When was the last time you saw a doctor? Hopefully, it has not been too long.
We take care of our bodies by going to the doctor.
And by doing so, we are assessing and taking care of our health.
This is all pretty obvious, right?
Okay, so let us try a similar question: When was the last time you assessed your financial health?
Assessing your financial health is equally important as assessing your physical health.
But what is financial health, exactly?
If you can’t answer that question, then this article is definitely for you!
What is ‘Financial Health’?
Financial health is a term used to describe your personal financial situation. There are many areas to financial health, including your savings and spending.
Now, financial experts have created guidelines for each indicator of financial health…
…but each person’s financial situation is different.
As such, you need as much help as you can possibly get to ensure that you are on track to reach your goals.
Additionally, you want to avoid putting yourself at financial risk if something unexpected occurs.
Just like your physical health, maintaining your financial health is hard work.
Luckily, to ease some of that hard work, we can rely on good old technology to help us.
There are many apps and services that were created to make your life easier.
And today, we will be looking at a company that has set out to do just that – make your life easier.
The company is called Personal Capital, an online financial advisor and wealth management company.
Not only do these guys manage your investments, but they also give you a wide range of FREE money management tools.
So, are you ready to hear more?
Personal Capital Overview
You could say that Personal Capital is TWO services combined into ONE.
Founded in 2009, and headquartered in San Carlos, California…
…Personal Capital has over two million users.
The wealth management services arm of the company has over 19,000 investment clients, who have greater than $8.5 billion in assets under management.
But keep in mind – most people elect to begin with the free version, then upgrade to the wealth management service.
The wealth management service gives users direct investment management of their portfolios.
However, whether you choose to upgrade, the free version still gives you tons of investment tools.
To sum it up, Personal Capital has two versions:
- Personal Capital Financial Dashboard
- Personal Capital Wealth Management
While these two services are related, they offer many different features.
The financial dashboard gives you access to money management tools. With these tools, you get a snapshot of your financial health in one place, including:
- Net worth
- Spending analysis
- Retirement planning
- Portfolio performance
All of this will help you better manage your money and improve your financial health.
Then you have the wealth management services, which offer robo-advisor services combined with human, financial advisors.
With this, you can design a personalized investment strategy based on your goals.
Sounds pretty good, right?
Well, we do not have much time to waste because each service is filled with distinct features and functions created with you in mind.
Personal Capital Free Financial Tools
Personal Capital financial tools allow you to get the most advanced technology available in personal finance…
…for 100% free.
These tools can help you do things like:
- Link all of your accounts in one place
- Plan for retirement
- Uncover hidden fees
- View your net worth
- And so much more
So, strap in – because it is time to get to know your money!
Personal Capital Free Financial Tools – Features and Services
The “Budgeting” tool gives you the ability to monitor your cash flow and spending habits. Additionally, you can analyze your spending categories and individual transactions. You can get monthly summaries which let you know exactly where your money is going.
The software also provides alerts on upcoming bills; however, there are no bill pay capabilities. Thus, you will need to pay your bills directly from your bank accounts.
Cash Flow Analyzer
The cash flow analyzer has the ability to create a budget for you. This tool tracks your income and expenses from the different accounts associated with the platform.
You can set financial goals, like paying down debt, planning for retirement, or saving for a vacation. You can also use the analyzer to develop strategies to reach your financial goals.
Do you know where your money is going? This tool tracks your transactions and displays the activity for each account.
You can also sort your transactions by:
And you can filter your activity by time period.
As you can imagine, bill reminders remind you of upcoming bill payments for things like:
- Credit cards
And you will have the ability to see things like due dates, statement balances, and minimum amount due.
401(k) Fee Analyzer
Do you participate in your employer-sponsored retirement plan? If so, you may not be aware of the investment fees hidden in your plan. Then 401(k) analyzer will show you exactly what each plan that you participate in is costing you.
From there, this tool will suggest alternative options for lower cost funds.
