The Plain Money approach to investing isn’t fancy — it’s just developing some good habits: buy and hold index funds, keep costs low, keep things in balance. But in some 401(k) situations that’s not easy. You may have multiple accounts, some left over from earlier employers. To do the job right, you need to keep up with the available investment choices and make sure your portfolio doesn’t get out of line.
Or you could use a service like Blooom, which I’m currently testing. So far I’m impressed! I have some tax-advantaged accounts from a couple of earlier jobs and several others with my current employer. I signed up with Blooom and it took only a few clicks to get my accounts in much better shape. Here’s what Blooom did for me:
- Using only the assets available and keeping my balances with my current provider, found lower-cost alternatives with similar performance.
- By requesting rebalancing through my current provider, lined up my asset allocation with my investment goals.
- Set up future rebalancing to keep my asset allocation in line with my goals.
The cost is affordable: $10 a month for a single account. If you have multiple accounts (as I did), there are discounts. Quick chat support helped me get everything set up.
The one disadvantage was that Blooom could not manage all of my accounts with my provider — and those unmanaged accounts are heavily invested in bond equivalents. So I had to adjust my Blooom-managed accounts away from bonds to get my overall percentage of stocks and bonds right.
In my judgment, Blooom will repay its modest monthly fees many times over, just in finding ways to reduce investment fees. And it already has shown me some investment alternatives (low-cost passively managed assets, of course!) that I didn’t know were available in some of my older investment accounts.
You can even get your first month free at this link for Plain Money readers:
Try Out Blooom. If you do try it out, please let me know your experience. I’ll update this post from time to time and let you know how things are working out.
That link again: Try Out Blooom free for a month.
Full disclosure: If you do try out Blooom, I will receive an affiliate referral premium.
Finally, this obvious question: “Hey, you’re a Ph.D. in economics, can’t you figure out what Blooom does by yourself?” And the answer is yes, in principle, but I don’t have the time or patience to investigate everything about my old investment accounts. Blooom is essentially automating the principles that I advocate in Getting a Grip on Your Money.
In spring 2019 I’m teaching the macro principles class for the first time in a few years — and I’m looking forward to it. I’m a regular participant in our department’s weekly macro seminar and I have some new material and in-class tricks to try out. One important note at the start: Macroeconomics is harder than you’d think if you spend much time on social media. There, people get lots of agreement when they say the case is “overwhelming” for one macro policy and there’s “no evidence” for another. Trust me, on all of the major controversies, from the minimum wage to monetary policy, there are no overwhelming cases or totally unsupported positions. With the framework of introductory macroeconomics, though, you can make sense of the competing arguments and come to a reasoned judgment. Here we go!
