Personal Capital is by far my favorite networth tracker. It has an incredibly intuitive interface. It allows you to aggregate all the different accounts that you have–and it's free!
If you take some time to think about it you may realize how spread out your investments really are.
Maybe you have a 401(k) with your employer and a taxable account with Vanguard. You might also have a traditional or Roth IRA. And what about those stocks that are just orphaned over at Fidelity? Maybe you've had multiple employers over time and you haven't rolled over your 401(k)s, so they are all just sitting there with your previous employers. Then you likely have multiple banks that you do business with, all of which have several accounts.
Each of these accounts requires you to check in and navigate all those different platforms. This can be overwhelming. It's no surprise that many people have no idea what their net worth actually is. Or worse, have long forgotten about account because it's just it requires too much bandwidth to check in on them. It's easier just to forget about it and move on.
The Net Worth Dashboard
Personal Capital eliminates that problem. As soon as you set up Personal Capital you'll get a personalized net worth dashboard. It pops up as soon as you log into your account and you're able to see all of the accounts you have in one place. Then it combines all of those accounts into a single clean chart that gives you a great visual representation of your current net worth and your progress over time.
Tracking Real Estate
You also have the option to put it in your home and rental properties values and mortgage balances as well. Personal Capital will pull estimated market values from Zillow and the mortgage balances from you lender. You can also add the market value of your properties manually if you aren't a fan of Zillow's estimates. That is just incredibly convenient! You'll link each individual account that you want to set up and then from there it kind of takes care of everything for you.
I think when it comes down to for me, simplicity is everything. I mean, it's 2018. You don't need to be logging into 30 different sites just to get an update on where you stand financially. This just takes care of all of it for you.
I still play around with Excel sheets just because I like to do more like future value calculations and tweak different things at the margins. So I'm not saying that you're never going to look at your Excel sheet again. But Personal Capital does all the heavy lifting for you.
Tracking Cash Flow Month To Month
I personally don't use Personal Capital for cash flow. Not because it's not a good feature but because I don't want to add the noise of monthly expenses to my overall net worth tracker. I actually still prefer and use Mint for my month to month expense tracking. So I have two different platforms set up. But Personal Capital is what I'm using for all of my investment tracking. AKA the Perpetual Money Making Machine that we're trying to build.
Now, if you really want to dig into some of the extra features that Personal Capital has then check out the investment checkup tool. This can actually take a look at your portfolio and it will allow you to look and see whether or not you're overweight in any particular category in that particular portfolio.
So if your equities are out of sync with where you want to be it allows you to quickly analyze that. You can then choose to take action or not.
If you are just starting to pay attention to your expense ratios Personal Capital has a feature that allows it to look at all the expenses that you're paying on your various accounts and it will highlight for you if any of them are exorbitant.
Now, I don't have a ton of mutual funds that can trick me with some of these higher fees. Not anymore anyway! But if you're just now starting to pay attention to your fees this is a great tool. If you have accounts with past employers you may find that they have some monstrously high fees. This is a quick way for you to assess that, and knowledge is power. Once you can identify that you're paying too much in fees, in many cases you can immediately make a decision to course correct and get into a fund that has much lower fees.
The difference in the fee percentages is millions of dollars over your working career so it's well worth looking into.
The Efficient Frontier
There are so many other tools that Personal Capital includes. You can go into much more detail than I can possibly include in this article, but for you math nerds you can really get into the weeds with this. It can show you where your allocation is on the efficient frontier curve. This is a type of risk modeling. This is right up Big ERN’s alley. Basically, it assesses where you are on this curve in terms of being able to expect a higher return without substantially increasing your risk. The implication is that there is a point of diminishing returns, where you're really taking way more risk than you need to for very little in returns.
While it's a total pain to have your accounts spread out all over the internet, the dangerous part is that you can't get a clear view of your allocation. Personal Capital fixes this for you with the allocation checkup. This tool looks at all your investments, from where ever they live and gives you a breakdown of exactly what you are holding. This allows you to look at your cap weight and your allocation models. You know how much are you weighted in various sectors and U.S. stocks. This is amazing.
For example, let's say you are aiming to have 80% stocks and 20% bonds. If you have mutual funds or EFTs in several different accounts, say your Roth and your 401(k), it's very difficult to know exactly what you are holding in each fund, and how that relates to your allocation goals. But with the Allocation Checkup, you can see exactly where you stand and can then decide if it's time to take action.
The Retirement Planning Calculator
It has a fantastic retirement planning calculator. so it actually does allow you to put in projected monthly spending projected investments and then actually allow you to determine whether or not you're going to be able to pull off this retirement. based on current investments and projected annual savings.
So you can say Hey I wanted to be able to spend 60 grand a year and I plan on living off of my portfolio at the age of 40 can I pull this off. It runs 5000 different calculations and then finds the median on how likely it is that you can pull it off.
And based on your current networth and your projected annual savings it can project your likelihood of success to hit your goals. this calculator is incredibly flexible. and will allow you to play with all the variables you could ever hope for
It can tell you pretty precisely whether or not you're going to be able to pull this off and then the cool thing is you can actually add extra features like your Social Security estimate, your wife's Social Security Estimate, and you can make this as accurate as you want. They continue to make this tool better and I'll be honest with you. It is so much better than when I initially when I looked at it and used to set it up back in the day.
Ultimately the reason that I love Personal Capital so much is the simplicity of being able to track my net worth in one single place. I highly recommend you check it out. You will not regret it.