Wrangling finances with Personal Capital

A year and a half ago I decided I needed to simplify my financial life. For years I had been using tools like Quicken and Moneydance to keep track of my finances. It was always a bit of a laborious process involving a couple of hours a month to do some manual data entry and categorization. The financial tool landscape had changed dramatically since I started doing this back around 1997 and it was time to take a fresh look at what was available to me.

Specifically I was looking for a tool to enable me to do the following with as little manual effort as possible:

  • View my entire net worth
  • See my cash flow month to month
  • Understand how I was spending my money
  • View how my retirement and other investments were doing
  • Quick auditing of my credit card transactions

An online tool was clearly the way to go, and there are now several. Sites like Betterment and Wealthfront are looking to actively manage your investments. I don’t mind paying for a service I find useful, but I wasn’t looking for active investment help. I’d already decided to move my IRA and brokerage accounts from Ameriprise to Vanguard1 specifically to decrease per-fund overhead and management fees so these weren’t a good fit for me.

The two free tools that seemed to satisfy my needs were Mint and and Personal Capital. Both provide a wholistic view of your financial portfolio by syncing with your financial accounts, although their objectives differ a bit. Mint is geared towards helping people budget their money but has fewer tools to assist with understanding your investments. Personal Capital on the other hand is focused entirely on your investments, and while it allows you to see how you are spending your money, it doesn’t have robust budgeting tools.

I dove into Personal Capital and my experience has been overwhelmingly positive. For the first time in decades I’ve finally been able to see the entirety of my financial portfolio at a glance. It gives me great tools to see how I am spending my money (hello there, restaurants, aren’t you a money suck), understand which of my investments have high fees, and see how diversified my portfolio is across several axis (eg: asset classes, US sectors).

The Investment Checkup tool can take a look at your portfolio and given some inputs like your age, risk tolerance, and goals, can make some recommendations on how to adjust your investments to decrease risk while maintaining your investment goals. It won’t do any of the rebalancing for you, but knowing where your portfolio needs some attention is great for making small changes over the year, or a yearly rebalancing.

The Retirement Planner lets you track to a customizable retirement goal based on inputs like current net worth, post-retirement expenses, and income events (eg: expected savings until retirement, social security income upon retirement). It then runs a Monte Carlo simulation to give possible outcomes based on those assumptions. This tool is incredibly useful for setting realistic expectations on retirement age and understanding what it will take to get there.

Personal Capital makes their money off their wealth management services. The free web tool — and it really is free, no ads or anything — is a hook to get you to sign up to their advisor service which, as you would expect, has a fee based on the value of your portfolio. Expect to receive a phone call a few weeks into using the tool for an up-sell to their advisor services. One also assumes that they are using the information collected from their free web tool in aggregate as a product as well, either for themselves or others. Remember: if you aren’t buying a product from a free service, you are the product of the free service.

Overall I heartily recommend Personal Capital to anyone who already has a good understanding of investments but is looking for some deeper insights into their portfolio2. It has given me some very useful information about my financial world and helped me make some informed decisions.


1 I highly recommend Vanguard, particularly their EFTs. I am super-pleased with their business philosophy and wide selection of low-cost EFTs & mutual funds.

2 As an extra incentive, Personal Capital has a referral program right now where if you sign up from this link we both get $20.

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cpeel

I'm a gay geek techie space nerd living in Seattle, WA.

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