Answer: nearly 4,100, according to The Nielsen Company.
Question: How many good ones are there?
Answer: Far, far fewer according to one study.
Finance Websites That Work
In a study published this March, by the Center for Retirement Research at Boston College, Kimberly Blanton searches for the “finance websites that work.”
Blanton, a one-time Boston Globe reporter, now a writer for the Financial Security Project at BC splits the successful sites into three broad categories: financial data aggregators, financial decision tools, and personal finance communities. For each she selects a few of the most successful and searches for patterns behind their success.
Financial Data Aggregators
According to the study, aggregators use computing power to fire complex analysis that can be quite useful. This category includes dynamic budgeting tools like Mint, that pull your data from a variety of accounts and show you what’s happening with your money in colorful graphs, charts and displays. The cost of setting these kinds of sites up and running them is high, Blanton notes, so many are “hosted by well-financed companies seeking to lure people to the sites in order to sell mutual funds, credit cards, or other financial products.” So user, beware!
Here are the aggregators she gives high marks:
- Mint.com‘s budget tracking
- Morningstar.com’s Instant X-Ray portfolio diversification calculator (see our recent review here.)
- Bankrate.com, for product comparisons like current CD or mortgage rates (though she warns that “Bankrate promotes the use of credit and should be viewed with extreme caution given its close relationship with lenders.)
Financial Decision Tools
Blanton argues that “financial information is effective only if it is personalized.” The trouble with building smart financial decision tools, is that they often require the user do some educated guesswork on certain items (like how long you’ll live when using a retirement calculator) or accurate self-assessments (like how much we’ll be able to save). “The value of these tools,” she writes, “is that they provide insight with a simple benchmark or other measure of one’s financial situation. Their simplicity is also their downfall.”
- Gosimplifi.com, a free tool designed by financial planners to help those who want to do-it-themselves get a better handle on their finances. Grades your financial literacy, the shortcomings in your plans and helps prioritize goals.
- PSECU.com, a credit union website that is remarkably non-promotional.
- Sorted.org.nz, the New Zealand Retirement Commission’s cool site offers calcuators, visuals, and sorts information by life stages, including for children and students.
- Fidelity.com, informative graphics on free features like “My Plan” allow you to change variables to see different outcomes, like how working longer would impact your retirement, or changing the age of your retirement. (She warns that the solutions offered are, obviously, only Fidelity’s.)
Personal Finance Communities
The potential downside is obvious. You have no idea who you’re communicating with online, or their abilities or training and could be in for loads of bad advice. But Blanton finds a fair amount of self-policing going on at these sites and clearly users know these limits.
- Bogleheads.org, useful advice and a community willing to talk at any level of sophistication. “There’s no silly question,” she quotes co-founder Mel Lindauer saying.
- Fool.com’s investing game CAPS. A kind of fantasy football for investors, Blanton sees it as a way to get educated about investing at no cost, though she acknowledges it promotes an aggressive style of investing that is not for everyone.
- GetRichSlowly.org, a blog started by J.D. Roth in 2006 to chronicle his struggle out of debt, it’s grown into a strong community and a full-time career for Roth.
Not all of these sites will be of use to you. I can’t imagine, for example, a smaller universe than that which includes members of the Bogleheads boards and Fool.com. Still, with thousands and thousands of sites out there, its nice to have ten to look to for some useful interactive information and tools.