How we use Personal Capital to track our money

Published January 11, 2016   Posted in How to Think

I don’t say this about many financial companies out there, but Personal Capital‘s online money management system has seriously improved the way that my wife and I track our money (Vanguard has a similar system that I love to death, but of course, they only track Vanguard assets!).

Pinterest: How we track our net worthIn the beginning, we used Mint, and while Mint did offer several features that we found helpful to our budgeting process, Personal Capital was designed for a different purpose, and we love what it does for us. Think easy visibility into your net worth and market diversification.  Also think consolidation of every one of your investment and bank accounts into a single, colorful portal.

It’s all 100% free, too. 

Let’s take a look at how the system works, complete with pretty screen shots.

Cash Flow

Personal Capital tracks cash flow through all of your money sources. If you have five different bank accounts, Personal Capital will consolidate each and every transaction, categorize them and aggregate every money move that you make together on a single page.

Transactions can be viewed together OR separately by income and spending.

Screen shot: Shows income throughout all accounts

Personal Capital: Cash Flow: Income

Below the graph, each income transaction is listed, complete with the account that it came from, description of the transaction as well as the category of the transaction. Personal Capital does a pretty good job at guessing the category, but these values can be changed (to include future transactions) by simply clicking on the category value (in the above scenario, “Investment Income”).

Screen shot: Shows spending throughout all accounts

How we use the Cash Flow feature

The Cash Flow graphs and charts make it absurdly easy to gain incredible insight into the flow of our cold hard cash throughout the year. By changing the timeframe of the graph (via the top right of the graph display), we get instant visibility into any spikes or dips in income or spending. We can check month-to-month grocery expenses without an ounce of tracking through a separate spreadsheet (although my wife still does track individual grocery purchases, like a boss!).

Portfolio

Personal Capital‘s portfolio tracking capabilities is where it truly shines, and I haven’t seen a single web-based application capable of displaying information as succinctly and easy to follow as this.

Through the Portfolio pages, investors can track their Holdings, Balances, Performance, Allocations and your US Sector holdings in the market.

Screen shot: Shows holdings in your portfolio

Personal Capital: Portfolio: Holdings

On the left, the “You Index” tracks your own personal performance during the current day as well as the past 30 days and is represented by the blue graph line. Click any of the other boxes (i.e.: S&P 500, DOW, etc) to compare your performance to other markets. In the above screen shot, I have S&P 500 selected.

Screen shot: Shows balances in your portfolio

The balances screen makes it easy (and quite colorful) to view portfolio balances from your individual investment accounts. Each are color coordinated and listed out below the graph. In the screen shot above, I only captured our Vanguard account.

Screen shot: Shows performance of your portfolio

The Performance chart is one of my favorites because of how easy it is to quickly look at a high level view of your overall market performance. Note that I have selected 90 Days at the top right of the graph (30 Days is the default). Each investment account is listed below the graph, though I only captured our Vanguard account.

Screen shot: Shows allocation of your portfolio’s money

Personal Capital: Portfolio: Allocation

The Allocation charts are a wonderful way to track where your money is invested within your portfolio. The default view displays your entire portfolio, but each colored section is selectable for a zoomed in look at specific areas of your money.

For example, if I select the U.S. Stocks category, the next chart looks like this:

Screen shot: Shows the U.S. Stocks allocation of your portfolio

Personal Capital: Portfolio: Allocation: U.S. Stocks

First, notice the breadcrumb trail at the top left of the chart, which provides an easy way to navigate back to your larger asset picture. In addition, each individual box on this chart is clickable as well, further diving you into your portfolio by displaying individual investment funds along with their associated percentages that they represent within your larger portfolio.

Screen shot: Shows US Sectors represented within your portfolio

Personal Capital: Portfolio: US Sectors

Honestly, I don’t spend a lot of time on this chart because it stays pretty consistent, but it does nicely show your diversification throughout the U.S. sector of the stock market.

