Thrive: Your Online Personal Financial Planner

by Nora Dunn on 21 April 2009 19 comments
Photo: Thrive

Thrive: Free Online Personal Financial Planning

So you figure it’s time to proverbially grow up and get financially wise. But you don’t know where to start: you didn’t learn much in school or from your parents, the folks at the bank won’t give you the time of day, and you can’t afford a financial planner. What do you do?

 

Thrive is an online financial planning platform that may be the solution to your immediate needs. As a free service, you’ll receive personalized advice and sound recommendations free from biases. Thrive has been around for the last few years and after receiving accolades from the likes of the Wall Street Journal, and Fast Company, Thrive is paving the way to financially empowering anybody who wants it.

 

 

After catching up with a few team members at Thrive, I gained a new insight into the services they provide, as well as the fun approach that the entire Thrive team embraces when doing the dirty work of helping people with their finances.

 

 

“I started working on Thrive after a few years of my friends asking me for advice on what they should do with their credit card debt, 401ks, students loans, or how to budget better. After a couple of years of this, I realized that our generation is overlooked by banks and traditional companies and what we need is a Charles Schwab for people in their twenties and thirties,” says Avi Karnani, Co-Founder. “Now, three years later, we've been acquired by LendingTree while building on our promise to provide financial advice to anyone who needs it, over the web, for free.”

 

 

What exactly does Thrive do, you ask? Thrive helps you manage your money. By entering in your bank accounts, investments, and credit card details, Thrive will help you budget, keep your spending on track, and make sound investment decisions.

 

But banks around the world are not on-board the Thrive-train quite yet: “It is harder to get in contact with banks outside the US to get them into the system. But we've done our best, we have some of the top Canadian banks in there, and we work every day to get more banks,” says Matt Wallaert, Lead Scientist and social psychologist (a great skill to have when working with behavioral patterns around money).

 

So although Thrive can be used by anybody around the world, they are currently best set up to help US and Canadian residents.

 

Among these people, Thrive aims to be a viable solution to people in their twenties and thirties. However, Avi says “we're seeing an increase in users in their forties and fifties. When we ask them why they signed up for Thrive, they tell us that since the economy has battered their retirement savings, they need something to help them with budgeting and rebuilding better financial lives.”

 

This of course, begs the question: Who is Thrive’s ideal client, aside from age?

 

Avi: “If you're worrying about your third vacation home or how you'll afford that second luxury SUV, you're probably not the ideal Thrive client. We've built the our company to help average Americans make the right financial decisions, as opposed to wealthy folks that all the other companies compete for.”

 

 

Where I become confused (and skeptical) in the process is when it comes to making money. As a free service, how is Thrive financially sustainable?

 

Matt had something to say to me about it: “Basically, we get money from banks so that it is free for users. Among our myriad of free services, one of the things Thrive does for users is help them find the best bank accounts for them. And when people take that recommendation, and go and open that account, the bank will sometimes pay us a small "account generation" fee. It isn't much, but when you add it up, it is enough to keep our doors open and our service free.

 

“It is important to note, however, that we recommend the best bank account regardless of whether we make any money for doing it. The algorithm that determines the best account for you literally can't talk to the money making part of Thrive; they are completely separate programs. And we actually maintain this distinction at our company as well.”

 

 

I tend to cringe at automated advice-generating programs, especially as a former Certified Financial Planner myself. But between the accessible personal support team and the advanced calculations, Thrive is bridging the gap.

 

ARTICLE CONTINUES BELOW

When I asked why I have to enter my personal financial information, Matt said “By giving us access to what you do financially, you enable our algorithms to use some logic to determine appropriate advice, which is actually very similar to what a friend who knows a lot about both you and money in general would do. We can see you're overspending, so we can tell you to slow down. We can see that your accounts aren't set up right, so we can tell you to fix them. You can tell us "I dream of owning a home" and we can say "OK, here's how you go about doing that.” So we're basically your smart, has-the-finance-mojo friend, except online, free, and you don't have to buy us a birthday present (not that I'd reject it: I'm a fan of good cream soda, hint hint.)”

 

 

In regards to how Thrive’s recommendations are generated, Avi shared their secrets: “Some recommendations are made on the basis of pure math, for example, a credit card with lower interest rate is better than one with a higher interest rate, and we can compute the fees you'll pay versus your total debt to factor those in as well. Other recommendations are informed by the opinions and best practices of experts, users, and our polling of financial advisers. For example, that you should have at least 30 days worth of emergency spending socked away in a savings account, but not before you pay off your credit card debt. In terms of investments, our financial advisory engine will focus on the lowest cost index funds rather than picking stocks…Too many first time investors make expensive mistakes picking stocks instead of index investing and even more potential first time investors are afraid to get started because of how hard all of this sounds.”

 

 

When I pressed the security issue, the reply I received was: “Thrive doesn't ask for your social security number, we don't know your bank account numbers, and we can't move your money around…in a worst-case scenario, you may leak some shopping information you aren't ready for people to know.”

