Whenever my readers want to help to find the best personal finance tools, one of my top picks has always been Personal Capital. Many of you may already be using Mint, YNAB, or EveryDollar, but Personal Capital has additional tools and functions that make it the best choice in 2020 to organize your financial life.
The first thing to know is that Personal Capital is free, but because they make their money providing wealth management services to high net worth individuals, free users are able to take advantage of powerful tracking tools. More on their wealth management and investment services farther down.
But, let’s talk about that free thing for a second. You should always be skeptical when something in the personal finance world is free – there is a lot of bogus stuff out there, but Personal Capital isn’t one of them, guaranteed. You don’t even get the third party ads as you do with Mint.
M$M tip: See how they compare, Personal Capital vs. Mint: Which One is Right For You?
Overall, Personal Capital is a well-rounded personal tool that focuses on helping you plan for retirement, but it can also help you with your day-to-day planning like budgeting.
Use the exclusive M$M link to learn more and sign up for Personal Capital (we’ll both get $20 when you join)
About Personal Capital
Personal Capital was founded in 2009, and since then, over two million people have started using Personal Capital to track their assets, budget, and help them plan for retirement. There are around 19,000 clients using their wealth management program, which pairs the Robo-advisor model with human support. They currently have over $9 billion in assets under management.
The company describes itself as “A whole new way to manage your money,” and that statement is entirely true because it does something that many free personal finance tools don’t – it has a heavy focus on retirement, from helping you save on fees to tracking your progress.
What Personal Capital offers in 2021
This review is going to primarily focus on the free version of Personal Capital because that’s what most people will be interested in using, but there is a quick look at their Wealth Management services towards the end.
Your Personal Capital dashboard
After you log in to your free Personal Capital account, your dashboard is going to be the landing page that gives you a broad overview of your finances, including:
- Net worth
- Investable cash
- Cash flow
- Portfolio balance
- Retirement savings
There is also a sidebar on the left of your screen that starts with your net worth (written larger than anything else on the screen because it’s so important) broken down by assets and liabilities. The sidebar also shows information about any of your linked accounts – how it calculates your net worth – from cash in checking, investments, loan details, credit cards, etc.
Using Personal Capital’s dashboard tools
You can click on any of the boxes on your dashboard to see a more detailed picture of each area. But, let’s take a closer look at why some of these tools are important so you can see how Personal Capital can help you manage your finances in 2020.
Net worth tool
Your net worth is calculated by taking all of your assets minus your liabilities. You can choose to look at where you’re currently at, the past 30 days, past 90 days, etc. You can even break this down by asset/liability class, like credit, cash, investments, loan, mortgage, etc.
The reason Personal Capital prioritizes your net worth is that it determines your overall financial strength.
Cash flow analyzer
If you click on your cash flow, you’ll get a better understanding of how you spent your money over the past month. There is a detailed graph, but you can also see transactions from any of the accounts you link.
Each transaction is broken down into different budgeting categories, and you can even add tags to help you organize things the way you like them.
Budgeting with Personal Capital
To be completely honest with you, there may be some other budgeting apps that focus more heavily on helping you build and stick to a budget. But, that isn’t to say that Personal Capital can’t help.
Once you’ve linked your accounts, the cash flow analyzer creates a budget that’s shown on your dashboard. It lists the categories you’ve spent in throughout the month, how much you’ve spent, and if you are over or under budget – this helps you stay on track for your bigger goals.
Using Personal Capital in 2021 to help you plan for retirement
This is where Personal Capital shines over any other free personal finance software out there, and it’s honestly why I use this software on a daily basis to keep track of my finances. Let’s break down Personal Capital’s robust set of investment and retirement planning tools.
Your retirement planner pulls information from all of your connected accounts, asks about your projected savings information, current retirement savings, your age, and planned age of retirement to tell you whether or not you’re on track.
You can actually play around with some what-if scenarios (job change, having kids, saving for college, etc.) to see how each situation may impact your projected retirement age and savings. If your retirement goals look like they won’t quite work with your current or prospective financial picture, Personal Capital will give you some suggestions for getting on track.
This is essentially a check-up on your investment portfolio. Personal Capital looks at where you’ve invested your money to ensure that you’re optimizing your investments. If you aren’t, they will recommend a better mix of investments to shore up your portfolio’s long-term health.
Retirement fee analyzer
Ahhh… this is a super cool tool that can actually save you thousands or even hundreds of thousands of dollars as you plan for retirement.
Here’s why the Retirement Fee Analyzer is so helpful: many investment funds, from ETFs, mutual funds and 401(k)s come with expense ratios and/or hidden fees. Depending on the rates and how fees are charged, the smallest percentage difference can result in you either saving or keeping a significant amount of your money.
