Sunday, August 13, 2017

My personal review of Personal Capital


I’ve recently signed up for Personal Capital and have already been using the service extensively.  Personal Capital is a financial account aggregator that offers free financial tools to help you manage all of your finances in one place.  I’m sure many of you may have heard of it or may already be using it.  Think of Personal Capital like Mint.com, but more heavily geared towards tracking your investments and net worth.

I've been using Mint.com since 2007 and I love the simplicity of automatically tracking your expenses, income, investment returns, home value, etc.  Keeping track of my credit card charges through Mint has helped me catch a few small fraudulent charges over the years.  Mint is free and I regularly recommend the service to anyone interested in keeping an eye on all his or her financial accounts in one place.   

I've also recommended using www.ClearCheckbook.com as a manual way to balance your banking, credit card, and investment balances.  Some people find manually keeping track of finances to be a pain, but I feel like it helps me keep an idea of what is going on with our expenses.  After all, if you don't know how much money you need to live off of, how will you know how much money you need in the future for retirement?  I use this service daily to track my expenses and financial account balances.  ClearCheckbook is free.

Anyways, let’s get back to Personal Capital.  I've put off signing up for the service for a while, because I didn't want to mess around with yet another financial tracking app.  Mint and ClearCheckbook already do such a good job of tracking all of my bank accounts, investment accounts, home value, and rental property value.  Mint also does a great job helping us create and stick to a budget.  Where Personal Capital really shines is analyzing and managing your investments When compared to Mint or ClearCheckbook, Personal Capital offers superior tools for managing your investment portfolio.

Personal Capital’s features really impress me.  When you login, the dashboard provides you with your complete financial snapshot.  You can see information about your cash flow, budget, investable cash, investments, credit card debt, mortgage(s), and property values.
An excellent overview of our finances.  The mortgage tab includes our personal home mortgage as well as our rental property mortgage.  The other asset tab includes the value of both our home and our rental property.
I totally get why over 1.4 million people use Personal Capital to track over $350 billion.  I can see why so many financial bloggers highly recommend the service.  Personal Capital offers a ton of information regarding your investment portfolio, asset allocation, investment fees, tax optimization and projected retirement.  Signing up for Personal Capital and using the tools and resources offered is completely free.   

When I was tracking our investments with Mint, I could only see the account balances in our different investment accounts.  Every time I wanted to check on our exact asset allocation, I would have to manually pull all the information out and calculate everything by hand – that gets tedious and annoying.  Once I signed up for Personal Capital and linked all of our investment accounts, I could instantly see our exact asset allocation.
Seeing this information helps us better keep track of and rebalance our asset allocation.  This chart tells me that it’s time for us to load up on more bonds and international stocks.  Our investments are mostly in the Boglehead 3-fund portfolio.  This portfolio includes a piece of over 3,600 US stocks (Apple, JP Morgan Chase, Google, Chevron), over 5,500 international stocks (Nestle, Toyota, HSBC), and over 6,300 individual US bonds.   

Homeowners and landlords can plug in their home address and Personal Capital will automatically use Zillow to add your property value into your net worth.  Personal Capital can also track your student loans, mortgage, credit cards, checking and savings accounts.  I recommend married couples share the same login and information since you can get a big picture idea of how much the both of you are worth together, and see what's going on with your combined your incomes, credit card spending, and investment portfolios.  

The Personal Capital retirement planner is very easy to use.  You input your investments, savings, risk tolerance, desired monthly expenses in retirement and your desired retirement age.  The retirement planner allows you to add large upcoming expenses such as a home purchase, or college tuition.  You can also add income events such as projected Social Security distributions, rental income, pensions or inheritances.  The retirement planner then calculates your likelihood of successfully retiring when you want to.  It’s nice to step back and get a big picture look at your odds of successfully retiring when you want.  
We still have a lot to work on with our retirement.  I'm still playing around with the retirement calculator - it's actually a lot of fun.
The retirement planner allows you to adjust your savings rate and annual expenses, providing instant feedback on how those changes affect your retirement and allowing you to check if you are on the right track for your retirement.  No matter your financial situation, the retirement planner can help build a detailed plan for your retirement.
Personal Capital displays beautiful graphs and charts to help you visualize your investments and asset allocation.  The software and interface are easy to use.   The iPhone app is great as well. 