 

If you aren’t prepared to enter some financial information into the program though, you won’t get much of a chance to sample the fare, shy of viewing the features you could enjoy if you used the program to its full capacity. “At some root level, if you don't trust us enough to tell us what you do with your money, why on earth would you trust our advice?” says Matt.

 

Fair enough.

 

 

Being a platform specifically for people in their 20s and 30s but with older people now flocking to the service, I wonder what Thrive’s limitations are. When should a Thrive client get a personal financial planner?

 

Avi said: “A good analogy to answer your question would be to compare financial planners to travel agents. Sometimes you need to go to South Africa and maybe you want someone who can guide you that. But, most times you need a plane ticket to LA and rental car waiting for you and for that you use the web.”

 

Surprisingly enough, Thrive actually works hand-in-hand with financial planners, who enjoy the user-friendly interface that clients can continue to use when the planner has gone home.

 

And although insurance recommendations are not part of Thrive, Avi says “we know from listening to users that insurance decisions are among the hardest decisions to make. We're working on it!”

 

 

With a dedication towards growth and a constantly evolving financial planning engine, Thrive just may be a financial planning solution for a self-starter who is motivated to improve their finances but not yet ready to work with a full-on personal financial planner. In this world where it seems that the Internet can do everything except walk the dog (give it time), it seems logical that financial planning programs would wend their way to the Web. Thank goodness that the likes of the folks at Thrive are at the cyber-financial-planning helm.

 

 

Note: The author has no vested or affiliate interest in Thrive.

 

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Guest's picture

Thanks for the great coverage, Nora. It was lovely to talk with you the other day and to be able to talk candidly about why Thrive exists and who we are trying to serve. It is still, even in the midst of these financial times, shocking to me the degree to which young people do not have a source for credible financial advice. Some are lucky enough to have parents with good financial sense, but for the rest, it is hard to find someone that is more fact than rumor, more science than guesswork.

As always, we're working to improve Thrive, so hopefully your readers can take it out for a spin and tell us not only what we do right but what we can do better!

Guest's picture
Laura

Much like other online resources that purpote to help you manage your money, you need to do your banking with major companies to derive much benefit from this. Right off the bat, my little community bank is not an option, so I am not sure how much use I can get from this. I will continue to fiddle, but without my checking or savings accounts, what can I do?

Guest's picture

Laura, I'm sorry to hear that we don't have your bank; we wish we had them all, but unfortunately, it is dependent on your bank more than us. If you'd like, you can shoot us an e-mail over at support@justthrive.com, let us know the bank, and we will go out and contact them to try to integrate them with Thrive. We're adding new banks all the day and we even have a little letter you can send to your bank, encouraging them to add Thrive support!

Guest's picture

Thanks for the heads up on the personal finance tool! Boy, it's great to see companies helping people out with their financial education for a change, instead of trying to rip money out of their pockets!

Guest's picture

We agree, PN. We spend a lot of time trying to get banks to reconsider their fees and the way they generate profits - it drives us a little nut. We'll stay free and keep working on the issue, and we'll be down in DC next week for Financial Literacy Day, lobbying for just this kind of change!

Guest's picture
Guest

I just read this article and signed up about a half hour ago. Thrive tallied all my debt and gave some great recommendations. Also pointed out that I could survive for 0 days without a job :\

Can anyone tell me whether this site is better than MINT? I had been thinking of signing up for MINT but procrastinating.

Guest's picture

This is a different solution than Mint in that it seeks to provide some level of financial guidance. Mint is by far the best budgeting and account aggregation site, while Thrive is attempting to go beyond this and offer a little more in the financial planning arena.

Directionally, Mint is working hard on the budgeting end and using the transaction data they gather to analyze consumer spending. I suspect that Mint will make as much from their data from institutions buying information than from consumers clicking through to open accounts or do their taxes.

As for Thrive, their focus on providing some level of financial planning sets them apart from much of the competition. I believe this is a good first step, but they're still relatively early in the development process.

Patience with these web applications will be required while the industry grows and matures, but I think Thrive, Mint, Wesabe, Geezeo, etc. are all part of a new and permanent trend towards comprehensive online money management that's not put together by your financial institution.

It is my personal hope that these technologies will evolve and be adopted by the masses, as they offer something that is of great value to consumers--vision and control over the entire financial landscape.

Guest's picture
Tyler

This does seem very similar to Mint, although Mint doesn't really give you "advice," it simply keeps track of your accounts and allows you to set a budget and it let's you know when you go over your budget.

Guest's picture
The Economist

I've been using Mint.com for months now and I highly recommend it. From the looks of it, the two sites are very similar, whereas this one gives you advice. I will say that while I appreciate the efforts, I think it's helpful for us all to have some skepticism about the kind of financial advice you get from an algorithm.

It seems that a number of these tools are popping up these days, rudder.com being another. One advantage to the mint world for me is that it has an awesome iPhone app that I use on the daily.

Good stuff though. Thanks for the ad-icle.

