Years ago, when I was tracking my net worth, I looked for a software solution that would grab data from over a dozen sources. Banks, brokerages, credits cards… all the classic areas one would expect my net worth to reside.
There was never a great solution.
So I settled with Quicken.
Budgeting was, and continues to be, important but my priority was on tracking my net worth and recording how it changed. I wanted to understand my spending but also where I was financially, and Quicken did an adequate job.
I would eventually abandon Quicken for Mint, which would later be acquired by Quicken's parent company Intuit, but it wasn't perfect either. It tracked my expenses well but did a poor job with my investments. I wouldn't find a better solution until Personal Capital came along (you can read my review of Personal Capital).
(to be fair, Personal Capital is not perfect either… but my only complaint is that it doesn't automatically sync with TradeKing – I just track a portfolio of holdings that Personal Capital updates independently)
Seven Reasons Personal Capital Is Better
1. Personal Capital exists entirely online – there's no software to download.
It also means that it was designed specifically for the internet and takes advantages of all the technological advantages of the internet. It's just as good on a mobile device, like your phone or tablet, as it is on a desktop computer.
It also means that there are no local files that could be lost, corrupted, damaged, or otherwise affected. You can't lose your data in one fell swoop as easily when it lives in the cloud.
2. Personal Capital is also free with no need to update software, since it lives on their servers. Quicken costs money and needs to be updated periodically.
3. Here's a big thing — both integrate well with a variety of financial institutions but from time to time, those integrations will break. It's just the nature of how the world works. Personal Capital can update their software on the fly while you'll need to update Quicken's software to get it to work. This may seem like a small issue but it's bigger than you think.
In fact, do a quick Google search for “quicken problems” and you'll see a lot of why updating software is so important.
4. Personal Capital is more than a tool to keep track of your finances. It can also help provide direction and guidance, using professional and technological means. Personal Capital makes money with professional advice to those who have significant assets, the rest of us get the software for free. What this means is that if you decline their advisory offer, you can still use a litany of automated tools to analyze your finances.
5. How many people are using Quicken compared to other tools? The numbers are dwindling as people become more comfortable using tools online. In fact, the former parent company of Quicken purchased Mint, an online budgeting tool, for $170 million in 2009. It's just so much more convenient to use an online tool.
6. Finally, Intuit doesn't even own Quicken anymore! (Reason #5 may have something to do with it!) They sold the software to H.I.G. Capital, an enormous private equity firm. You do the math on that one.
7. It works. It's as simple as that!
Do you know how many businesses market themselves as being able to fix errors in opening Quicken, Quicken running slowly, unable to connect to servers or installation problems with Quicken, or printing issues, or restoring backup files or simply upgrading errors? Quicken was popular so it makes sense that there are now dozens of companies that want to fix synching and setting up Quicken.
#1 Reason Why I Switched from Quicken to Personal Capital
When it comes to tracking my stock market investments, the difference is clear. The integrations ensure that I never have to mess with syncing up or download/upload Excel files or csv tab-delimited comma-delimited headache-delimited files, it just works. I can spend my time on value added activity, not head scratching activity.
The analytical tools give you a quick snapshot – which is what these tools are meant to do! They're supposed to make your life easier so you can spend brain energy on the hard stuff – deciding your allocations, ensuring you're diversified, and how things need to shift around to make that the case.
Personal Capital sets the table, you just have to eat.
How do they make money? Personal Capital earns money from financial advisory but you don't need to use it if you don't want to (I don't). I periodically peek at their set of investment related tools just to see where I'm at. I use Personal Capital as a tracking and reporting tool for net worth but those tools are icing on the cake. Oh and that cake is free.
Give it a try, it's free, you have nothing to risk!