Once you hit 100K of investable assets, a licensed financial advisor from Personal Capital will call and see if they can schedule a free telephone consultation.  During this phone call, the financial advisor will take the time to discuss your financial goals and questions.  The financial advisor will discuss ways to improve your portfolio, reduce your fees, and optimize your taxes.  There is no obligation to speak with them but it may be nice to get some input on your personal financial situation.  This phone call is free of charge.   

In addition to the free investment and retirement tools, Personal Capital does offer professional investment management.  Their financial advisors can manage your assets by helping you stick to your asset allocation, cut investment fees, do tax loss harvesting, provide customized retirement planning and much more.  Here are the fees:
There are 3 levels of account management: Investment Service (up to 200K in investable assets), Wealth Management (200K to 1M in investable assets) and Private Client (over 1M in investable assets).  
These levels of management offer features such as 24/7 call access, 401K advice, college savings, estate planning, private equity review, hedge fund review and more.

While Mint.com and ClearCheckbook.com are great for tracking your finances and sticking to your budgets, Personal Capital excels at tracking your investments.  This is especially helpful when your investment account balances start growing into significant values.  There is definitely a place in your financial toolbox for Personal Capital.  I highly recommend checking out Personal Capital and playing with the investment analyzer and retirement planner You can sign up for your free account here

I am an affiliate for Personal Capital.  If you sign up from a link on this page, I may receive compensation.   

Personal Capital - 401k

Thursday, August 10, 2017

Get a free share of stock with Robinhood

The Robinhood stock trading app has been out since 2015 and the big thing it has going for it is that there are no commissions or fees.  Over two million investors are now using Robinhood and it has become the fastest growing brokerage.  All stock and ETF (exchange-traded fund) trades are completely free.  

There are no account minimums, no annual fees, no inactivity fees, or account transfer fees.  There really are no hidden costs.  If you want to open a stock margin account, there is a $2,000 minimum.  A margin account is offered by brokerages that allow investors to borrow money (and charge interest) to buy stocks – I highly recommend against doing this since you can lose more money than you invest.  Robinhood makes money on interest gained from uninvested cash.  Robinhood also makes money with their new premium feature called Robinhood Gold.  Robinhood Gold offers the ability to trade stocks on margin, after hours trading, and instant deposits (the free version requires a 3 day hold).  

Using the app is easy and intuitive.  Currently, trades can only be executed through the Robinhood iPhone, Apple Watch or Android app.  You cannot access Robinhood on your desktop or through the web.  Robinhood is for taxable accounts and not your retirement accounts.  I don’t recommend investors put all their retirement money into individual stocks – it’s simply too risky to make consistent long-term gains picking individual stocks.  If you want to buy diversified investments through Robinhood, you can buy ETFs, which act like mutual funds and can track different stock market indexes.  I would recommend buying VTI (Vanguard total US stock market) or VXUS (Vanguard international stock market) ETFs.  Or if you really want to play the stock market with some “fun” money, you can buy shares of company stocks that you’d like to add to your portfolio.           

Robinhood is a bare bones stock-trading app.  It lacks trading research and tools.  There are no research reports or stock analysis information.  This app is strictly for investors that know what they want, are willing to do their research elsewhere, and want to buy stocks and ETFs without any fees and commissions.  The user interface is very smooth and intuitive. 
The best thing about Robinhood is that they are now offering a free share of stock such as Apple, Ford, or Sprint for free once you sign up through my link here.  The value of the share may be anywhere between $2.50 and $200 and fluctuates due to market movements.  The odds if getting a high quality stock are pretty good too.  You have a 1 in 150 chance of getting Facebook, Apple or Microsoft and a 1 in 70 chance of getting Ford, Sprint, or AMD.  There is an approximately 98% chance of the stock bonus having a value of $2.50 to $10, a 1% chance of the stock bonus having a value of $10 to $50, and a 1% chance of the stock bonus having a value of $50 to $200.  
Stock bonus will be credited to the enrolled account within approximately one week after the bonus is claimed.  Even if you don’t intend on using the app to trade frequently, getting a free stock is nice.  The cash value of the stock bonus may not be withdrawn for 30 days after the bonus is claimed.  Note that the value of offer received may be reported as Other Income on Form 1099-MISC where required by applicable rules and regulations. 

Check out Robinhood here and we’ll both get free stock! 

