

SmartAsset (YCS12) Raises Money to Provide Financial Advice - mcarvin
http://techcrunch.com/2012/10/30/smartasset-funding/

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ianferrel
I'm definitely interested in this product, and tried them out a little while
ago when I first saw them mentioned on HN. I was very confused then. The math
didn't seem to work out, and I couldn't understand what calculations they were
making at all.

I just tried it again. It continues to be a mess. I tried the "better to rent
or buy" comparison. I input information about my income, my rent, and my
available cash.

I get a chart that says the two are almost equal over a long period, given a
house value of $393k. I click on the "change" link by the house value to try
playing with it. I get a popup that has the value (which I can't seem to
change), a slider below for the down payment, which says $14k above and "10%
of home value" below. Note that 10% of $393k is not $14k. Below that, another
slider that says mortgage value, and has $379k above it and "30 year mortgage
at 2.75%" below. As soon as I adjust the down payment slider, the percentage
corrects to where it actually should be. But changing the slider changes the
value of the house! Apparently the way to adjust the price of the house is to
fiddle with both the mortgage amount slider and the down payment slider. Also,
the numbers change colors. I assume red is bad and green is good, but I'm not
sure what exactly the color signifies.

I get things to something reasonable and go to check the chart. Here's what I
see off to the side for the 30 year summary

If you rent Income $5,989,000 Rent $555,000 Expenses $533,000 Income Tax
$1,942,000 Net Wealth $2,997,000

If you buy Income $5,802,000 Home Equity $464,000 Home Payments $378,000
Expenses $946,000 Income Tax $1,841,000 Net Wealth $3,140,000

Why is my income $187k more when I rent? Did I get a side job instead of
mowing the lawn at my hypothetical house? What about other investments? Maybe
that's why my income is higher when renting? None of this is explained.

I read down below, and it seems to think I live in Littleton, CO. I guess
that's the default? Since tax rates vary so widely, it seems weird to have a
default location rather than ask me that at the beginning. Oh well, I click on
the location bar and enter my zip code. The first time, it pops up with the
city name, and I click Done. The city name goes away and the text telling me
to enter zip code or city name stands out in red. I try the zip code again. No
dice. There's a "where do you live" field, and a "where do you want to live"
field. Not sure why we need two of those. Which one will show up in the
results? Ah, apparently, the first one is where you're renting, the second is
where you might buy. I guess that's useful. Why aren't the two boxes called
"Rental location" and "Purchase location"?

Overall, it seems like a complete mess.

I submitted this feedback via their website as well. I hope they make this
awesome, since I definitely like the idea.

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mcarvin
Ian, thanks for the feedback. We do a lot of user testing and the problems you
are experiencing are new to us. We pay $30 for a user test session, can you
email me at info at smartasset dot com, so we can get something lined up.
Thank you.

On the change in your income. When you buy a property there is an opportunity
cost associated with the cash that you use to purchase the property (down
payment + closing costs). This money would have accrued interest income had
you continued to rent, hence the larger value for income in the rent scenario.

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greattypo
I would bet that most of my friends have their assets sitting in a checking
account, so I think this is a huge problem. Glad some big investors agree!

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dmmalam
awesome work guys!

