If you’re serious about FI/ER, you need the right financial management system.
I’m hoping I can save you some time & trouble finding it. In the twenty-five years since I started the FI/ER journey, I’ve spent a gadzilious number of hours testing and using most of the systems out there.
The TL;DR of this post is that compared to Excel, Quicken, and Mint, I chose Personal Capital for form/function, reliability, and accuracy. It’s simply the best financial management system out there. And it’s free! Click here to test-drive it today.
The financial management system ideal system should keep you on the right side of the form/function tradeoff–i.e., you shouldn’t have to make too many compromises in how you work. I’m also heavily into system reliability. My fuse is about this long [holds thumb and fingertip an eentsy bit apart] for having to screw around with software bugs. And above all, I need accuracy.
To show you why I think Personal Capital’s the best system, I’d like to show you the four main ones I’ve used: the other three being Monster-Bubba.xls, Mint, and Quicken.
And look, I won’t waste your time with Quicken. Not only is it $65, but I think the interface is clunky, I dislike constant up-sells, and I was constantly having to re-connect my accounts. You might disagree, but IMO comparing Quicken to Mint and Personal Capital is like comparing a one-legged goose in a headwind to Usain Bolt riding a Pershing II missile.
Um…yeah. Well, let’s kick it.
My Frankenstein model: Monster-Bubba.xls
I started building tracker spreadsheets in 1993, the year I first conceived of retiring early. They evolved and grew into a nineteen-page behemoth I named “Monster-Bubba.xls.”
In 2012 I finally took Monster-Bubba out behind the chemical shed and shot him. Up until then I’d been running him in parallel with Quicken for our long-term modeling.
This is the least messy of Monster-Bubba’s pages: our post-tax account balance. We retired in July of 2005 and I’ve included twelve subsequent months. Study this to see how splitting up a triple-decker rental house into condos and cashing out some employee stock options changed our post-tax position from $608K to $894K. Clear enough.
But this next friggety thing tracked our actual cash withdrawals from our post-tax account. I never bothered to convert the Excel date serial number to a conventional format, and now I have no idea which transactions fed the “Non-plan/budget/whatever” column. All on me, of course.
Here’s the last one. It’s our forward modeling. I won’t even try to explain it.
You might wonder why I didn’t clean these sheets up and organize them.
I’m one of those people whose tools might look all jumbled together, but I know exactly where each one is. What you’re seeing IS organized. But now I imagine getting gored in the liver by a raging bovine in Pamplona’s Running of the Bulls, and my poor wife having to decipher this mess. Nope nope nope.
After I shot Monster-Bubba and kicked Quicken to the curb, I switched to Mint.
Mint’s a hell of a lot better than Quicken in form vs. function, but I’d like it more if it wasn’t so buggy.
For example: when logging in, the first screen you’ll come to is the Overview. It’s a useful summary screen–accounts down the left, each of which you can drill down into, and a few bills-are-due alerts and ads on the right–but it takes forever for Mint to update account balances and transactions.
For example, five minutes ago I logged in to shoot some screen captures, and I’m still watching the thing refresh. See the bottom bar? “Refreshing your accounts?”
That happens way more than it should.
The accuracy’s not great, either. Despite what it’s telling you, $3,078,892.93 is NOT our net worth…it’s actually just shy of $2,235,000. What’s happened is that during the refresh process Mint created duplicates of several of our pre- and post-tax accounts. I now have to go in and delete them by hand, when I could be…oh…making sure my hammock is properly hung.
Click on Transactions in the menu bar and you’ll find yourself at a screen that mimics a checkbook register:
Immediate bullshit: I don’t have $853,818.85 in cash and I have no idea why Mint thinks I do. I mean…I WISH I had that much, but what I suspect is happening is that Mint is misinterpreting the duplicate accounts it created. Inaccurate and potentially dangerous.
Then there’s the annoyance of that Discover Card ad–right in my way when I want to view/edit the details of a particular transaction.
Mint has LOTS of ads.
Finally: see how I have 74 pending transactions? Many of them are money market duplicates. When I pay off a credit card bill, for instance, Mint shows both the money market sale and the credit card transfer. Technically correct, but this isn’t a screen where I should have to see it.
On the whole the Budgets screen is intuitive and works well. It’s not great at handling account-to-account transfers, but it more than makes up for that in its categorical detail and its ability to query for transactions.
I rarely use Goals, Trends, Investments, or Ways to Save. They’re geared more towards beginning investors–a point I’ll come back to in just a second.
Trends is your standard graphing app if you’re into such things. Investments attempts to collect your, you guessed it, investment performance and such into one place, but I found it to be much less useful than the account tools I get in my brokerage’s application. Your mileage may vary.
Goals and Ways to Save–frankly, you should steer clear of these. All sales pitches; every one. The Goals screen is especially insidious, since it’ll lead you through just enough calculators to invest you in the process before springing the pitch on you. Annoying.
The bottom line, I think, is that when Mint’s functioning properly it’s an OK for people who are relatively unsophisticated in financial management when compared to the FI/ER crowd, and consequently don’t need much beyond transaction management, budgeting, and glancing at investment performance. But if you’re more sophisticated or need deeper analyses–or if you’re a control freak like me–I think you’d be better served moving on to Personal Capital.
In the time I’ve been using Personal Capital (PC) I haven’t had to tweak it one bit to get it to do what I want, and its information updates quickly and is highly accurate.
I’ll take it.
PC’s user interface at first might look stripped down, but you’ll find there’s a great deal of detail accessible within two or three clicks. The design is no-nonsense and built around the “show up and get to work” principle.
When you open PC you go straight to your Investment screen; a tip-off that PC’s meant for people who are relatively more knowledgeable about investing than average, and who have a longer planning horizon than the next few paychecks or even the next few years.
Note, for instance, that the term “Cash Flow” is being used on the front page.
Also note the complete lack of ads, although I should point out that PC is in effect ITSELF an ad. Sign up and link your accounts, and within a few days you’ll be getting a low-pressure sales call from a PC advisor about buying the company’s investment management services. If you should turn these services down you’ll still be welcome to use PC for free, but I recommend having a conversation or two with the advisor if for no other reason than to get a second pair of eyes on your portfolio. I mean, seriously. I sat there and chatted with the guy for two hours without ever intending to hire them, and we both knew it the whole time.
As with Mint, PC’s Transactions page resembles a checkbook register. It’s equal in functionality to Mint’s, but I find the user interface easier–slice-n-dice buttons right at the top–and the lack of ads makes for a better experience.
The Portfolio menu gives you a number of functions unavailable in Mint; ones that in my experience are on par with if not superior to the tools available from my broker’s app. This is a huge plus to me: no need to jump around from website to website depending on which one best suits your needs at that moment.
Summary, Transactions, and Portfolio are your near-term functions, but for long-term financial management I’m impressed with Personal Capital’s Advisor Tools feature…particularly Retirement Planning.
Much like FIRECalc and other such calculators, edit your assumptions and PC will evaluate your retirement outlook with a proprietary Monte Carlo-style model. I like this a lot: we’re looking at the Big Picture here, and the fact that all the elements of my financial situation are gathered in one place makes it extremely easy to calculate and keep a constant eye on things.
To sum up, I think anybody who’s committed to FI/ER needs a tool that’s at least as suited to long-term planning as it is to day-to-day money management, and in this respect I think Personal Capital leaves Mint and Quicken and custom spreadsheet models in the shade.
So check it out, man…create a Personal Capital account by clicking the image below, link your assets and liabilities to it, then play around for a while. There’s a good shot it’ll streamline your money management approach, and save you some time in the process.