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Personal Capital Review – Track Your Finances for Free

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Personal Capital ReviewI’ve been using Personal Capital to track my finances for about 4 years now and it has been an invaluable tool in our journey to financial independence. Personal Capital is a free “account aggregator” that will help you track all aspects of your finances in one place. I use the site to track our net worth, account balance, investment fees, and asset allocation. You can also sign up for the optional wealth management service if you need a financial advisor. I’ll focus on the free services and touch on the investment management at the end.

Personal Capital has come a long way since I started using them in 2012. Now, over a million people use Personal Capital to track over $245 billion. When I first signed up with Personal Capital, the site was still new and it had a few problems. I couldn’t link my local credit union and my 401k, but that was quickly remedied. Now, you can link pretty much any bank and online stock brokerage to your Personal Capital account. However, there are still a few accounts that do not link well. The Treasury Direct website seems to be the major one that does not work with Personal Capital. This is where we have our I Bonds. Being a federal site, the security is airtight and it doesn’t play well with any account aggregator. I created a manual entry for I Bonds and that works well enough because the value of the account does not change much. The other sites that I couldn’t link to are KickFurther and Digit. These sites are relatively new, so I understand. They are a very small part of our net worth so it isn’t a big deal to me.

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Let’s go through all the features at Personal Capital.

Net Worth Tracker

Despite a few shortcomings, the net worth tracker works very well. I could get a quick snapshot of our finances without having to log on to every account separately. Our bank accounts, brokerage accounts, retirement accounts, college savings account, P2P lending account, PayPal, credit cards, mortgages, and real estate properties are all accounted for. Yes, you can link to Zillow to keep track of value of your homes. That’s the spike you see at the end. Portland real estate is on fire and it is inflating our net worth a little bit. It is gratifying to see our net worth increase overtime.

Cash Flow Tracker

Actually, I don’t use the transaction tracker much. Our finances are just too complicated. On the income page, there are 443 entries for the last 30 days. Most of these are small payments from my P2P lending account at Prosper. In addition, there is income from dividend, interest, rental, business, and Mrs. RB40’s job. The spending page is a little better, but there are still a bunch of business expenses. Perhaps I shouldn’t have linked my business accounts. In addition to cash flow tracking, you can also see upcoming bills and their due dates. Lastly, I heard that they are planning to add a budgeting tool soon. That would be a helpful feature to many users.

Anyway, I prefer to do my accounting the old fashioned way – once a month on an excel spreadsheet. It’s just easier to check the monthly statement and manually enter the monthly gains/losses. The transaction tracker probably works better for people with fewer accounts.

Stock Portfolio Tracker

The stock portfolio tracker is a way to quickly check up on your total portfolio. I like this one because I can get a lot of information from the aggregate of my accounts. Previously, I kept track of our asset allocation on a spreadsheet and it takes a lot of manual data entry to get a big picture. Personal Capital made this easy by putting everything in one page.

I can see that our current asset allocation is mostly in line with my target asset allocation. This tool will be very useful when we have a major stock market correction. I can quickly check if our asset allocation gets out of whack and then rebalance accordingly. If you’re new to investing, Personal Capital can help you come up with a target asset location. We’ll talk more about that a bit later.

I can also quickly check how our total portfolio performs against various benchmarks. As expected, our portfolio performs somewhere between the US Bond market and S&P 500. I don’t check this very often because we invest for the long term and short term performance shouldn’t dictate how we invest.

Here is how our US investment is spread throughout each sector. The idea is to spread your investment among different sectors to improve your diversification. Each sector behaves differently in various economic conditions so you don’t want to concentrate all your investment in one sector. I encourage you to read up on “Modern Portfolio Theory” to learn more about sector weighting. Our US portfolio has been habitually low on utilities, communication, and basic materials. I guess I should sell some stocks in the consumer defensive sector and spread the cash out a bit, but I just hate selling so I keep putting it off. At least, we are not overweight in technology and financial services. This is probably where a financial advisor would be helpful to push me to optimize our portfolio in a timely manner.

Investment Checkup

The investment checkup tool has expanded quite a bit since I signed up in 2012. Back then, I think they just showed how your portfolio stacks up against the target asset allocation. Now, you can get a comprehensive view of your portfolio and receive some advice from Personal Capital’s algorithm.

