When I first started managing my own money, I did everything manually. Every month, I’d log into each of my accounts and record the balance in my Net Worth Record. It would take me a good hour to get every account and was such a pain, I started consolidating and closing accounts I didn’t need!
For a very brief moment, many years ago, I tried Quicken and subsequently Mint. They were all OK — but they didn’t play nicely with my brokerage accounts. Eventually I abandoned them and went back to manually logging in.
Fast forward to today and I spend just 15 minutes each month managing my money. Just 15 minutes each month plus another five each week is enough to get everything right… and the cornerstone of that system is a tool called Personal Capital. It’s free, it’s well designed and what started as a test run in Fall 2015 has become my permanent solution.
I use Personal Capital as a way to quickly collect brokerage and banking data for my Net Worth Record, a spreadsheet I use to track our family’s net worth. Personal Capital will pull the data from each account so I don’t need to manually log in. It separates itself from other services because the investment management portion is not an afterthought and fully integrated into the system.
Many other tools started as a budgeting tool that added on investments. Personal Capital started as an investment tool that added in budgeting.
About Personal Capital
Before we get into the service, let’s talk a little about the company.
Personal Capital was founded in mid-2009 with the stated mission of “better financial lives through technology and people.” The business has two components: a free personal finance aggregation tool (that I use to track our financial performance) and a paid advisory service. This review will look only at the aggregation tool side as I haven’t used any aspect of the paid advisory service.
Located in California, it was founded by Rob Foregger, Bill Harris, and Louis Gasparini and as of October 2014 they’ve raised over a hundred million dollars in funding (per Crunchbase). Bill Harris is the CEO of Personal Capital and was formerly CEO of Intuit, Paypal, and several other financial services and security companies. The other two co-founders are also as accomplished but have moved onto other pursuits.
Signing up was pretty quick and they had every single one of my accounts available, including the Maryland 529 plans. I signed up several months ago but felt like it took no more than a few minutes.
The Transactions menu item is where you’ll find the budgeting tools that Personal Capital recently added. If you’ve used Mint or other budgeting tools, it’ll look familiar.
You have a list of transactions categorized into Income and Spending, followed by Bills.
Here’s a shot of the All Income Cash Flow chart:
One thing that requires a little bit of training is that it doesn’t know when you transfer money from one account to another. It gives it a strange categorization at first and you have to go in and say it’s a transfer. Until you do that, you sometimes get wildly crazy numbers. 🙂
As I mentioned earlier, Personal Capital started on the investment side and only recently got into the budgeting side… so the portfolio tools are better. Here’s what I see under Portfolio -> Holdings:
This snapshot was taken in the afternoon on January 12th and the market has been crushed the last 30 days (most notably the first few days of 2016). Looks like I’ve been a little more fortunate, having lost only 3.21% vs. the -4.77% of the S&P500 and -5.4% of the Dow. The Balances and Performance tabs are less interesting than the Allocation tab:
Personal Capital is going across all of my brokerage accounts, granted it’s just at Vanguard and TradeKing, and giving me a full breakdown of my allocation. I can click on one of the boxes and it can give me an even granular breakdown:
If you click down one more level, it starts telling you the actual holding and the amounts you have.
The last fun chart we have is US Sectors:
The Advisory tools section offers the following:
- Investment Checkup: Given what you’ve shared in your enrollment, they would recommend an allocation. I’ll expand on this below.
- Retirement Planner: This looks at whether or not your current pace of savings will be enough to support your retirement. It’s a really fun tool I’ll have to play with some more. (can you tell I’m a forecasting/stats nerd yet?))
- 401k Fee Analyzer: This takes a look at all the expense ratios in your various accounts and tell you if you’re paying too much. The vast majority of our holdings are in Vanguard funds so there’s not much to see here.
- Advisor: This is a page where you can schedule a call with a fee only financial advisor. The fee is an annual fee and based on assets under management.
- Invest Now: This is where you’d go if you wanted to enroll in their service.
- Research & Insights: The name for their blog.
So more on the Investment Checkup tab, this will take your investment profile and recommend a target allocation. Here’s mine:
Here’s where rebalancing comes into play. My goal was never to be at 12.5% US Bonds but as a result of market forces, here we are. This is why it’s important to rebalance each year, something I have yet to do. This is a good reminder.
Also, once you hit $100,000 in investable assets, an advisor will start calling you. If you pick up and tell them you’re not interested, they will obviously stop. If you don’t answer, they will keep trying for a while and leave polite messages.
Personal Capital vs. Mint
Mint is a very popular budgeting and money management tool that is owned by Intuit, the owners of Quicken and TurboTax. In its day, as far as personal finance management went, Mint was the gold standard for aggregation. It’s easy to use, incorporates all of your accounts, and can give you a big picture of your finances pretty quickly.
The big difference is that Mint is coming at the question of management from the income and expenses side. It’s primarily a budgeting tool with a robust suite of tools to help you get on top of your spending and servicing of debt. It’s less sophisticated in the investing department so its tools are limited in that regard.
If you’re looking for a budgeting tool, Mint is going to be better. It was designed to be a budgeting tool first. The big knock against Mint is that there’s very limited customer service.
If you’re looking for a portfolio management AND a decent budgeting tool, Personal Capital would be a better fit.
What Needs Work?
It seems to have problems connecting with TradeKing because TradeKing has a different authentication system. What I’m able to do is put all of my holdings in a portfolio and Personal Capital will track them separately. It’s not a perfect solution but for now it’ll suffice. I hope that eventually they can get the technology sorted out so I won’t have to use this workaround but for now the workaround works just fine.
The budgeting tools need more work but it’s relatively new so I expect growing pains. It’ll get there and for now it still gives me the knowledge I need, monthly income and expense values, even if the categorization needs more hands on help.
Right now, Personal Capital is my tool of choice when it comes to managing money and investments. At this stage in my life, investments are becoming a more significant part of our finances and so having visibility into that area is crucial.
Have you been using Personal Capital? If so, I’d love to hear your experiences with it.