So, someone convinced you to start squirreling away your hard-earned pay in a 401(k) for some distant retirement day. You did the right thing, but now that money is sitting there, you can’t touch it, and it’s not, um, growing! We’re super excited about blooom (yeah, with three o’s). Here’s why: In under 5 minutes, you can get their web app and use blooom’s proprietary automated technology to analyze your 401(k) for free.
Want to make some changes? You’ll learn how to optimize your 401k options and minimize hidden fees. Those little fees that mutual funds charge you to manage your money add up astronomically over the years. Fees are buried in a fund’s prospectus—requiring a load of math and a law degree to truly understand how that particular version applies to your unique situation. The guys at Blooom offer a fee calculator that can give you a clear picture of what those fees are costing you — without requiring you to obtain a degree in advanced mathematics.
The beauty part is that their service does not require you to move your account. And, it doesn’t matter where you work, where your 401(k) is held; or the size of your account. The Wall Street Journal called Blooom, “One of the best online tools for retirement planning.” And Fast Company named Blooom as one of “The World’s Most Innovative Companies of 2015 in Personal Finance.”
blooom is crazy about 401ks!
Most investment managers charge a percentage of your portfolio — frequently in the 1-2 percent per year range. Even the new so-called robo-investment products charge an average of .4 percent of your portfolio annually. (Robo-investing is the very hot new alternative to investment advisory services. With robo-investing, your money is managed using algorithms, so no direct human involvement is necessary once the plans are set up.)
Blooom can help you with any kind of employer-sponsored retirement plan, whether 401(k), 403(b) or TSP. The three founders of blooom — Kevin, Randy, and Chris — are investment advisors by training who spent their early years in the field of “wealth management.” Watch their hilarious video, in which they parody their role as toadying up to rich ladies by painting their toenails for them and performing various other humiliating tasks.
Who Started blooom
After learning their trade, the blooom founders realized there are 90 million Americans participating in 401(k) (or similar) retirement plans who either don’t have large enough accounts to attract the help of a traditional face-to-face advisor or don’t have the time or inclination to manage the account on their own.
Does that sound like you? Do you perhaps have better things to do than manage your far-away, retirement money? We know a lot of smart people with heavy-duty degrees, math, business or the like, who have a) a full-time job, b) kids, c) wife or husband, d) last but not least, hobbies or sports that keep them plenty occupied. Who needs the aggravation of rebalancing your portfolio at regular intervals or micro-managing your choices based on performance and fees.
Speaking of fees, the smart money on Wall Street figured out long ago that all the big money being paid to investment advisors was basically money down the drain. Sometimes advisors were right. Sometimes they were wrong. Aggressively shifting money around from one investment vehicle to another was expensive and the costs outweighed the gains most of the time.
Even more importantly, the detailed mathematical analysis showed that the one consistent factor in successful investing was not picking stocks or other investment products, but reducing fees. (Read this very interesting Forbes article on how fees suck the blood out of your portfolio.) The principle of fee-reduction is at the core of blooom’s ingenious program.
In your free analysis, Blooom scours your company’s 401(k) choices to map out the lowest fees and translate the ratio into actual dollars. You can take that free advice and move your money into more optimal funds with no obligation. Or, you can sign them up to keep track of your account and continue to look for the best pricing and lowest fees for years to come.
Long story short, in case it’s not completely obvious, we’re really impressed with Blooom, both for the logic of their program and for the super-low cost. Check it out!