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- Wealthfront is a robo-advisor service that helps you invest your savings.
- The company started a new program called "Time Off for Travel" that helps users plan to take a sabbatical from work to
travel the world. - It analyzes your entire financial position, and your long term goals - like saving for a house or retirement - to help you figure out your plan.
What are you saving for?
When you open a new investment account, this is typically the first question you'll be asked. Your answer determines how your account is set up, and what kind of funds your money will go into - in particular, it guides how your savings will be proportioned between high-earning but higher-risk funds, and to slower-earning but safer ones.
Typical reasons for saving include things like general investment, retirement, to buy a house, or to build an emergency fund. Wealthfront, a popular robo-advisor service that we've reviewed before, figured out that there's another big reason that people might want to save for, or plan their long-term savings around - to take an extended leave and travel the world.
Robo-advisors use algorithmic tools to help provide financial advice or portfolio management for you. This helps keep costs down compared to working with a traditional financial advisor, which is potentially a better option for some people. It also means that just about anyone can use the tools, even with smaller amounts or looking for more casual investing.
This summer, Wealthfront launched a new program called Time Off for Travel. Like the name suggests, the financial-planning service is designed to help people realize their goal of taking an extended leave from work to travel.
"The millennial generation is completely blowing up our parents' definition of 'The American Dream,'" said Dan Carroll, Wealthfront co-founder, in a press release. "Life is no longer linear and work is no longer 9-to-5. We prefer collecting experiences to collecting assets and retirement is no longer the ultimate goal."
The decision to quit your job and uproot your life to travel is not a light one. If it's a serious goal of yours, there are a few things to square away, all of which Wealthfront takes into account.
The key is figuring out how you can make it happen without hurting your future self. You wouldn't want to stop saving for retirement while you travel, for example. When you have a current and funded Wealthfront account, you can connect your accounts at other institutions. The Time Off for Travel tool then looks at your entire financial position and analyzes everything, figures out whether it's practical to take the time off, shows you how long you could afford to take off, and provides an idea of what effects your leave will have on your long-term financial health.
Once everything is set, the tool calculates the affordability of your goals. If the trip you had in mind is unrealistic, you can use the tool to figure out something that's more feasible, or figure out what you can change to make the trip work. You can also adjust your savings rate and contributions once you have your long- and short-term goals defined.
With retirement coming later in life - if at all - there are good reasons to take a sabbatical earlier in life to travel and relax, something that's typically associated more with retirees.
"It's not enough to help our clients plan for the traditional milestones like buying a home, having kids and retirement," said Carroll. "We need to understand their dreams and use technology to help make them a reality."
Click here to learn more about Wealthfront and open an account.
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