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Financial Planning for High-Income Earners



As an investor, you won’t always beat the market, but finding ways to reduce your tax liability can lead to better returns in the long run. 

Famed investor Burton Malkiel (current head of Wealthfront) wrote, “Remember: Selling winners means paying capital gains taxes while selling losers can produce tax deductions. So if you need to sell, sell your losers. At least that way you get a tax deduction rather than an increase in your tax liability.”

Of course, paying less tax is one thing. Figuring out how to do it is another. That’s where Playbook comes in. Playbook is a fintech app that helps you “beat the tax man” by scanning your portfolio and recommending the most tax efficient accounts along with tax loss harvesting opportunities. 

But who is Playbook best suited for and is it worth the price? I’ll cover those details and more in this Playbook Review. 

playbook
  • Recommends the correct account for your investments.
  • Scans your portfolios for tax loss harvesting opportunities.
  • Transparent fee-based pricing 

$29/month (or $19 if paid annually)

High-Income Earners ($100k+)

What Is Playbook?

Launched in July 2021 by David Hegarty, Playbook combines elements of a robo-advisor and a tax advisor into a single app. The San Francisco-based startup recommends tax-advantaged savings across all your accounts whether they are managed by Playbook or not. 

You can use Playbook strictly for advice (it will read information from your accounts and make recommendations), or you can opt for active management by allowing Playbook to move funds and invest more cash in tax-advantaged accounts.

While Playbook doesn’t try to beat the market, it takes advantage of every opportunity to help you maximize your returns. Accounts managed by Playbook are invested using a low-cost investment strategy, and they don’t have investment fees (outside of the ETF fees charged by the investment companies.)

What Does It Offer?

Playbook will appeal to high-income earners looking for way to reduce their tax burden. Here are some of the key features you can expect to see when you sign up with Playbook. 

Tax Planning

Playbook creates a plan to help you make the most of tax-advantaged accounts. It starts with ensuring that you get the 401(k) match at your employer, fill up your Roth IRA, max out the rest of your 401(k), and then invest in a brokerage. If you’re not eligible for some of these moves, Playbook helps you to identify alternatives, so you can invest in a tax-efficient way. You can set financial goals for up to five years or longer. 

Automatically Moves Your Money

Once you have a plan, Playbook can move your money for you. But that doesn’t mean Playbook is a simple automated savings app. It uses robust algorithms to ensure that you allocate funds to the right account, at the right time. You’ll designate accounts for your financial goals, for your emergency funds, and of course your Roth IRA or an equivalent. Playbook won’t move money without your permission, but it will allow for “easy button” transfers in and out of your accounts so you can invest with ease.

Set Up Playbook Accounts with A Few Clicks

If you don’t have the right accounts set up, you can create new ones with just a few clicks. If you use Playbook accounts, Playbook invests on your behalf using a low-cost index fund strategy. Playbook doesn’t charge for assets under management, making it a good deal for most users.

Flat Monthly Fee

Unlike most robo-advisors, Playbook charges a flat monthly fee. You can choose to pay $29 per month (for month-to-month advice and management) or $228 annually ($19 per month). It may not be worth it for users with small account balances, but it’s a very good deal if you have more than $100,000 under Playbook’s management. Even those with less money may find value from Playbook’s automation and recommendations surrounding tax loss harvesting.

Are There Any Fees?

Unlike most robo-advisors, Playbook charges a flat monthly fee. After the free 7-day trial, you can choose to pay $29 per month (for month-to-month advice and management) or $228 annually ($19 per month).The fee may not be worth it for users with small account balances, but it’s a good value if you have more than $100,000 under Playbook’s management. 

Even those with less money may find value from Playbook’s automation and recommendations surrounding tax loss harvesting. Playbook doesn’t charge any additional fees aside from the small MERs on their exchange-traded funds (ETFs).  

How Does Playbook Compare?

Playbook is impressive in its ability to automate the hard stuff. It will set up accounts, move money, and ensure that you’re putting your hard-earned money in the place that works hardest for you. Thanks to the hefty dose of automation, Playbook is a leader amongst Robo-Advisors, if you like what Playbook automates for you.

From a fee perspective, Playbook is also very competitive. M1 Finance (which offers free asset management) is the only Robo-Advisor that is less expensive than Playbook for investors with more than $100,000 invested. Wealthfront has higher fees, but it also offers automated tax-loss harvesting.

One issue with Playbook is that it is quite prescriptive about its recommendations without understanding the entire financial picture. It focuses on an individual’s finances even if that person is married and filing jointly.

It doesn’t consider whether a Roth 401(k) may make sense. It doesn’t even do much to understand side hustle income (and recommend whether that should go into a tax-advantaged account.

In fact, it doesn’t even ask how many children a person has (which affects taxes), or whether that person has access to a Health Savings Account. At this point, Playbook isn’t a substitute for a human financial advisor that can consider even more factors. I suspect over time, Playbook will start to integrate more of these factors into its algorithm to better serve a wider base.

How Do I Open A Playbook Account?

Since Playbook can move money from account to account or even open up an investment account on your behalf, you’ll need to provide a lot of information to open an account. Go to the Get Started button, and provide your name and email address, which is then verified.

Next your phone number is verified. Playbook also collects your address, social security number, date of birth and other details, to ensure that you can invest through the platform. While you provide a lot of information, Playbook makes the onboarding process simple.

Is It Safe And Secure?

You can rest assured knowing that your personal information is safe with Playbook. They use the same 256-bit SSL encryption that the major banks use for their online banking platforms, along with read-only access. 

How Do I Contact Playbook?

Playbook’s headquarters is located at 1 Letterman Drive, San Francisco, California. The customer service number is 415-805-2040. You can also contact the company at hello@helloplaybook.com. The company is eager to teach users how to use the product, so you can get a human on the phone without too much trouble.

Is It Worth It?

If you’re a single person who earns more than $100,000 per year, and you’re interested in pursuing financial independence, Playbook is a great tool for you. It can help you optimize your investments, so you pay less in tax over the long run. The cost of Playbook is minimal compared to the amount you may be able to save.

The tax plans didn’t seem as appropriate for couples who are married and have shared finances. The plans don’t account for two workplace retirement accounts or how to maximize tax efficiency when considering a greater range of options. The plans may not work as well for self-employed people who are using solo 401(k) plans or other self-employed retirement plans.

Check out Playbook here >>

Playbook Features

  • Automated tax-optimization 
  • Goal-setting 
  • Passive ETF investing

$29 ($19 if paid annually)

ETF management fees (if applicable)

1 Letterman Drive, San Francisco, California




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