Things We Like – Personal Capital

by | 19Jan2018 | Things We Like | 0 comments

Step 1 in the MilitaryMillions Steps to Financial Security is Start Tracking Your Net Worth. Our favorite tool for this is Personal Capital. Once you create an account on the site and load all of your account information, you’ll get a continuously updated dashboard of your financial information/data. You’ll be able to see your consolidated cash flow, investment performance, and net worth. You can’t effectively build your net worth unless you know what it is and start tracking it, so let’s talk about some of the upsides and downsides of using Personal Capital.

Upside – Flexibility

In the case of Was-In’s family, they have a couple of 401(k)s, an IRA, 529s for each child, some after tax investments, a home mortgage, a couple of credit cards, separate savings and checking accounts, and some other odds and ends. Personal Capital links to all of these and lets them see what’s going on all in one place.

In my case, I have four USAA checking or savings accounts, three Thrift Savings Plan accounts, a Vanguard individual 401(k), two Vanguard 529 accounts, four Vanguard IRAs, a Vanguard taxable account, a Vanguard Donor Advised Fund, a Fidelity Donor Advised Fund, two credit cards, and the value of my house. Aside from the very rare need to refresh the account login information, Personal Capital shows me all of these assets and updates them whenever I log on.

Downside (For the Do-It-Yourself Financial Planner) – They E-mail and Call You

They say that there is no free lunch. In the case of Personal Capital, the price you pay for using their free website is that after you sign up they will periodically contact you to schedule a free personal consultation. These e-mails and phone calls occur every 1-2 months and are easily dealt with, so I don’t think this is a huge downside, but they do occur and I would be remiss if I didn’t tell you about them.

Upside – Automation

All of the magic that happens on Personal Capital happens automatically. My accounts refresh on their own. It even has a neat feature where it will allow you to link your real estate holdings with Zillow, automatically refreshing how much they are worth. I know many will debate whether or not the value of a house is accurate on Zillow, but I’m not going to complain about an automatically updated value for my personal residence that is at least a decent ballpark estimate.

Downside – One More Site That Could Get Hacked

You have to create a username and password to use their site, and to link all your accounts you need to enter the usernames and passwords or all of those sites. They use encryption and offer two factor verification for login, so this is only a modest risk, but nowadays it is a risk of all financial websites like this.

Upside – So Many Tools in One Place

Personal Capital has so many cool features all located in one place. Do you want an on-line budgeting tool? Done. Do you want to be able to see your monthly cash flow? Easy. Do you want to see your personal investment performance? No problem.

The coolest feature that I use is their very flexible retirement planner. For example, I’ve got mine set for a military retirement with pension at age 56, I’ve got our Social Security starting at 70, our annual savings rate, our current savings, and our desired retirement spending level all personalized. It runs a Monte Carlo simulation, and voila! It tell me this:

It also has all sorts of graphs, charts, and tools that it will display if you want, like this one:

Upside – A Free Second Opinion

If you want a window into their investment management services and how they’d approach your assets, you can use their Investment Checkup and get a free second opinion. Here’s what it said about my investments:

Sounds like I could improve my portfolio. If you click on the “How Can I Improve This?” link it tells me to investment slightly more in alternative investments (like commodities and Real Estate Investment Trusts or REITs) and weight my stock holdings more toward the US than international:

I believe in the Vanguard approach, which is keeping life simple with just stocks, bonds, and cash. Plus, I do a 60:40 split between domestic and international equities like Vanguard advocates. What they are suggesting is just a slightly different approach which you can take or leave. In this case, I’m leaving it, but their second opinion cost me nothing!

Upside – Find Out if You’re Getting Ripped Off With Their Retirement Fee Analyzer

Once you link your retirement accounts, you can run their Retirement Fee Analyzer. It will tell you if the fees on your retirements plans are ripping you off.

As you can see, because I use the Thrift Savings Plan and Vanguard exclusively, my fees are exceedingly low at 0.05%, well below the benchmark of 0.50% they set. I’m sure there are many people out there, though, who would not be so lucky. Using this tool is one way to find out.

Upside – Get Advice if You Want It

We are do-it-yourself investors here at MilitaryMillions, but if you’re not you can use their services, which are a hybrid model between completely automated robo-advisors and a personal financial advisor:

The Bottom Line – We Love Personal Capital

I’ve never found a more useful tool than Personal Capital. Yes, the e-mails and phone calls have the potential to be annoying, but they are well worth it to have access to all of my financial information in one place with all of these tools available. If you’re interested in trying it out, sign up here and support the blog at no cost to you.

Personal Capital

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