First, Personal Capital will calculate a target asset allocation based on your profile. The target asset allocation is based on age, risk tolerance, and other factors. There are 11 different levels of target allocation starting from Capital Preservation to Aggressive. Based on my profile, they recommended the “Growth” target for me. This is #9 out of 11 and I’m comfortable with it. In my 20s, I’d probably go with the most aggressive target which has very little bonds and more stocks.

You can also see the following in this Investment Checkup screen.

  • Historical Performance – See how your current allocation performs against the target allocation. I don’t pay too much attention to this because the back testing is static. Your asset allocation will change depending on your risk tolerance which usually decreases as you get older. Our bond holding is a bit high right now because I think the stock market will crash soon. I plan to sell the bond and move some cash into the stock market at that point.
  • Future Projections – Personal Capital uses the Monte Carlo simulator to project how much your portfolio will be worth at the time of your retirement.
  • Risk & Return – In this section, they construct an “efficient frontier” graph according to the modern portfolio theory. This balances the level of risk and return to maximize your performance at the level of risk you are comfortable with. Basically, you want the X to be near the green O, the target allocation. See the graph below. My X is a bit behind the target, but that’s expected because we have more bonds than recommended at this time.

  • Allocation Comparison – The algorithm will check your asset allocation, compare it to the target allocation, and make a recommendation. It tells me to sell bonds and buy US stocks. This is a good reminder to rebalance your portfolio.
  • The Stock Tab – You can take a closer look at your individual stocks.
    • Concentration – You can see your largest individual stock positions here. I think it will flag a risk if any single holding is over 3% of your portfolio.
    • Sector – You can check your sector weighting against the S&P 500 and the tactical weighting strategy.
    • Style – Here, you can see check your asset class allocation vs the S&P 500 and the tactical weighting strategy. This one is pretty useful because you don’t want to put all your investments in one asset class. See the image below.

  • The Cost Tab – Personal Capital will go over your total portfolio and flag any high fund fees. We pay about 0.07% each year in fund fees which is pretty good.

Whew, that is a lot of information. I only go over the investment checkup every 6 months or so. All this stuff shouldn’t change much from day to day anyway.

The Retirement Planner

Personal Capital released the Retirement Planner in 2015 and it quickly became my favorite part of the site. The Retirement Planner is a great retirement calculator that takes real time data into account and you can add many parameters.

From the image above, you can see that our portfolio will slow down when Mrs. RB40 retires at 45. Next, it will really take a hit when RB40Jr goes to college for 4 years in 2029. We’ll bring it back up when we sell our rentals and take profit at age 61. We’ll be home free once Social Security benefits kick in. In the median case, we’ll end up with over $6 million when we’re 93. In the 10th percentile case, we still will have around $2 million left. Pretty cool, isn’t it?

Here are all the parameters I entered into the retirement planner.

Income Events

  • Savings – $1,350,000 today with no more additional savings in the future.
  • Social Security – $17,000 per year at age 67.
  • Social Security (Spouse) – $17,000 per year at age 67.
  • Rental – $5,000 per year for 20 years. This is a bit optimistic…
  • Blogging – $40,000 per year for 20 years.
  • Dividend – $11,000 per year.
  • Sell Rentals – $1,000,000 at age 61. This might be too optimistic too….

Spending Goals

  • Retirement Spending – $52,830 per year starting at age 45, Mrs. RB40’s retirement date. This value is pulled from our spending data.
  • Health care – $12,000 per year for 15 years starting at age 45. This is probably too high. I will need to modify this number in a few years when we see the real cost. Health care is so crazy here in the US.
  • International Travel – $20,000 per year for 30 years starting at age 46.
  • College – $80,000 annually for 4 years, starting in 2029.

The retirement planner is the best free retirement calculator on the internet. It is easy to modify various parameters and see how they could change your retirement budget. All in all, I really like this recently added feature.

401k Fee Analyzer

You can see how much fee you are paying in your retirement accounts in the 401k Fee Analyzer.

We pay about 0.15% every year in fees. That’s pretty good, but the fees still add up to $124,781 over 23 years. That’s a lot of money… I paid nearly ten times the fees when I first started investing and I’m really glad we moved to low fees index funds. The fund with the highest fee in our account is VNQI, Vanguard Global REIT. VNQI’s fee is 0.35%. This might be a case of over-diversification. I probably should just move everything to VNQ, the US REIT, which has performed much better over the last few years. I’ll put this on my to-do list.

Investment Management Service

Whew, that was a lot of things to go over. It is fantastic that we receive this much benefit for free. Technology is really great, isn’t it? How does Personal Capital makes money then? Personal Capital is a Registered Investment Advisor (RIA) and they will offer to manage your investment for a fee. This service is available to investors with at least $25,000 in investable asset.

