Review of Personal Capital for Long Term Financial Growth

It is no mystery that personal finance is one of the topics that as a society we are the most afraid to talk about. Personally, I did not learn much about it growing up or in college. The interesting part about it is that a solid financial foundation is one of the most important things we can do for our lives. When we are financially stable we are able to make better decisions and ultimately have more freedom.

There are many tools that have helped me in the process of taking control of my finances. I have used tools like Mint, You Need A Budget, and plain old spreadsheets.

Why Personal Capital?

One of the best features that Personal Capital has is the ability to import all of your accounts to get a big picture view of your net worth. Not only can you keep track of your net worth, but you can also view how your investments are doing all in one place.

One of my favorite features of Personal Capital is its investment analysis. In the last year, I started my investing journey after being hesitant for a long time. As a Hispanic, I really did not know what investment was and always thought it was risky. These assumptions were wrong. A combination of great personal finance books such as I Will Teach You To Be Rich, Total Money Makeover, and Set for Life and the great tools I found within Personal Capital allowed me to take control of my finances and finally get over the fear of investing.

In terms of how to plan, make sure you check out the Newsletter to be notified of future posts. I will leave you for now with the basic plan that I use. It involves a conscious spending plan over a detailed budget or overthinking every expense. I got this concept from the great Ramit Sethi in his book I Will Teach You To Be Rich:

You may notice that these books have totally different perspectives. I truly believe there is no right or wrong way to manage your money as long as you have the financial fundamentals right. I always encourage people to read wide in finance and take what resonates the most. Be open to new ideas and concepts.

The beauty of personal capital is that it allows you to take these concepts and apply them how you would like. To pay down debt, save for retirement, and make sure you are allocating resources to the four major buckets appropriately.

Personal Capital Features

Banking

Like it sounds, it helps you keep track of all your banking including assets and liabilities to figure out your Net Worth. One great feature here is the cash flow feature to make sure you are spending less than you are earning. This is a nice and quick way to see if you are on track or if you need to adjust your expenses.

To get more detailed information on where the money is going, you can always use their budgeting feature but I have found it a little limited in terms of capability. That is why I tend to just use my personal Google Sheet.

Additionally, Personal Capital tracks when your bill payments are due for your linked accounts to make sure you never miss a payment. This is useful as on-time payments are an important aspect of your credit score.

Related: Personal Finance with Danielle Schroeder

Investing

Investing has become a big part of my life recently. I wish I had started a long time ago but I am glad I started. Take this as a sign if you have not started yet. Personal Capital does a great job of giving you a lot of information about your investments. I love how it takes all my investments accounts and summarizes them per allocation and sectors to make sure they are well diversified.

Personal Capital has one of the best interfaces to see your investments and their performance. It is great to see all your investments accounts in one place and how they compare to other ETFs or stocks. Hands down, it has one of the best user interfaces that I have personally used.

Planning

Lastly, Personal Capital has great planning tools for saving, debt paydown, as well as retirement planning. I have definitely not dived deep enough into these functionalities but I really like to see the projection of my current holdings compared to the projected expenditures after retirement.

Other great features include the Retirement Fee Analyzer to make sure you are not overpaying in fees and thus hindering your long-term investments as well as their investment check-up to make sure your holdings are balanced and your risk is properly managed. I cannot say enough great things about the planning feature as someone who loves to plan and make sure everything is in order.

Wealth Management

I have personally not used the wealth management feature from Personal Capital but they do have comprehensive management services. I just figured I would mention it here.

Who is Personal Capital For?

Personal Capital is really for someone who wants to keep track of personal and investment accounts. I think this is where Personal Capital really shines over other tools like Mint. Their investment analysis is very comprehensive and detailed. The best part is that everything is automated and they provide a breakdown of your diversification so you can make sure you are well invested.

If you are a student, this tool can help you stay on top of your accounts to make sure you are not spending more than you need to and helps to simply keep track of your transaction. I personally don’t use Personal Capital for budgeting but know of others who do.

If you are a professional, this tool can really take your finances to the next level with all of the features I just mentioned. From the basics such as spending tracking to the more complex such as investment allocation and risk management. Personal capital has all you need to stay on top of your finances.

Are you ready to get your finances in order? Check out the Better Financial Life Guide and learn:

• How to create a comprehensive financial plan
• How to balance spending and saving your money
• How to invest for your long-term goals

Disclaimer: Personal Capital Advisors Corporation (“PCAC”) compensates Luis Duque (“Company”) for new leads. (“Company”) is not an investment client of PCAC.

Originally published at https://www.luisfelipeduque.com on December 31, 2021.