Tuesday, August 1, 2017

Side hustles July 2017

The great thing about doing side hustles to generate extra income is that you can hustle on your own terms.  The more hard work, time, and creative effort you put in, the more extra money you can make.  You can hustle as little or as much as you want, whenever you want.  It’s your extra money, and you can choose how you want to spend it.  Instead of focusing on what ideas don’t apply to you, try focusing on different side hustle ideas that you can implement to work for your situation.

Once a month (usually on the 1st), I like to post a short summary of our financial and personal situation for the previous month

Welcome to August, did everyone have a good July? 

This past month, we spent a lot of time meeting with friends and family.  It has been very nice catching up and bonding over great food. 

When eating out, we prefer to go to fast-casual restaurants where tipping is not customary.  When ordering alcohol at a restaurant, we limit it to less than 2 drinks - anymore is just a fantastic waste of money.  It’s one thing to pay for food that someone else has prepared for you - it’s a waste to pay to have someone pour you a drink right out of a bottle.  Since we eat out so infrequently, going to any sit down restaurant is a rare luxury to be savored.  I know plenty of people who eat out for one or two meals a day.  For them, there’s nothing special about eating out - it’s just a routine part of the day. 

We’ve also had people over to our house for home cooked meals.  It is so comfortable and relaxing gathering together at home.  The food is healthier and there are fewer expenses as well.  Clean up is a breeze – just pop the dishes into the dishwasher.  Eating at home also saves time finding parking, waiting for waiters to come take your order and waiting for the bill to arrive.

Since our son turned 2, there have been some huge changes.  Physically, he is less clumsy and more sure-footed.  Developmentally, he is starting to learn many new words, talking more and putting together short sentences.  We are proud to share that he knows his entire alphabet, can count from 1 to 20, knows all his primary colors, and much more.  The biggest challenge we now have is managing our son’s terrible twos.  His new favorite word is “NO” and he gets frustrated extremely easily. 
Here's a picture of our son playing with his train set. 
Our son has already had several temper tantrums.  This happens when he gets frustrated that he can’t accomplish a certain task he wants to do on his own (like stacking blocks).  If he fails at stacking blocks a few times, he will end up screaming and throwing all the blocks around.  There are other times where our son wants to tell us something, yet does not have the language development to properly communicate.  He will get so flustered that he will scream and cry.  Any parents who have a toddler will know what it’s like dealing with these tantrums and meltdowns.  Things have gotten especially crazy (and embarrassing) when our son decides to throw a tantrum in public.  We are trying to balance out giving our child some independence and keeping him structured at the same time. 

Our son loves going on long walks and exploring the different plants and flowers in our neighborhood.  Being in nature really calms him down.

This month we took our son in for his second eye examination.  It didn’t go so well as there was plenty of hitting, kicking and screaming.  The good news is that his optometrist was able to determine that he doesn’t need glasses and that his eyes are healthy. 
Our son's vision is 20/20!
We also took our son in for his first dental appointment and are happy to share that he has no cavities!  Whew. 
And here is a random picture of Abby being lazy.
Here’s our monthly summary of side income that we have generated in the previous month of July.

Cash back
On 7.4, I received a $1.50 deposit into my Discover Cashback Checking account.  I keep this online checking account open since you can earn 10 cents (up to 100 transactions per month) on debit card purchases, bills paid through Discover’s online bill pay service, or checks cleared.     

Side Job
On 7.10, I received a check for $162.50 for teaching at the local university.

Rental Income
On 7.7, we received a net profit of $465 from our rental property.  Our tenants had some issues getting rent paid on time and so they paid $35 in late fees.  While this is extra money for us, I’d rather have our tenants continue to pay rent on time.    

Miscellaneous Income
On 7.31, I received $750 in referral bonus income for referring a new colleague to our medical group. 

I have already referred 2 colleagues to join our practice.  This is why networking and keeping connections is so important.  In many industries, businesses look first towards internal referrals prior to putting out advertisements.  While knowing the right people doesn’t guarantee you will get a job, it can get you access to the front of the line.    

Monthly Totals:
We earned $1.50 cash back
I earned $162.50 from my side job teaching at the local university
We earned $465 from rental income
I earned $750 from miscellaneous income

All of this totals $1,379 from our side hustles for the month of July.  With our second baby due in December, we have been continuing to save up.  Side hustle income is the cherry on top.       
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