Personal Capital’s Retirement Fee Analyzer shows you how those fees affect your overall investments. There are tools to slide those fees up to and down by tiny percentage points to show you the impact on your retirement savings.
The analyzer also lets you adjust:
- Annual growth
- Employer matches
- Additional investment fees
- Projected retirement age
With each adjustment, you’ll get a better understanding of you where you stand for retirement and how to save more.
How to sign up for Personal Capital in 2021
If you’ve read all of this and are thinking that Personal Capital has something to offer you, then you’re probably wondering how to sign up. It’s really easy… all you need is an email address, secure password, and phone number to set up your free Personal Capital account today and get $20 when you join.
Why do they need your phone number? It’s used to verify your account, but when you hit $100,000 in investments, a member of the Personal Capital team will give you a personal phone call to see if you’re interested in their wealth management features. There’s probably congrats in their too.
With any personal finance tool or budgeting app, the best way to start is to gather all of your information together before you get started. You can link most of your accounts through their platform, but making a list will ensure that you don’t miss anything.
You have to link everything to get a true and accurate picture of your finances.
You will want to connect your:
- Savings accounts
- Checking accounts
- Credit cards
- Student loans
- Brokerage/401(k) accounts
- Business checking accounts (very cool for self-employed people)
- Business credit cards
- Any other loans
Using Personal Capital for wealth management
When you hit the $100,000 mark for investment assets, you are eligible to sign up for Personal Capital’s paid Wealth Management services. There are several levels of service available for a fee from 0.49%-0.89% of assets managed.
The levels of service include:
- Investment Service for up to $200k in investment assets. This includes access to a financial advisory team, tax efficient ETF portfolio, Smart Weighing™, 401(k) advice, cash flow and spending insights, 24/7 access including weekends and after hours, and support priority services.
- Wealth Management for up to $1M in investment assets. Including everything with the investment service and two dedicated financial advisors, customizable stocks and ETFs, full financial and retirement plan, college savings and 529 planning, tax loss harvesting, and financial decisions support.
- Private Client services for over $1M in investment assets. Including everything above and priority access to CFP®, advisors, investment committee, and support; investment portfolio mix of ETFs, individual stocks and individual bonds; family tiered billing; private banking services; estate, tax, and legacy portfolio construction; donor advisory funds; private equity and hedge fund review; deferred compensation strategy; estate attorney and CPA collaboration; and access to private equity investments.
Okay, that’s a lot of info to take in, but what all of that tells you is that Personal Capital has tools to help anyone, no matter where they’re at in their financial life.
Additional Personal Capital features
24/7 customer service. Whether you need a phone or email support, Personal Capital is available for both free and paid users. They’ve even helped me answer questions for my readers, so I know they have stellar customer service.
Mobile app. There is currently an app available for both Apple and Android users. While it does have a seamless interface, you’re probably going to get the most out of their web version.
Security. To ensure the privacy and protection of your financial information, Personal Capital is read-only (no withdrawals or transfers can be made) and has two-factor authentication, military-grade encryption, continuous monitoring, firewall and perimeter security, and fingerprint scanning for Apple users.
Pros and cons of using Personal Capital
Overall, Personal Capital has a lot to offer users in 2021, but here’s a quick breakdown of why you will or won’t love it:
- Their free version alone has robust investment and retirement features for average users to get a handle on the long-term health of their finances.
- You get both budgeting and investing tools that might make Personal Capital the only personal finance tool you’ll need in 2021.
- 24/7 support comes with both the free and paid versions.
- The super clean design lets you focus on your finances.
- There aren’t any ads for third-party financial companies.
- If you’re looking for strictly budgeting tools, Personal Capital might overwhelm you with the financial planning extras, and you may get more out of apps like Mint or YNAB.
- The fees for wealth management services are on the higher end.
- There is a high minimum to access their wealth management advisors, which does include Robo-advisors.
The final word on using Personal Capital in 2021
Let me sum this up by reminding you why I love and use Personal Capital on a regular basis – they offer exceptional, free tools for retirement planning. If you are behind on retirement savings or haven’t started, Personal Capital can help you develop a plan to reach that goal.
It also has robust enough tools for people working towards FIRE (Financial Independence Retire Early). If you fall into that category, you’ll love how Personal Capital can help you reduce your fees with the Retirement Fee Analyzer.
Setting up an account is free for anyone, and even if you do hit that $100k mark, you can still opt out of their paid services and while still getting a lot out of a free personal finance tool.
Start today, and sign up for Personal Capital!
All image sources via PersonalCapital.com