How we use the Portfolio feature

The Portfolio graphs within Personal Capital are where this system truly shines. The ability to effortlessly fly through your entire investment portfolio with just a few mouse clicks with fully customizable graphs and charts is amazing, and I love breezing through them every now and then – whenever I want a portfolio update.

All of these graphs and charts are updated daily and provide the most up-to-date picture of your entire financial life. I do spend the majority of my time focused on Performance.

Our Net Worth

My favorite screen is the default dashboard screen that gets displayed after first logging in. It shows your current net worth snapshot as well as current market conditions. It also displays a snap shot of your holdings, cash flow, portfolio balances and allocations.

Screen shot: Main dashboard showing our net worth

Personal Capital: Dashboard: Net Worth

This screen shot shows the net worth and holdings portion of the dashboard. Your cash flow, portfolio balances and allocations graphs are displayed further down the page.

How does Personal Capital capture your financial life?

Connecting a new account to Personal Capital

Adding a new link in Personal Capital

Personal Capital links to your financial institutions and pulls information straight from the source. These connections are made after the user (i.e.: you and me) manually provides his or her username and password used to access the external banking or investment system.

For example, I have both Vanguard and Fidelity accounts that I can log into online. Through Personal Capital, I provided my login credentials to those web sites, and now Personal Capital connects to them every day and pulls the latest information.

What type of accounts can you link to Personal Capital? Any financial institution like banks, investment companies and mortgage lenders. In fact, Personal Capital will even track your current home value and include that in with your net worth calculation. Just give it the address of your property (or properties!) and it will grab (and track) the current Zillow estimate.

What about security? It’s true that we are providing incredibly sensitive financial account information to Personal Capital, and this is just something that we need to be comfortable with in order to use the system to its full potential.

How does Personal Capital make its money?

It is 100% free to use Personal Capital for everything that I have shown in this blog post. However, Personal Capital still needs to bring in revenue somehow.

Personal Capital makes its money by offering financial advisor services to all account holders within their system. In fact, your financial advisor is listed on the Dashboard page with a telephone number, working hours and even their LinkedIn profile page. They want you to call and schedule an appointment because they charge for this service.

In the interest of full disclosure, we have never used Personal Capital’s financial advisors and cannot vouch for their knowledge or experience. We did get called a couple of times after we first signed up for an account, but we indicated our disinterest in this service and they promptly stopped calling. All companies should operate like this.

What Personal Capital is NOT

Personal Capital does an incredible job simplifying your asset picture. However, it only provides a read only view into your financial life. You cannot buy and sell stock through Personal Capital, nor can you change any information or settings (to include the username and password) for any of your external money accounts. Personal Capital’s job is to simply pull and display. It does not push updates or provide a way to directly invest your money.

Do you use Personal Capital? If so, how do you take full advantage of what the system provides?

We track our net worth using Personal Capital



Comments

24 responses to “How we use Personal Capital to track our money”

  1. Just starting using Personal Capital about 3-months ago. I really like having all my accounts in one place. I’m still digging into all their features. So far so good.

    • Steve says:

      Thanks Brian, I agree – having everything in one place makes visibility into your money situation so much easier. I like simple things, after all. 🙂

  2. I recently started using Personal Capital and I LOVE it. I don’t know why I was resistant to the idea for so long. I still use a spreadsheet to track expenses because I like to code them in a particular way (and it makes me more likely to be really careful about my spending if I know I have to enter my purchases into a spreadsheet manually at the end of the day), but I love only having to log into one account to see everything at once.

    Also, I did not understand until now how they made money — good to know!

    • Steve says:

      Honestly, we were kinda resistant as well at first. I think it was because it seemed like just another web application that we’d have to sign up for and import all of our financial accounts into, and it seemed like more of a chore than anything. 🙂

  3. We are making the switch from Mint to Personal Capital. Thanks for showing in-depth the advantages of this tool!

  4. Thanks for sharing, I have signed up for personal capital but have not used it yet. Since I use Mint, I thought most of my needs were being covered – but I like the screen shots that you included here. They help me see some of the differences and I will try it out later this week.

