Slew of apps gives con­sumers far more power over fi­nances

Honolulu Star-Advertiser - - BUSINESS - MIKE MEYER ——— Mike Meyer, for­merly in­ter­net gen­eral man­ager at Oceanic Time Warner Ca­ble, is now chief in­for­ma­tion of­fi­cer at Honolulu Com­mu­nity Col­lege. Reach him at mmeyer@hawaii.edu.

Tech­nol­ogy has al­lowed in­vestors to take con­trol of their fi­nances as never be­fore. How­ever, as Manoa Val­ley-based J.R. Robin­son, owner of Fi­nan­cial Planning Hawaii and founder of Nest Egg Guru, told me, tech­nol­ogy has dis­rupted the per­sonal fi­nance space in ways that we never could have fore­seen. For ex­am­ple, the con­sumer is no longer a cap­tive of “ex­perts.” Nowa­days, armed with knowl­edge, there’s no ex­cuse not to be en­gaged in the planning process.

He of­fered some spe­cific ex­am­ples of dis­rup­tive tech­nolo­gies or ap­pli­ca­tions that are mak­ing life easier for in­vestors. Here are some of his fa­vorites and one of mine:

Take ad­van­tage of your smart­phone’s apps. You can do much more than sim­ply check your Schwab ac­count. It al­lows you to take on most ev­ery fi­nan­cial task, from bill-pay­ing to de­posits to pur­chases to bor­row­ing and lend­ing to in­vest­ing. This hand-held de­vice is of­ten the com­mand cen­ter for all con­sumer fi­nance ac­tiv­i­ties.

Ag­gre­ga­tion soft­ware, such as In­tuit’s Mint.com, al­lows users to link bank ac­counts, in­vest­ment ac­counts, credit cards, in­sur­ance poli­cies and 401(k)s. This gives users a 360-de­gree view, thus mak­ing it easier to or­ga­nize, mon­i­tor and main­tain one’s fi­nan­cial plan. It’s great for DIY planning and in­cludes bud­get­ing and bill-pay­ment func­tion­al­ity, in­vest­ment track­ing, alerts and even free credit scores. Robin­son gives it four stars for its abil­ity to make con­nec­tions with vir­tu­ally any fi­nan­cial in­sti­tu­tion.

Pass­word man­age­ment soft­ware solves the prob­lem of or­ga­niz­ing the plethora of user­names and pass­words we have to deal with. Given the dangers in­her­ent in on­line trans­ac­tions, par­tic­u­larly when it comes to your fi­nances, Robin­son says it makes sense for fi­nan­cial plan­ners to of­fer pass­word man­age­ment apps to clients. Why? The plan­ner’s web­site is of­ten the hub of their clients’ fi­nan­cial plans.

Fit­ness watches might seem en­tirely un­re­lated to con­sumer fi­nance, but Robin­son is con­vinced that med­i­cal and long-term care ex­penses are among the great­est threats to fi­nan­cial se­cu­rity in re­tire­ment. His so­lu­tion is to make his clients, at the very least, aware of how im­por­tant im­prove­ments to diet, fit­ness and sleep are to one’s over­all well-be­ing. Robin­son is con­vinced that life­style is key to dra­mat­i­cally re­duc­ing the in­ci­dence of chronic dis­ease such as di­a­betes, car­dio­vas­cu­lar dis­ease, de­men­tia and other age-re­lated ail­ments. Lead­ing play­ers in this space in­clude Ap­ple, Fit­bit and Garmin, but there are oth­ers as well. Robin­son noted that some in­sur­ance com­pa­nies are even pro­vid­ing free fit­ness watches to pol­i­cy­hold­ers and pro­vid­ing premium dis­counts for cer­tain lev­els of ac­tiv­ity that are recorded on the de­vices.

Acorns is both a mi­cro-sav­ings app and an au­to­mated trad­ing plat­form (aka “robo-ad­viser”). You link a credit card or a bank ac­count, and each time a trans­ac­tion is made, the app au­to­mat­i­cally takes the amount needed and rounds it up to the near­est dol­lar. It then in­vests it in a di­ver­si­fied ex­change-traded fund model port­fo­lio. The cost is just $1 per month or

0.25 per­cent per year for bal­ances over $5,000. Robin­son thinks it’s a great way to get your kids en­gaged in sav­ing and in­vest­ing. For those who are char­i­ta­bly in­clined, there are mi­cro-sav­ings apps that, in­stead of in­vest­ing rounded-up amounts, al­lo­cate the

“spare change” to the user’s cause of choice. Apps in this space in­clude Bs­tow, Drops and Coin Up.

My choice in this cat­e­gory is an app from big fi­nan­cial pub­lisher Morn­ingstar called X-Ray, which al­lows you to tar­get your port­fo­lio’s strengths and weak­nesses. It of­fers an in­stant anal­y­sis of your port­fo­lio, in­clud­ing its as­set al­lo­ca­tion, ex­po­sure to dif­fer­ent in­vest­ment styles, ge­o­graphic re­gions and sec­tors. Thus, if you’re too heav­ily in­vested or un­der­in­vested in a par­tic­u­lar seg­ment, you’ll at least get some guid­ance. It also will help you with fi­nan­cial planning by de­ter­min­ing how well your hold­ings and ex­penses are adding up to meet your fi­nan­cial goals. The ba­sic ver­sion is free, but you’ll have to pay for the ad­vanced tool for more de­tailed anal­y­sis.

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