This tool provides you with guidance on how to withdraw money for retirement in the most tax-effective way.
This tool uses a series of “what if” scenarios to give you an idea of where you stand in relation to your retirement goals. You can also adjust for changes in your plans, such as the birth of a child or career change. The retirement planner also takes into account other factors that can impact your retirement.
The investment checkup tool allows you to optimize your investment accounts. The tool can also adjust your portfolio mix to improve your investment performance.
Net Worth Calculator
Since you are tracking your assets and liabilities, you can determine your net worth. You should know this number, too, because net worth is one of the most important indicators of your financial health.
You will also receive a weekly update of your current net worth.
You can use the “Education Planner” to compare the costs of specific colleges, determine how much you need to save each month, and calculate the projected tax savings from a 529 plan. You can also see the average cost of in-state, out-of-state, and private universities.
Personal Capital Wealth Management
Personal Capital also offers investment management services for those with $100,000 to fund their account.
The company offers robo-advisor and human advisor elements.
This hybrid formula gives you the best of both worlds with technology and the human touch.
The company takes the time to understand your current financial situation and goals.
With this information, they are able to design a fully customized strategy.
The level of service you receive depends on your balance level:
Up to $200K: Investment Service
- Access to free online tools & dashboard
- Financial Advisory Team
- Tax Efficient ETF Portfolio
- Smart Weighting™
- 401k Advice
- Cash Flow & Spending Insights
- 24/7 call access including weekends & after-hours
- Support Priority Services
$200K – $1M: Wealth Management Service
- Everything in Investment Service
- Two Dedicated Financial Advisors
- Customizable Individual Stocks & ETFs
- Full Financial & Retirement Plan
- College Savings & 529 Planning
- Tax Loss Harvesting & Tax Location
- Financial Decisions Support (including Insurance, Home Financing, Stock Options and Compensation)
Over $1 million: Private Client
- Everything in Wealth Management
- Priority Access to CFP®, Advisors, Investment Committee & Support
- Investment Portfolio Mix of ETFs, Individual Stocks & Individual Bonds
- Family Tiered Billing
- Private Banking Services
- Estate, Tax & Legacy Portfolio Construction
- Donor Advised Funds
- Private Equity & Hedge Fund Review
- Deferred Compensation Strategy
- Estate Attorney & CPA Collaboration
- Access to Private Equity Investments
Personal Capital Wealth Management – Features and Services
Personal Capital Wealth Management supports the following accounts:
- Traditional IRA
- Roth IRA
- Joint Accounts
- Taxable accounts
In addition to supporting these accounts, Personal Capital comes with the following features:
The company posts its investment performance directly on the website. You can view the performance here.
When your portfolio deviates too far from your desired asset allocation, Personal Capital will automatically rebalance your portfolio.
Smart indexing supports Modern Portfolio Theory and equal sector and size weighting.
Tax Loss Harvesting
Tax optimization is used to lower your income tax liability coming from your investment activities. The strategy uses several different techniques to achieve this:
- By using ETFs instead of mutual funds, you will generate fewer capital gains.
- By using individual stocks, you can easily buy and sell to generate tax-loss harvesting opportunities.
- Lastly, tax allocation is used where some income producing accounts
Socially Responsible Investing (SRI)
Personal Capital has a personalized socially responsible investment strategy, so you can make investments that align with your values.
Personal Capital Plans and Pricing
The company offers the money management tools for free.
However, the wealth management services are geared toward high net worth individuals.
The minimum investment required for these services is $100,000.
Can you afford that? No?
But, if you can, the more money you invest, the lower the fees. The annual fee structure is:
- Up to $1 million: 0.89%
- $1 – $3 million: 0.79%
- $3 – $5 million: 0.69%
- $5 – $10 million: 0.59%
- Over $10 million: 0.49%
These fees are all-inclusive, meaning there are no trade commission fees or any other surprise fees.
