What is Personal Capital? 2019 Review Including How We Use it to Manage Money

Whether you are new to investing or a seasoned trader, Personal Capital has something for everyone. Here's a look at the tools it offers to help you track and manage your money.

Robo-advisors have grown in popularity in recent years as the stock market has risen and digital trading has continued to improve. One of the first robo-advisors, Personal Capital, was founded in 2009, although it was two years from now when it officially launched.

Personal Capital, our favorite free online finance tool, offers two main finance products. First there is the core product, an online personal dashboard that is open and inclusive for everyone for free investment tools and analyzers. The Company also offers a wealth management product for clients with balances of $100,000 or more. The company charges a maximum of 0.89 percent per year for the assets it manages.

Whether you are new to investing or a seasoned trader looking to take your portfolio in a new direction, Personal Capital has something for everyone, as you will learn below.

What is personal capital?

I've been using Personal Capital's core product for a number of years, both through the company's website and iOS app. Most of the article will focus on this aspect of the business, although I will also touch briefly on the wealth management offerings.

Personal online dashboard

Personal Capital's free financial instruments take many forms. These include a retirement planner and fees analyzer, an investment check, a savings planner, and a budgeting and cash flow guide. To get started, you need to authenticate your online banking accounts using the usernames and passwords provided by each source. The more accounts you add, the better and more accurate an analysis Personal Capital can provide using its built-in algorithms. Ideally, you should add your checking and savings accounts, IRAs and retirement portfolios, and mortgage and loan information.

Once you've added your accounts, the Personal Capital dashboard provides a real-time view so you can track and manage all of your financial life and wealth. Information about your accounts is updated once a night and then every time you log into the application, up to once every four hours.

Adding accounts to the dashboard is a simple process. However, I noticed that logging into some accounts for the first time took a few tries. However, once the initial authentication is complete, the sync works as promised.

transactions

As synced account transactions are added, you can customize them by adding categories and descriptions. You can also add tags and images. In the future, Personal Capital will use this information to provide better insight and to match future transactions for record keeping. For example, if you categorize target transactions as groceries, future transactions will include that distinction as well. Collectively, this type of information is used to provide information and insight for budgeting and cash flow.

What about security?

Input data is encrypted using AES-256 with multi-layer key management, including rotating user-specific keys and salts. Before you can access your information on another device, you must first authenticate yourself with an automated phone call, email or text message. For additional mobile protection, you can use Touch ID or Face ID on iOS devices and mobile-only PINs on Android. Additionally, unlike other free online personal finance tools, Personal Capital has rock-solid terms of service. In other words, they don't make much money selling your data to other services since their main goal is to one day win you over and sell you to use their wealth management service. Personally, though, I've been using the free tools for over three years and have no plans to use the other paid plans. Just something to keep in mind when weighing PC vs other free online tools.

Cash flow and budgeting

Under cash flow, you can see a breakdown of where your money is coming from and how it's being spent by category. You can also see how both income and expenses compare to the previous month. Drill down are transactions for each group. Budgeting breaks down all your monthly payments by type and allows you to filter by account. You can easily customize descriptions and categories for each transaction either on the web or through the Personal Capital app. As a bonus, you can also link your credit card, loan, and mortgage accounts to view your bills, although this functionality is limited to the web only.

retirement planner

With the integrated retirement planner, Personal Capital provides information about whether you will have enough resources at a later date. To provide this score, the algorithms use your real-time account information and projected income and spending goals.

For example, you might want to see how buying a new vehicle or vacation home might affect your plans, or how receiving an inheritance might affect your future income. The planner uses this information to provide further insights, e.g. B. whether you may face higher taxes if a certain situation occurs or if there is an economic slowdown. This insight often changes based on your current account information and goals. There's also a retirement calculator that shows you what you're likely to spend managing your retirement funds by the time you retire.

Are you looking for more? Personal Capital also offers a free telephone consultation to help you create a personalized investment strategy.

Investment Check

Personal Capital's investment checkup tool can help you get a better idea of ​​whether you're investing in the right asset classes and companies based on your age, risk aversion, future allocations and historical data. It also sheds light on the fees you spend annually on your investment accounts and how those fees will multiply in the years to come. Personal Capital suggests targeted allocations for your future investments.

savings planner

Nobody likes liabilities, but it's part of life. With obligations come the costs associated with holding debt. Personal Capital's savings planner will give you a better idea of ​​how long it will take to pay off your debt and at what cost. The planner also includes an emergency fund tool so you know how much you need to save to survive unplanned events like layoffs.

The Personal Capital Savings Planner is only available online.

Daily Capital Blog

As a free Personal Capital user, you also get access to the company's Daily Capital Blog. From here you can access free articles on the latest financial news, from Wall Street to Main Street. The list of articles continues to grow with new content being released every week. It is another helpful tool that will help you manage your money better.

wealth management

For those with $100,000 or more to invest, Personal Capital offers additional services, including a wealth management program. Services include access to members of the firm's financial advisory team, 401k advice, 24/7 call access and priority support services. The company also offers tax and education planning and much more.

If you allow Personal Capital to manage your money, they charge 0.89 percent on the first million dollars. This percentage goes down to 0.49 percent for funds of $10 million or more. As of today, Personal Capital is over $10 billion in assets under administration.

The final result

Financial professionals who have reviewed Personal Capital's wealth management solutions have given the company mostly high marks, although many have criticized the company for its $100,000 account minimum. The company was mostly praised for the free tools it offers to anyone with a computer or mobile device.

nerd wallet says, "Personal Capital's fees are on the high end, but anyone can use the robust free tools."

at investor junkie, there is nothing but praise: “A free and easy-to-use personal finance software that syncs all your accounts in one place. Personal Capital creates summaries of your expenses, your net worth and most importantly, your investment portfolio. The up-sell is the wealth management service.”

Finally, money under 30 explains, "Get Wall Street-grade investment insights and grow your returns with this powerful (and free) app."

I plan to continue using the Personal Capital dashboard in the months and years to come. In time, I might even consider investing some of my retirement savings in it. My experience so far has been consistently positive with both the Personal Capital app and the website. Both together have become my favorite financial management tool. Both are easy to use, informative and yes, useful. I can't wait to see where the company goes in the future.

For more information on Personal Capital, visit its website.

By: What is Personal Capital? 2019 Review Including How We Use it to Manage Money