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Welcome to My Review…
…glad to have you along! I was looking for a way to manage my wealth in a way that was easy for me to understand and catered to MY schedule and needs.
After doing a bit of digging, I found Personal Capital. I liked this program so much I wanted to go ahead and tell everybody about it.
Full disclosure: I am not paid to give this review. It is just me talking to you as someone informing you of a great product that does it all-whether, that means managing cash flow, analyzing fees of a 401(k), or keeping track of your investments, this does it and more.
Who Can Benefit From Using Personal Capital?
I will go out on a limb and say that ANYBODY can benefit from this product. Whether you are a retiree, a new investor, a veteran of the stock market, or just someone that wants to manage wealth your way, this can do it all for you.
It’s not so easy that you feel annoyed or patronized by the program, but it is not so hard to understand that you feel lost and confused. It’s based in USA-San Carlos, CA, to be exact.
You can get it in two versions-you can pick up the free version known as the Free Financial Dashboard or the Wealth Management service. The free version is suitable for people that are just learning how to build a budget and helps you get started in investing.
The Wealth Management version is all you need to grow and manage your money. It has some robo-advisor capabilities and also gets you access to real live financial advisors that can answer any questions you think of.
I think it’s pretty great that you can try out the free version first, which I did, and then decide if the paid version is something you’d like to pursue.
So, What Is This?
If you join Personal Capital, you will be surrounded by two million of your friends that agree it’s a great platform. I found the bulk of these individuals make use of the free version, while about 18,000 people use the paid version. Bear in mind that the paid users are managing a total of 8 billion dollars!
Let’s Talk About the Personal Capital Dashboard
The free dashboard is something I would recommend to everyone, but especially if you are starting out managing your money. I decided it was time to get serious and start budgeting, so this was where I started.
The tools they give you for free are pretty great. And the investment support you get is nothing short of helpful.
You put all of your account information into the dashboard. Investments, savings, loans, credit cards, checking accounts, and more all go here. The idea is that you will be able to keep an eye on everything you are spending, saving, investing, and paying off in one easy place.
And the best part? I put my Vanguard (my employer 401k) info in there, and it was easy for me to manage that, too.
The dashboard itself is a colorful smattering of graphs, charts, and informational articles. Don’t be scared off at first-yes; it is a lot of info to take in, but you will come to see how helpful it all is. Let’s go over the tools they offer now.
What Can I Do with This Dashboard?
Cash Flow: This helps you establish your budget. Once you have this setup, you can track expenses and income from the varying accounts that you added to the dashboard.
Then, you can set your financial goals and work toward them. Whether you are seeking to pay the debt, add more to your 401k or save up, this will help.
They will offer you strategies that get you to the finish line.
Analyze 401k: Most of us have a 401k our employer sets up for us. Did you know those plans have fees? The dashboard analyzer will show those fees to you and show you how you can allocate your monies to lower-priced funds.
Budget Builder: The free version helps you see your cash flow and spending habits. You will get summaries of what you are spending, which enables you to see where all the money is going.
(Very helpful to me-I was buying far too much coffee). It tells you when bills are due, so you don’t accidentally overspend on something else.
Investment Check: Much like we see our doc once a year for a physical, this is a great way to get your investment accounts optimized. It helps you adjust your mix, so your performance is at its absolute peak.
Retirement Planning: This makes use of some hypothetical situations to help you figure out if your retirement is on the right track or not.
You can also use the tool to factor in situations like having a baby, changing careers, or starting a college savings account. It’s a good, safe way to see what can happen to your retirement, and how to make Plans B, C, and D in case they come true.
Net Worth Calculator: I dream of seeing the day my net worth is at least $1M. I think I can get there with this tool-it calculates assets, liabilities and uses that to figure out what your net worth is. After all, this number is key for your financial strength.
Let’s Talk About the Paid Version
If you are a fan of robo-advisors, this is an excellent choice for you. If you like robo-advisors but want human help at your fingertips, this is a REALLY great choice for you. You can do a lot of this stuff on your own, and then reach for help when YOU need it.
It starts just as you would expect; risk tolerance is assessed, along with your goals and the time you have to accomplish said goal. They also take into account your preferences as well in setting this up.
Diversification of your portfolio is automatic; you will be invested in many asset classes to make this happen. And rebalances do take place every now and again to make sure your targets are being met.
There is a total of six classes Wealth Management uses:
- Int’l bonds
- Int’l stocks
- USA Stocks
- USA bonds
- Alt. investments: think of things like energy, gold, investments in real estate trusts, etc.
These asset classes are invested in a low-cost ETF. It gets you exposure to a large market, but with low expenses.
Your portfolio percentages will depend on your profile as an investor: it looks at your investment goals, personal preferences, risk tolerance, and time.
So How Much Did You Invest? It is perhaps the biggest question of all-how much was needed to invest. At the minimum, you have to invest $100,000. If you want access to financial advisors regularly, you will need to invest a min of $200k.
Let’s talk about performance: I found the transparency of Wealth Management to be refreshing and honest. Their performance info is found right on their website, and through 2018 we saw some pretty decent numbers. I encourage you to see for yourself.
Let’s Talk Strategy: The strategy of Wealth Management is made up of three big parts. Let’s examine them now.
SRI (Socially Responsible Investments): Investments are chosen based upon how they impact the environment, their diversity as a company, and their management style.
For management, we might look at board independence, how executives are compensated, or management structure. You can use this information to invest in things YOU believe in.
Tax Optimized: Your investments will incur some income tax liability. The strategy of Weal Management is to minimize this. How do they do it?
- They make use of ETFs as opposed to mutual funds.
- They use individual stocks that are easier to buy and sell as a means of creating tax-loss harvesting.
- Tax allocation: Some assets which produce income are put into retirement accounts; meanwhile capital gains assets are placed into taxed accounts so they can get the lower, long-term tax rates on capital gains.
Pros and Cons
- Returns are reasonable and realistic
- They help you avoid tax liability.
- It is easy to invest in a way that aligns with your morals and values.
- The free version does a LOT.
- You can keep watch on ALL of your accounts in one place.
- You can add your employer’s 401k.
- No bill pay feature when you are alerted about a forthcoming bill
- Can be hard for investors to start-requires $100k
- Many ads to get you to sign up for the paid version
- Can’t talk to financial advisors unless you invest at least $200K.
While the initial investment to get in is pretty high, I think this is a pretty good tool for what it is. You can keep track of everything about your wealth in one spot, which is excellent for me.
And even if you cannot invest with Wealth Management right away, I highly encourage you to make use of the free dashboard-it will help get your money on track.