Personal Capital Security
At Personal Capital, keeping your financial data safe and secure is the highest priority.
As such, the company uses multiple layers of security, in every component of its systems, to keep your accounts and money safe, and your information private.
Personal Capital received an A+ rating by the world-renowned Qualys SSL Labs, which represents a stronger rating than most major banks or brokerages.
You must first authenticate each device that accesses your account.
Before you can access your account on any new device, you will receive an automated phone call, e-mail, or SMS asking to confirm your identity.
There is also extra mobile protection on iPhone with Touch ID authentication and mobile-only PINs on iOS and Android.
After you link your accounts to Personal Capital, you can use the ‘Transactions’ page to look at all transactions across all accounts.
Additionally, the opt-in ‘Daily Transaction Monitor’ e-mail sends a daily list of new transactions, making it easy to check for suspicious activity in your accounts.
Personal Capital App
You can access your Personal Capital account via mobile app.
In the app, you can view things like:
- Summary of accounts and current net worth
- Cash flow, income, and expenses
- List of recent transactions
- Overview of investment accounts
- And much more!
The app provides a convenient way to check up on your finances just about anywhere.
Get Started with Personal Capital
Sign up and link your accounts
Begin by registering for a Personal Capital account and connect all of your financial accounts (i.e., bank account, CD, investments, etc.). You can link to over 12,000 financial institutions.
If you happen to have $100,000 to deposit, you can use the wealth management service. The wealth management services come with a FREE phone consultation.
Your advisor will review your financial health and plans. From there, you will get a second follow-up consultation where you will receive a personalized investment strategy tailored to your goals.
Open your investment account
If you choose, you can go ahead and open an investment account and fund it.
What we love about Personal Capital
Free money management tools
Personal Capital offers a wide range of tools that you can use for free. You merely need to create an account to use these services, but you do not need to enroll in any paid service. This tool is excelled for DIY investors and beginner budgeters.
See your financial health in one spot
Personal Capital does an excellent job summarizing all of your finances in one easy-to-use service.
You need to verify each new device with Personal Capital to ensure that it is you who is genuinely accessing your account. Personal Capital’s overall security is more than adequate, which is what you need given the sensitivity of this information.
Easy to use
Getting started with Personal Capital is very easy, and so is linking your accounts. Also, the information and feedback displayed by the app are easy to read and understand.
What we don’t love about Personal Capital
Compared to other competitors (wealth management services and robo-advisors), Personal Capital charges higher management fees. However, you can still save money by using Personal Capital instead of a financial advisor.
Unfortunately, the lowest amount you need to open an account with Personal Capital is $100,000. There are other wealth management services with much lower thresholds that may be suitable for those with fewer assets.
Is Personal Capital right for you?
Many people could benefit from Personal Capital. But there are several specific types of people that we would strongly recommend Personal Capital to:
- High-net-worth individuals. If you are an investor with lots of assets, Personal Capital could be a good fit for you. The service offers a very “hands-off” approach to investing and can also give you tax optimization strategies.
- DIY Investors. As you can see, there are tons of free tools available to help you with your financial management strategy. For this reason, any do-it-yourself investor could greatly benefit from Personal Capital’s tools and services.
- If you have been a financial “couch potato” all your life, Personal Capital is a great place to get started. The platform is straightforward to use and very intuitive.
But the best way to see if Personal Capital is right for you…
…is to sign-up, of course.
Remember: you can sign-up for free with no financial obligation.
Personal Capital Review Summary
One thing to remember is that Personal Capital is:
- A financial management service
- An investment management service
Personal Capital has created software that is free and easy to use.
We highly recommend Personal Capital because of the company’s ability to monitor your finances.
The retirement planner and investment checkup tool are both far above the competition.
The wealth management service does come with a high minimum investment, but some could still find it beneficial.
However, the free tools offered by Personal Capital is where this company truly shines.
So, why not give Personal Capital a shot?
Your financial health could depend on it!