After you signed up for a free account with Personal Capital, they will contact you to set up a complimentary financial planning session. I went through the free financial planning session and it was a good experience. They didn’t do a hard sell or anything like that. In the end, I didn’t sign up for the investment management service because I like DIY when it comes to investing. If you’re not interested in the financial planning session, you can just turn them down. They are not pushy about it.

The investment management fee is a little lower than what traditional financial advisor charges, but higher than other pure “robo” advisors such as Betterment. You get a human advisor at Personal Capital. In addition to helping you manage your investment, they can help figure out insurance coverage, home refinancing, college savings, retirement planning, and estate planning. If you need help managing your wealth, Personal Capital might be a good fit for you.

  • Up to $1 Million — 0.89% Annual Fee
  • $1 Million to $3 Million — 0.79% Annual Fee
  • $3 to $5 Million — 0.69% Annual Fee
  • $5 to $10 Million — 0.59% Annual Fee
  • Over $10 Million — 0.49% Annual Fee

Security

“Our highest priority is keeping your financial data safe and secure. We use multiple layers of security, in every component of our systems, to keep your accounts and your money safe, and your information private.”

Security is a huge concern in this day and age. It is scary to have all your financial information in one site no matter how strong the security is. The account information you enter in Personal Capital are stored with encryption and they should be safe. Personal Capital’s encryption is rated A by world-renowned Qualys SSL Labs and it is stronger than many banks’ security.

You must authenticate each device that accesses your account via an email or call back. This is good because you’ll know when a strange device is trying to access your account. Lastly, you can’t move money in and out of your linked account so that’s reassuring.

Please contact Personal Capital directly if you have questions about security.

I Recommend Personal Capital

As you probably can tell, I like Personal Capital a lot. I log on every few days to check my balances and glance at our net worth. Personal Capital is also very useful when I need to check our asset allocation. I only do that a couple of times per year, though. The retirement planner is really great whenever I want to add a new variable to our retirement calculation. Personal Capital saves all the data so I don’t have to redo everything from scratch like I had to with other retirement calculators. They also have a mobile app, but I prefer the bigger display in the website version because it is just easier to work with. The free features are very useful to me and I think it is great that they are adding more features every year

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All in all, I recommend Personal Capital for anyone who wants to get a better handle on their investments. I can’t rate the paid investment management service because I haven’t used them. The complementary financial planning session should give you a good feel for the wealth management service. If you use them, please share your experience.

You can sign up with Personal Capital for free through this link.

Do you have an account at Personal Capital? What do you think of their free tools?

Disclaimer: We may receive a referral fee if you sign up with Personal Capital through the links on this page.

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{ 35 comments… add one }
  • The Green Swan June 13, 2016, 4:17 am

    I totally agree, it is a fantastic and very dynamic tool. Similarly, I started using it shortly after it launched and have loved it because it allows me to track my financial picture much more efficiently. Thanks for the review.

    • retirebyforty June 13, 2016, 10:39 am

      I like tracking everything on a spreadsheet, but it isn’t a very efficient use of my time. Now, I update my spreadsheet just once a month. When I was working, I did it almost every day when I was on break. Personal Capital is really great and I hope they keep it free for a long time.

  • ST June 13, 2016, 4:40 am

    Great blog.

    However I have some issues with Personal Capital.

    How do you link your accounts with them?
    Do you have to give Personal Capital your account numbers, usernames and passwords, and PINs?

    Most banks have clauses that state that you must not share your login details with anyone or any company… so using Persnal Capital would mean a breach of the bank’s terms and conditions and they would close your account.

    Another thing that’s confusing is that the FAQ says that Pershing Advisor Solutions holds your investmant money. Does that mean that special rules regarding taxation, or account limits will be harder to adhere to? I.e. if you are allowed only one investment account and you now need to sell and close the existing one before you can use Personal Capital?
    Can they track annual subscription limits for investments?

    I see a number of other personal finance bloggers posting about PC but I dont know if it’s too good to be true.

    • retirebyforty June 13, 2016, 10:48 am

      You link your bank accounts by giving them your user ID and password. No need to put PIN.
      I have never heard of that clause. I will check it with my bank. That means you can’t use any personal finance software like Quicken or Mint.

