“There has to be a simpler way to invest.”

That’s what the Jon Stein, the CEO of Betterment thought to himself not too long ago when he was beginning his investing journey.

Well that thought has turned into a $500 million dollar investment company in just under 4 years.

Their growth has been amazing and exciting to watch. I was able to get Jon on the GF¢ podcast to share how he created his dream company and what his big plans are.

IMG - How Betterment Went From Zero to 500 Million in Less Than 4 Years

What is Betterment, and what are Some of Its Features?

  • Automated Investing Service
  • Gives the best possible return for the lowest price in the least amount of time.

 Goals Based Planning

  • Betterment allows each investor set a goal — for example, saving for retirement, saving for kids’ college, etc. – and Betterment will then tailor each portfolio according to that goal.
  • Once you have input your goals, Betterment will automate how much you need to save each month, and will even allow you to have those funds automatically deposited into Betterment.

Betterment’s Goal

  • If you give them 5 minutes of your time, they will have your financial future secure.

Betterment’s Background

  • Jon Stein and the Betterment team are committed to an extremely forthright company who are completely transparent about their processes.
  • Before Betterment was created, Jon Stein was using Vanguard, which was very low cost, but had a poor interface and little guidance.
  • He was also using ING Direct (Now Capital One 360) for a savings account, and found that it was extremely easy to set up and fund.
  • Jon Stein combined the low-cost of Vanguard with the ease-of-use of ING Direct to create Betterment.
  • It’s better investment, but retains the ease of use.
  • Started in May 2009 with huge goals on an unrealistic timeline – what was assumed to take approximately 5 months in fact took 14 months to launch and grow.
  • Betterment has grown exponentially since their launch, with 35,000 customers and 500 million + in assets under management.

Betterment Now

  • Heavily invested in the latest, best technology.
  • 50% of the company’s staff is dedicated to the service’s technology.
  • One of the very few, if not the only company to offer next-day deposits.
  • Believe that advice should be freely accessible, so advice is readily available and accessible on the site.
  • Have added integrations with third parties such as Mint, as well as a mobile app.
  • They are adding more things but still want to maintain the same easy experience.


  • Jon Stein believes that ETFs (Exchange Traded Funds) are the most efficient way to build a diversified portfolio.
  • ETFs are like mutual funds.
  • They’re cheaper to trade, and competition drives the cost of the funds down.
  • Because of ETFs, portfolios through Betterment are globally diversified, and can be very diverse with a small investment, even as little as $1,000.

Betterment’s Future

  • Betterment takes the long view on investments.
  • Jon Stein believes that the markets represent the success of the global economy, and that though individual years may be down, the global economy will continue to improve and strengthen over an extended period of time, and that will be reflected in the markets.

Betterment has plans to :

  • further tailor their portfolios
  • enhance portfolio optimization
  • give more individualized advice for goals
  • give greater accessibility (mobile app)
  • enhance the user experience even more
  • partner with RIAs through their practices

Learn more about Betterment here.


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