The first time I heard of Personal Capital, I was working as a Financial Counselor at the University of Utah. This was back in 2016 and we were working on revamping our website.
We got a call from someone in Denver, Colorado and they asked if we would be willing to place a financial calculator on our website that was created by Personal Capital. I politely declined because I had never heard of the company before and didn’t want a bunch of noise on our website.
However, I decided to create an account for myself, I connected a few accounts and then completely forgot about it for about 6 months. It felt like a lot of work up front and so I didn’t take the time to do it.
Later, I was reading a post from Millennial Money and saw that he was a big fan of Personal Capital. I decided to spend a little more time setting it up and I’ve been hooked ever since.
What is Personal Capital?
Personal Capital is an online investment advisor that believes the power of technology can make the financial services industry more affordable, accessible, and honest.
I see it as two divisions. Online financial planning and a software of free resources. I have never used their paid online financial planning services and so I’m not going to be reviewing that today, only their free tools.
They offer a free online and mobile personal finance and investment management app.
Let me point out that since creating a Personal Capital account myself, Simplifnances has become an affiliate of the company, meaning we may receive a commission for referring new users. If you decide to check it out, you’re helping support our free content at no cost to you, so thanks!
After the initial set up, it’s really just about monitoring it. Here are five things that I love about Personal Capital.
1. Visual Graphs
One of my favorite things is being able to see your financial dashboard and how it has changed day today. By connecting all of your financial accounts, it’s able to create a nice-looking picture of your finances.
If you set this up while you’re young, in ten years you’ll be able to look back and remember how broke you were and just how far you’ve come.
It also integrates with the real estate website Zillow to provide daily updates on your property values.
2. Account Aggregation
I love being able to see all of my accounts in one place. As many of my readers know, I’m a HUGE fan of the JARS Money Management System which requires six bank accounts. It’s nice to see all of those along with my credit cards, mortgage, and investments. If I wasn’t able to see all of my accounts in one place I would probably forget that some of them existed. Seriously.
It also shows you all of your spending in one place and compares that with the previous month to see how you’re doing.
3. Investment Performance
When I first set up Personal Capital, I was in business school learning about investments. I was becoming very familiar with terms like index, benchmark, blended, S&P 500, DOW, foreign markets, and so on. These terms didn’t play a role in my personal life too much though.
After connecting my investments to Personal Capital, I started understanding these terms. I was able to see how my portfolio was doing compared to the S&P 500, DOW and so on.
Before that, any time I heard on the radio how to markets did today, it didn’t really matter to me. I love being able to see the percentage change of my investments for the day and see the dollar amount change.
Each week, I get a summary email of how I did.
4. Net Worth Tracker
This goes back to being able to visually see how you’re doing. But not only that, when you track your net worth, you’re more motivated to make better financial decisions. Personal Capital has literally forced me to make better financial decisions because I want to see that graph going up. It causes me stress to see it go down.
I probably shouldn’t be focusing on this too much but because of the way I manage my money, I force myself to spend money on fun things as well. I don’t believe in being 100% extreme all the time with your savings. You have to have balance.
5. Fee Analyzer
Writers in books and blogs talk about keeping fees low but I never really knew how much I was paying in fees until I was able to see the expense ratio for each individual security.
Investment companies make it difficult to see just how much in fees you’re paying. This made it really easy to see how much money I was paying for each investment and get rid of the ones that were too expensive.
You can see that there is a lot to like about Personal Capital. The only thing I don’t really like is as soon as you have $100,000 in investable assets, their financial planners will start reaching out to you. You don’t have to work with them though unless you want to. You can politely decline and they won’t reach out to you again.
I’ve you’ve heard of PC before but have never given it a try. I encourage you to try it out. Don’t get overwhelmed at first like I did and give up. Take the time to accurately set it up and I promise it will help you make better financial decisions because you’ll understand where you are financially.
Mint vs. Personal Capital
Personal Capital and Mint’s features are quite complementary. I started out using Mint probably five years ago and found it to be great for tracking expenses and staying on top of my finances, but it lacked big time when it came to investments. I now use both because they each serve a different purpose.
I’m a big fan of Personal Capital free tools and I think it’s the best online financial software to help you reach your retirement goals. If you haven’t signed up for an account before, I encourage you to get started by clicking the link below!