    • Steve says:

      Sounds good – I think you’ll like PC. I was a Mint user as well, and while Mint is a very nice app, Personal Capital ups the ante a bit with the picture that it gives of your financial profile as a whole.

  5. I’ve used PC for about a year now. I love it. Only issue is their expense tracking isn’t that on point yet. So I have to due my due diligence when looking back at what I spent. Last month it counted my rent twice even though I only wrote one check… doh!

    • Steve says:

      Ha! Yeah, I have noticed small weirdisms too with how it records stuff and tracks it. It’s generally pretty accurate, but definitely not perfect. 🙂

  6. I love the Personal Capital tracking tools, and we actually DID talk to one of their advisers to get a pitch about using their services. Our guy seemed super savvy about all of our wacky ER particulars, including not wanting to have a lot of trades happen behind the scenes, which would cause taxable events and could mess up our Obamacare subsidies. We haven’t decided whether to go with them yet, but they certainly offered a compelling set of reasons, including better diversification and lower overall taxes than you can get with Vanguard… but with higher fees than Vanguard. My biggest frustration with PC is that USAA doesn’t link in seamlessly. So we haven’t been able to use the expense tracking as much as we’d like, because our checking account won’t load in — bummer!

    • Steve says:

      Yeah I remember your troubles with USAA – it did eventually work for us, but sometimes the way that these applications link to financial institutions are very, very strange. It works for some people and not for others.

      If you do end up doing business with PC, I’d be curious what your impressions are once you really start getting going with them. Might make good fodder for another blog post! 🙂

  7. Steve – Do you guys keep track of a budget (with categories) throughout the month or do you mainly just look at your overall spend? That is the one issue I have with Personal Capital right now is that it doesn’t really have a budgeting part in it like Mint.

    Currently I am using both Personal Capital and Mint but we are slowly shifting to more of a total spend budget (mainly because I hate traditional budgets) so I think Personal Capital will be a better fit. Mint can be overly buggy and has way too many intrusive ads that makes the experience less than stellar.

    • Steve says:

      Thias – we certainly do have budget categories that we keep track of, and while we don’t like to go “over” on a month-to-month basis, our figures are worked out primarily on a yearly basis and divided by 12 so it fits nicely into a monthly budget. Some expenditures, for example, are one-time for the year, so those months will SEEM to be negatively affected even though the spent money was accounted for in our yearly spend calculations as anticipated.

      More or less, we care mostly about total spend for the year, but use monthly budgets as a way to keep us on track throughout the year so we don’t find ourselves vastly over or under at year’s end. 🙂

  8. Yes it’s a great service that I’ve been using for 6 months now. I’m happy to view all those graphs in 1 place and feel good seeing my investment history. Good review as it’s much needed.

  9. I am a fan of the PC platform as well, it has been valuable in tracking my finances as well. I have found this to be a little easier as accounts tend to fluctuate and it does all the work of updating.

    • Steve says:

      I like the simplicity that you get with PC the best. Very little clicking around unless you actually want to. It is very straightforward and to the point, just the way that I like it! 🙂

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  11. Hey Steve, thanks sharing all of your personal using history of personal capital. It’s indeed inspiring for people to start believing in personal capital online money management platform. I’ve been using it for one year and it’s highly effective to access all of my accounts from one place.

    • Steve says:

      Thanks Carlos. Personal Capital really does make it easy to look over your financial situation, and it covers so much of what you need to know, from net worth down to individual budgeting. It’s great.

  12. John says:

    Wow great article. Personal capital sounds amazing! I’ll be downloading it as soon as I finish writing this article. It does all the things I do already do on my own in one simplified condensed version!

  13. Desi Hisab says:

    There are several money management apps that helps to keep the expenses in track and personal capital is one among them. But it would have been better if you have explained in layman’s language.

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