      I haven’t used the investment management service so take this with a grain of salt. You probably should contact Personal Capital directly. From what I understand, Pershing acts like a brokerage. I don’t think there are special rules regarding taxation. The last time I talked to the financial advisor, she said I could transfer my taxable account to Personal Capital and keep my 401k at my company. Ok, I see your point about taxation. They might sell your investment and that will be a taxable event. I’ll see if I can get an answer from them.
      Thank you for your comment.

  • Apathy Ends June 13, 2016, 4:44 am

    Just started using personal capital again, I stopped for awhile when they were having issues connecting to my 401k but that seems to be resolved – great tool and I think they raised more $ recently so it might get even better!

    • retirebyforty June 13, 2016, 10:48 am

      They improved quite a bit since 2012. I’m sure they’re glad to have you back.

  • Physician on FIRE June 13, 2016, 4:45 am

    I have been using it for about a year and a half. All of my accounts sync well. It’s great to see the ups and downs with everything in one place. The asset allocation tool is useful, too.

    I also went through with a portfolio review. I knew I wasn’t going to sign up for the service, but wanted to see what the advisor thought of my portfolio. He was actually very complimentary.

    Best,
    -PoF

    • retirebyforty June 13, 2016, 10:49 am

      I had a good experience with the portfolio review as well. They suggested that I fix the sector allocation, but it is just taking a very long time to do so at my pace. It is very nice that they didn’t try to hard sell the service.

  • Mr. Tako @ Mr. Tako Escapes June 13, 2016, 6:06 am

    A very thorough review Joe! I like that you’re honest about where you do and don’t use Personal Capital for your finances.

    Personally, I’ve never used them. We stick to spreadsheets.

    • retirebyforty June 13, 2016, 10:51 am

      I tried really hard to like the cash flow tracker, but it is just too detailed.
      You should try them out. The tools are actually very useful. You already got a handle on your finance so I guess you don’t really need them. 🙂

  • Rachel @TheLatteBudget June 13, 2016, 6:42 am

    I haven’t used them, but I will definitely have to check it out! Sounds like a great way to have a visual of all your financial activity. Thanks for the info!

    • retirebyforty June 13, 2016, 10:52 am

      The graphics are very helpful. They are just a bunch of numbers in my spreadsheet so it’s nice to see the same information visually. Try them out! 🙂 Thanks

  • Justin June 13, 2016, 7:11 am

    I use personal capital and enjoy it as a supplement to Mint.

    One question I have is, $80k PER YEAR for college for your son? Sounds quite high.

    Portland State University quotes between $2-$3k for tuition per year

    • Mike H. June 13, 2016, 7:48 am

      I’m afraid I’m going to have to call BS on your numbers. That $2-3k is actually per TERM, not per year. So double that figure. Don’t forget housing/books/food/entertainment/bail money. Cappex estimates a $20k price tag for 1 year at Portland State. Add in roughly 13-15 years of inflation – tuition inflation too – and, well, $80k/year is still a lot to plan for.

      But let’s take USC or Stanford, for instance. Right now, USC is estimated at $60k/year. Stanford at $56k/year. In the midwest, Notre Dame is $58k and University of Michigan at $51k.

    • retirebyforty June 13, 2016, 10:54 am

      That’s the estimate for how much a 4 year public college will cost in 13 years. A lot of that will be just the cost of living – apartment, food, transportation, and such. It would be great if he goes to PSU for a couple of years and then transfer to a better school. Living at home would save a ton of money.

  • Mike H. June 13, 2016, 7:33 am

    I use Personal Capital to link my accounts and let me see in real time how things are going. As a cash flow tracker, it isn’t so great; every month I have to aggregate my dividends manually, and I got tired of continually reclassifying my income and spending. If you’re interested in cash flow, I think Mint might be better.

    But for getting an overall picture of your investments and allocation, Personal Capital is amazing.

    • retirebyforty June 13, 2016, 10:56 am

      I used Mint for a while before switching to Personal Capital. It is a bit better, but I don’t want to have 2 account aggregators. I’m pretty good with doing the cash flow on my spread sheet once per month. The process help me evaluate my spending. Personal Capital is amazing and it’s free. Technology is good.

  • Fiscally Free June 13, 2016, 7:47 am

    After using Microsoft Money and then Quicken for many year, I recently tried Personal Capital and was pretty impressed. It is very simple, yet provides a comprehensive set of tools and stats.
    However, you should probably sign up for it through my site since this two sentence review was so helpful. 😉

  • Pia @ Mama Hustle June 13, 2016, 8:58 am

    I love Personal Capital! Mint never caught on with me, as I prefer a higher level view of spending, which PC offers. Also, seeing the big picture has made me more comfortable with the hops and dips of my 401k. A blip that seems MAJOR in my 401k account looks tiny in the overall view PC offers.

