For some time now, I knew I needed to find a better way of managing my personal finance and investing activities. I had spent years using a single Excel spreadsheet to manage my cash and debt positions. I looked at Betterment and Wealthfront, but I didn’t like the functionality, they felt clunky, and the investment management tools weren’t great.
Then I came across Personal Capital. It was like Mint + Fidelity, but the analyses were better and the interfaces were more beautifully designed. With Personal Capital, you can do the following things for free:
- Quickly track you income and expense
- Automatically track your net worth
- Analyze your portfolio’s current asset allocation and receive a recommendation for an optimal allocation
- Review your investment portfolio for excessive fees
- Run various retirement planning calculations to visualize future outcomes based on various savings decisions
Signing up, Logging in, and Using Personal Capital
After creating a username and password, Personal Capital prompted me to input and link all of my financial accounts. It took a few minutes to add:
- Our joint Fidelity brokerage account
- Tran’s 401k account
- QL’s 401k account
- Tran’s HSA
- QL’s HSA
- 3 checking accounts
- A mortgage loan with a different credit union
- All of our credit card accounts
Some accounts had me verify security questions as they were linking to Personal Capital. Once the accounts were linked, I edited the name/appearance of some of them so I could easily distinguish among accounts. I deleted a couple of Chase credit card accounts I didn’t use, to clean up the dashboard slightly.
After about 10 minutes (Fidelity took more time to connect), all of our accounts were linked, summarized and displayed on one screen using nice charts and graphs.
Before using Personal Capital, I had to manually go to all of my accounts, download the transactions, and combine them into a spreadsheet to track my spending. Usually it was so time consuming to do, I would settle to tracking the account balances only and not look into spending details. For analyses, I relied on my Fidelity and Merrill Lynch dashboards, but they felt slow and lacked basic functionality. After getting all the accounts into Personal Capital, I played around and explored the different features and outputs and was pleasantly surprised. I was easily able to track my income, expenses, cash position, net worth, portfolio allocation, and many other outputs.
Our monthly income was clearly presented and easy to digest. I liked that it was automatically categorized and summarized in a graph. I could change the time periods and the categories to organize it as I liked. Before using Personal Capital, I had a rough idea what our inflows were each month, but this put the numbers and categories in perspective. Not surprisingly, our paychecks accounted for the majority of our income. As we shift to building more passive income, I expect our investment income will grow.
Our income for this period was a little inflated as we received a repayment for a small family loan we made.
Our expenses were as cleanly categorized and laid out as income. Our housing costs (mortgage and rent) are the highest expense. The rest of the expenses are a variety of categories we personalized for our budgeting.
Net Worth Tracker
The net worth tracker is easy to customize and understand. You can look at the components of net worth individually if you want to, and you can view it over customized time periods. We’ll be sharing this monthly going forward in our Financial and Net Worth Updates.
I really liked the way our investment portfolio is presented on Personal Capital. I’m heavily concentrated in US stocks, and am bullish on them in 2018 and beyond. As Warren Buffet says, don’t bet against the US economy.
You can click on each individual asset class component and drill down further.
Personal Capital will show you where your current allocation is on the Efficient Frontier Curve. The Efficient Frontier Curve represents portfolios of the best returns for a given level of risk. You want to be on the curve and not above or below.
As you can see, we were slightly below the curve due to our cash position at the time. We are working on deploying it strategically into more VTI shares.
Personal Capital will also show you recommended changes to your allocations. It will recommend specific dollar amounts to invest or reinvest in each asset class to get you to an optimal asset allocation.
The retirement calculator is pretty robust. Using your assumptions and Monte Carlo simulations, it comes up with future financial scenarios. You can input life and spending goals such as a rental income, pension income, a wedding or a home purchase. The calculator will take all this into account. You can save multiple scenarios to see how different possibilities compare.
Give Personal Capital a try and see how you like how it looks and feels. I like the smooth interface and the color scheme a lot. It also saves me hours each month logging in to multiple accounts and manually keeping track of expenses.
What did you think of Personal Capital once you got up and running?