Guest's picture

The Economist, I'm curious about your skepticism about algorithmic financial advice. At the very broad level, all advice is algorithmic: you know some things about a person, you apply a filter of knowledge, you output advice. Obviously, as a psychologist, I think the "things about a person" that you know are complicated, but I don't think that means you can't offer good advice with a more limited set of information.

And in particular, at least personally, I tend to believe that for many people, even simple advice is better than no advice. There are a startling number of people working their way through the world with little to no understanding of their basic finances. If we can reach those people and help them improve, I think that makes it worth it.

Guest's picture
Brent

this is very close to mint, but tries to offer advice. If it can't get all the info or computes anything wrong then its completely worthless. My Savings account with Dollar Savings Direct wasn't able to connect (mint is having this problem too). But instead of asking me what the amount might be or letting me put in a manual amount through an unrecognized bank, or even better computing it from the transfers. It just says 0$ saved. Also I go through and make adjustments to the categories and it doesn't update the dashboard. Also the spending goals (ways to cut spending) have no basis in reality other than amount. Did you spend 105? try spending 95$ Also everything is partitioned out on the month. If you go shopping on the first and 30th of the month your advice will be way off that month. So in all my financial health ranks at a 4.5 because I have can't have savings and it calculated my bills as purchases.

Guest's picture

I agree, Brent: we're not as flexible as we could be. And we are doing more to grow there. But for us, and I can say this with complete confidence and candor, flexibility is always going to be less important than offering the best possible advice that is truly complete. We can spend resources making your advice update instantaneously (which is incredibly processor-intensive on the servers, as offering good algorithm advice is reasonable complex) or we can spend our cycles making better and more complete features, and we've chosen the latter.

Which isn't to say we won't work on speed and flexibility as well. I just want to be very clear in both acknowledging the issue and letting you know where our priorities are. If we update instantly, but offer bad advice, that is more of a problem than offering good advice a little more slowly.

Fred Lee's picture
Fred Lee

I'll check it out.

Guest's picture
Laura

I agree that Thrive would be more useful if they would let you input amounts manually. My regional bank also isn't supported, which makes good chunks of the site completely useless. That's a shame, because it looks very appealing and seems easy to navigate. Please keep us updated if Thrive does open up a "manual input" or "unknown bank" option!

Guest's picture

Laura, have you sent us a note to let us know what bank you want to use? If you let us know at support@justthrive.com, we'll actively go out and try to get them in the system, and even give you a nice letter that you can send to them, encouraging them to get in contact with us so that we can help them get into the system. Unfortunately, we can't force banks to help their consumers but we do our best to help them whenever they are willing!

Guest's picture
Ansh

So now..we reach at a conclusion...but hey, are we missing something :-| wolla..i think so. Being an app testing company and giving proper considerations, I think Thrive should also be driven by mobile support apps...specially for iPhone as trend goes..
Wait for my detailed review and test results including performance, usability and functional aspect. Ciao.

Guest's picture
Karen Jennifer

Hi! My name is Karen. This may be an inconvenience but please understand that the LORD is nigh unto them that are of a broken heart, financial need; and saveth such as be of a contrite spirit. I am trying to find a resume person who can help us. I am a 36 year old self-supporting single mom and sole financial support of my two kids age 12 and 9. I need help to pay my gas, water and electric bill.I lost my job in August and still i am out of work. My smaller child is sick with asthma. And she will get sicker as it gets colder. I don’t know what to do. Water bill was $55, Gas $70 and now my electricity bill is around $31, (we are billed 6 times a year) bill (water, gas and electricity) averages $156. I can't understand how gas, electricity and water prices are going up so quickly and yet the official inflation rate doesn't reflect it. I live in a small town without a lot of programs.

Please help us to be able to stay in this house, so we can continue having a normal life again.

If you can not help in cash or you can help with Visa GiftCards , i can provide you my billing account number to payoff. i will appreciate to receive the heads up advice from you.

Please buy me a cup of coffee to quench my thirsty With PayPal you can send money using your checking account or credit card to neverdepartingfromthemosthigh@yahoo.com. Once you have a PayPal account set up, you can receive money or send someone else money via e-mail. It's simple, quick, and reliable!

My primary email address neverdepartingfromthemosthigh AT yahoo DOT com in paypal is an old email address that i always have access to, although it is the same email address I use to sign into my yahoo and paypal account with?

Nora Dunn's picture
Nora Dunn

@Karen - Thank you for sharing your plight with us. I hope that one of our readers might be able to help you out by giving you a lead or connecting you with some helpful people. And hopefully Wise Bread can also help you save money on your bills....

Water: http://www.wisebread.com/saving-the-planet-one-drop-at-a-time

Power: http://www.wisebread.com/hands-in-your-pocket-the-cost-of-standby-power-environmental-and-otherwise

Oven: http://www.wisebread.com/19-tips-to-cut-costs-by-using-your-oven-efficiently

Household Hacks: http://www.wisebread.com/household-cleaning-hacks-that-save-you-money

 

Guest's picture
CindyLou

Did Thrive get bought out by Lending Tree?