Archive for February, 2009

Wesabe partners with WattzOn to help quantify and reduce your personal energy consumption

February 9, 2009

The folks at WattzOn, a start-up named “Best Idea 2008” by Businessweek, believe that climate change and fossil fuel scarcity are global problems, and that individuals will provide the solution.  Through a free online tool, WattzOn helps people answer the question of how much energy it takes to fuel every aspect of their lives, and factors in community input to formulate the answer.

We’ve formed a partnership with WattzOn to help consumers more easily quantify, understand and reduce their personal energy consumption.  We were drawn by the similarities in WattzOn’s approach – leveraging individual contributions for the benefit of the community – and the fact that this is just a really cool, important idea.

Through this partnership, Wesabe members will be able to see both the financial and environmental impact of their spending.  By tapping in to WattzOn’s knowledgebase, you’ll be able to see your purchases in both dollars and watts.  You’ll also have access to WattzOn’s wealth of comparison tools (How much energy do I use compared to my peers?  To other countries?  How large of a solar panel would be needed to fuel my life?) and recommendations.

Here at Wesabe, we’re constantly working to make your financial data more than just a set of retrospective numbers shown in a few pretty graphs.  Our Cutback tool, for example, identifies trends in your spending and shows you ways to save.  This partnership will give you a whole new lens through which to view your purchases and lifestyle.

We plan to launch the integrated Wesabe/WattzOn application at the March O’Reilly ETech conference in San Jose (and will probably have something for you to check out in Wesabe Labs prior to then).  In the meantime, we’ve created a few preview screenshots to give you an idea of what a dual financial and environmental view of your energy usage could look like:
dollar-vs-energy-tag-detail1.png

We’ll be helping WattzOn more accurately quantify how much consumers spend on utilities by letting them use our Automatic Uploader to pull this data directly from individual bills, similar to the way we use the uploader to pull bank and credit card data.  This will help WattzOn users eliminate the guesswork and get an exact picture of their home energy usage trends.

You can learn more about WattzOn and check out their free online tool here.  We look forward to working with and being inspired by the WattzOn founders, MacArthur Fellow Saul Griffith of Makani Power and Raffi Krikorian of Synthesis Studios.

Introducing investment account tracking in Wesabe Labs

February 6, 2009

Yup, you read that right – you can now add your investment accounts to Wesabe.  We’ve posted a bell- and whistle-free version of account tracking in Wesabe Labs, and would love to get your feedback.  While we’ve got some great visualization tools in the works that we’ll add prior to the general launch, our focus right now is connectivity.  We’ve automated many of the major brokerages and investment houses (including Schwab, Vanguard, Ameritrade) and offer manual upload or our Firefox Uploader for others that let you download your files in an OFX format.   You can help us make this feature better by sending an email to support@wesabe.com letting us know what works for you, what doesn’t, and any other thoughts you have.

investment.png

To sign up, just head over to Wesabe Labs where you’ll see a list of features we’re working on.  Clicking the “Sign Me Up!” button next to Investment Accounts will automatically enable the feature for you.  Head back to your main Accounts page, click on “Add an Account,” and start typing the name of your brokerage in the “name” field.  Tip: In the drop-down list, look for brokerages with the word “Investments” in parentheses at the end of the name, such as USAA Investment Management (Investments).  These are the ones that we’ve got up and running.

If you’ve played with the feature and decide you’d rather wait for the fully baked version, simply head back to the Labs page, where you can disable this, or any other Labs feature, with a single click.

Investment account tracking has been the top wish list item for a number of our members, so we’re really excited to deliver an easy way to keep an eye on 401(k)s, IRAs, mutual funds, etc.  Thanks in advance to our awesome members who help us test and make our features better in Labs.

A better model for retirement savings?

February 3, 2009

A journalist asked me today whether I thought that the 401(k) system was going to be trusted for retirement planning now that so many people have lost such huge chunks of their investments in the market downturn. Would people still use 401(k)s, she wanted to know, and what might save them or make them better? How about mandatory financial education?

I was a little taken aback at the idea that 401(k) programs might be viewed this way. While certainly market investments of all kinds have taken a beating, the tax advantages of 401(k)s and the possibility of employer matching contributions make them very attractive structurally, even if not attractive at the moment. I wouldn’t want to throw out a system that largely serves to help people simply because of a bad year, or even a few bad years, in the market.

But her question made me think: what could we be doing better? I don’t agree with mandatory financial education as a real curative — I’d certainly be happy enough to have real, actual home economics (not just cake-baking, but money management skills) taught in high schools. I don’t think, though, that would suddenly cure retirement woes, any more than mandatory physical education has cured obesity.

I did have an idea that I blurted out and then warmed to after the call had ended. I believe that one of the big things people forget in their retirement planning is asset allocation — having a 401(k) fully invested in the stock market when you’re 60, say, is a very poor match of your risk profile and your asset distribution. I’ve always liked John Bogle’s advice that your bond holdings be roughly equal, in percentage terms, to your age. 60% or more bond holdings would protect a 60-year-old’s retirement funds to a much better degree than any allocation of stock mutual funds would.

So what in the tax code gives people incentive to properly allocate their assets as they get closer to retirement age? I’m a big believer that if you want people to act a certain way, don’t tell them to act that way in a high school class; instead, make it worth their while in the tax code. Is there a retirement plan model that would present a simple tax incentive for proper asset allocation? As a strawman: you can earn double tax credits for 401(k) or IRA contributions to bond holdings, up to a percentage of your overall retirement savings equal to your current age. (Not ideal, since what you really want is to distribute all holdings, not just current year contributions. Anyone have a better, simpler model?)

I do think that the effects this downturn has had on those in and near retirement have been brutal, in many cases devastating. The 401(k) and IRA programs have taught many Americans the value of retirement savings by giving them a tax incentive to learn. We certainly shouldn’t throw away those ideas, but maybe it’s worth improving them with a program — and incentive — for secure asset allocation.