunity to build a new type of financial service, an automated service, for a new generation of investors. But to pursue an exceptional opportunity this large requires a truly exceptional team. Thus far we’ve been fortunate to attract investment luminaries like Burt Malkiel and Charley Ellis and a management team that includes six professionals who helped build billion dollar companies that forever changed their industries. Today, we’re thrilled to announce that Mike Schroepfer, Chief Technology Officer at Facebook, has joined our Board of Directors. A History of Technical Vision and Scale Schrep (as he is known to his friends and colleagues) first began to tackle scale engineering challenges when he was appointed CTO of Sun Microsystems’ Data Center Automation Division […]

Clawback Fees: How Brokers Pull Money From Your Wallet on the Way Out

At this point, it’s likely not a surprise to anyone that the brokerage industry keeps finding new ways to put its hands in your pocket. Charles Schwab, to take one example, publishes a 14-page document outlining all of its fees. And although they do make this document public, we are still surprised by some of their tricks when it comes to fees. But sometimes there is a practice that is so surprising, so despicable, it warrants a bit of attention. Today, we’re going to talk about clawback fees. Why It’s Called the Clawback Fee Wealthfront has the benefit of seeing clients transfer their accounts to us from a wide variety of brokerage firms. This gives us a front-row seat to […]