“You don’t have to be the best. You can win wonderfully just hitting average and making sure you don’t make any big mistakes”
Dan Egan
Dan Egan is the Director of Behavioral Finance and Investments at Betterment. He has spent his career using behavioral finance to help people make better financial and investment decisions. Dan is a published author of multiple publications related to behavioral economics.
We were fascinated at the prospects of how technology and psychology may be blended to help us as investors make better decisions, and in many ways, make fewer decisions. Dan joins us to talk about his background in the field, analysis of mountains of behavioral data, and how Betterment is optimizing their platform around a very important part of investing – human emotions.
Listen to ILAB 45 on iTunes here or subscribe on your favorite podcast app.
ILAB 45 Show Notes
Links:
Website
Linkedin
@daniel_egan
Betterment archives for Dan Egan
Recommended:
ArtofFX – start with just a $10,000 account (reduced from $25,000)
Fundrise – start with only $1,000 into their REIT funds (non-accredited investors OK)
Wealthfront – get your first $15,000 managed free
Betterment – get up to 1 year managed free
RealtyShares – try it free with ILAB link
Discussed:
Betterment CEO Jon Stein: A Decade of Pioneering Robo Advisory – ILAB 22
Sam Mark’s Personal Millions and Show Introduction – ILAB 01
From $1k to Future Millionaire: Johnny FD’s Investments – ILAB 02
From $0 to Self Made, How to 300X Your Investment – ILAB23
Books:
Start Here – Recommended reading
Time Stamps:
03:53 – Beginning in behavioral finance
06:50 – Stock market crash
10:20 – Altering decisions from emotion
14:20 – Personality traits for investing
19:00 – Tax impact preview
23:30 – Conservative and liberal taxpayers
26:00 – Buy and hold vs. active manager
28:00 – Getting hired at Betterment
31:00 – The Betterment team
34:44 – Design and user experience
38:00 – Recession and market crisis plan
43:28 – Marketing timing and dips
46:22 – Internal growth vs. the competition
51:20 – Call in advisor service
56:10 – Making quick emotional decisions
59:30 – Anticipating the next downturn
1:00:30 – Investing in yourself
1:06:00 – Surfing in Bali & skiing in Tahoe
1:06:40 – Betterment vs. other Robo-advisors
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