    • retirebyforty June 13, 2016, 10:58 am

      Mint was okay, but Personal Capital is so much better for investors. Right, the big picture usually keeps you a little calmer. Our bonds and low cost index funds act as a ballast for our portfolio.

  • Tyler DeBroux June 13, 2016, 9:23 pm

    Great review! I currently use personal capital and love their free service!

  • Jamie June 13, 2016, 11:16 pm

    Your investment expense is extraordinarily low. What mutual funds or ETF do you use?

    • retirebyforty June 14, 2016, 6:47 am

      We have low cost Vanguard funds in our retirement accounts. I think Fidelity also has very low fees.

  • Robert Paulson June 14, 2016, 4:44 am

    Thanks for your advice regarding Personal Capital. Honestly I’ve never used it but I’ll give it a try for sure.

  • Dividendsdownunder June 14, 2016, 4:47 pm

    Interesting to read about considering how many people I’ve seen talk about PC. I’m guessing it doesn’t work for Australians?

    Tristan

    • retirebyforty June 14, 2016, 11:47 pm

      Sorry, I’m pretty sure it is US only at this time.

  • cato June 15, 2016, 12:32 pm

    I used PC for a year and liked it, but then they became very aggressive about their advisor services. Their aggressive approach really upset me. I killed my account immediately and never went back. I have better tools anyway via Excel.

    • retirebyforty June 15, 2016, 2:35 pm

      Sorry to hear that. Did they call you or something? Luckily, I haven’t had to deal with the aggressive sales tactic yet.

      • cato June 15, 2016, 5:45 pm

        Yes, they called me for two weeks. I made the mistake of finally answering. When I patiently listened to the pitch and said “no thanks” six times in a row I was met with a series of scripted high pressure responses. I explained I am really trying hard not to be rude and hang up as we live in a world where rude has become the norm. Unfortunately the caller was unrelenting. I had no choice. I hung up. I was sad, mad, and immediately delinked and canceled my account. That was about four months ago and I am happy I did it.

        • retirebyforty June 16, 2016, 9:28 am

          Wow, I guess they are stepping up their sale pressure recently. That’s really too bad. I guess they have to start making money for the investors.
          Thank you for the update.

        • nullkerf April 20, 2017, 10:21 am

          I just have a very similar experience. They call 3-4 times about once per week which I let go to voice mail. The android app eventually sent a notification allowing me to schedule an appointment which I finally relented thinking it would be good to talk to the financial adviser. The sales pitch was immediately fairly strong explaining how they can create a better “fund” than index funds by creating a portfolio of individual stocks. I said that I dislike buying individual stocks and they adviser started being very pedantic about how I already invest in stocks through vanguard index funds. He was very condescending making me feel like I didn’t know what I was doing. I made the mistake of sharing my FI/ER goal and he just crapped all over it making me feel like my goals were not possible. I finally said “I don’t think this is going to work out” and the he just said “Ok, good luck” and then “click” hung up on me. While the online interface is good I’m pretty upset with the financial adviser. They’re are definitely not on board with the FI/ER movement.

    • Cdub October 30, 2017, 8:29 pm

      Care to share the excel tools?
      Or anyone have a link to excel tools for similar analysis/forecasts?

      I’m reluctant to combine all accounts within PC.

  • Mori June 15, 2016, 10:57 pm

    Thx for the article, I’ll probably check it out soon. I’ll use your link if I do ;).

    Is this like mint? One problem I’ve had with mint is that you can’t (by design) link accounts on which you have two-factor auth. I suspect it’s the same here. I’m always kind of iffy about giving my bank passwords to third parties, even though security is top-of-mind for them.

    • retirebyforty June 16, 2016, 9:31 am

      I think the linking process is similar to Mint. Two factor authorization probably won’t work. I’m not sure, though. I don’t like giving out my passwords either…

  • Thad June 16, 2016, 1:19 pm

    I like using PC quite a bit for the net worth and investments. For my daily cashflow and budgeting, I have been very pleased with my bank’s tools. I use USAA for my banking, and they have a great cashflow tool called Track My Money. I tried Mint as well, but I thought USAA’s was better as I could do more with adding categories and setting rules for recurring transactions to be automatically categorized how I want.

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