Investment Workshop 5: Setting Up Personal Capital

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Wanderer

The Wanderer retired from his engineering job at a major Silicon Valley semiconductor company at the age of 33. He now travels the world, seeking out knowledge from other wealthy people, so that he can teach people how to become Financially Independent themselves.
Wanderer
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Hello again and welcome back to the Millennial Revolution Investment Workshop! New readers, please click here to start from the beginning.

mrinvestmentbanner

Today we’re going to take a look at how the various accounts show up on Personal Capital.

The reason we wanted to use Personal Capital in the first place is that because

  1. It’s free so why not
  2. It has some nifty visualization tools we can use to see how our portfolio is doing.

We are going to dive into some of these tools right now.

We start by logging into your Personal Capital account. If you haven’t created one already, use this link if you’re American, and this one if you’re not.

Step 1: Linking Your Trading Account

We will be using Questrade for Canadians and TD Ameritrade for Americans. You can use any supported brokerage but for the purposes of this workshop we’ll be sticking with these 2.

1. Click the little + symbol in the top-left corner to add a new account…

pc_link_1

2. Find your bank by typing in it’s name…

pc_link_2

Login.

3. Once that’s done and it’s finished syncing your transactions over, we can see that our initial buy transactions have been recorded. As we can see, our portfolio is already up a teeny tiny bit, but that’s mostly because of random movement in the markets.

pc_balance

4. Click over to Portfolio -> Holdings to see can see how our portfolio has been behaving. So far, nothing too fancy as the market hasn’t really done too much over the last week.

pc_holdings

5. For another view, we can click on Portfolio -> Performance.

pc_performance

Nothing too interesting here so far, but that will obviously change as time goes on.

6. Now the interesting part. Click over to Portfolio -> Allocation. You should see something like this.pc_allocation_unclassified

Most of our assets are lumped into that big grey box labelled “Unclassified.” This is because Personal Capital doesn’t know what to make of our adorable Canadian ETFs, so we have to do a little extra work to tell the software what we’re holding. Fortunately we only have to do this once.

If you’re American, skip to Step 3 (because Personal Capital should do Step 2 automatically).  If not, continue.

Step 2 Manually Classifying Your ETFs:

1. First, we click that grey button “Manual Classifications” in the top-right corner. This should take you to a screen that looks like this.

pc_manual_12. Now we have to click through each asset and manually classify each asset. We will start with VUN.TO.

pc_vun_13. We want to use Method 2: Enter the percentage of each asset class.

pc_vun_2

We want to put this at 100% US Stocks since this is our Total US Market ETF. The sub-categories on the right I copied over from the American VTI holdings, so feel free to copy my work. After you’ve entered this in, hit Save.

4. Now we do XEC.TO.

pc_xec_1

5. Again, click Method 2: Enter the percentage of each asset class.

pc_xec_2

XEC is our emerging markets fund, so we want to classify it as 100% International stocks, then sub-categorize it as 100% Emerging.

6. Now XEF…

pc_xef_1

pc_xef_2

XEF is our EAFE ETF, which is of course 100% International Stocks, 100% Developed.

7. VAB is next.

pc_vab_1

pc_vab_2

VAB is an International Bond (since it’s not US, as defined by Personal Capital), and it’s a government bond index, so we will sub-categorize as 100% government.

8. And now finally VCN.

pc_vcn_1

pc_vcn_2

This is our TSX ETF, which we shall classify as International Stocks, Developed.

9. OK great. Now if we were to go back to our Manual classification screen, every ETF should now be labelled as “Manually Classified Holdings.”

pc_manual_2

Step 3: Viewing our Allocations

1. Go to Portfolio -> Allocation.  You should see the following:

pc_allocation_classified

Play around with this screen. You can, for example click the boxes and drill down to see how each category is divided. For example, if you click “International Stocks,” you should see something like this.

pc_allocation_drill_1

2. And if we were to drill-down further, we would see our actual ETFs and their weightings.

pc_allocation_drill_2

When I was investing ourselves, I had to do all this crap manually with an ugly spreadsheet, so this acts as a nice double check that everything’s going the way it should be. Right now, all the holdings are skewed by 50% since I’m holding the next $500 I’m planning to invest in the trading account as cash, but once that gets deployed these percentages should look close to our target allocations we decided previously. If they drift off target, it should be pretty easy to spot using this interface.

And that’s it! Feel free to play around with the rest of the features of Personal Capital as we will be using this to track our performance going forward so I don’t have to make 2 sets of screenshots each time for our Canadian and American portfolios.

So that’s it for this week. Questions? Comments? Problems? Let’s hear it in the comments and we will do our best to help.


WORKSHOP TOOLS:


How much does it cost to participate in this investment workshop? NOTHING. Because that's how we roll. All we ask is that you sign-up using the following affiliate links to keep it free forever:


For Canadians:
Questrade
Personal Capital


For Americans:
TD Ameritrade
Personal Capital


Disclaimer: The views expressed is provided as a general source of information only and should not be considered to be personal investment advice or solicitation to buy or sell securities. Investors considering any investment should consult with their investment advisor to ensure that it is suitable for the investor’s circumstances and risk tolerance before making any investment decisions. The information contained in this blog was obtained from sources believe to be reliable, however, we cannot represent that it is accurate or complete.

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30 thoughts on “Investment Workshop 5: Setting Up Personal Capital”

  1. Awesome post! I have not set up a personal capital account due to the posts from others with regards to security and Questrade not being responsible if your passwords are stolen, etc. Is this true? Does Personal Capital have any type of insurance to protect the end user (me) if something like this was to happen? Thanks in advance!

    1. No, you don’t have any protection IF your details get stolen. That is a major IF though. Your details are not held on your account, only on PC servers. Their servers are extremely secure, probably more secure than your banks server, so the likelihood of your details being stolen is minimal.

      Personally, I don’t feel investment account tracking is necessary. It’s not something you need to see regularly, it’s just something “cool” to look at. You can do it all yourself once a month or so quite readily without much of effort.

      As such, the risk vs reward isn’t worth it IMO. Unlike Mint and YNAB, where the risk is much lower (you can’t lose a lot from a bank account, compared to an investment account) and the reward is much higher (tracking spending is very time consuming if done manually).

  2. First off let me thank you both for showing awesome stuff regularly to us wannabe FI-ers. You are a motivation to a lot of us, so keep it up!

    Do you by chance if this would work with European accounts as well? As far as I know they don’t as institutions generally don’t allow 3rd parties to access transaction information. (might have to do something with data privacy laws).

    Alternatively I would be even willing to update transaction information manually, and use personal capital for it’s analytics tools, but a couple of months back I could not find a way to do that either. Any suggestions on that?

    Thanks!

    1. Hmm I don’t think so. The PC part is just a convenient display layer that I like to use, it’s entirely possible to do it all with Excel spreadsheets yourself, so you may just have to do that.

      1. Thanks. After tinkering with it yesterday for way too longer than I should have I could at least figure out the investment and retirement planning part which was really what I was curious about. I track all our transactions in an app already so I have detailed transaction data in excel, but it was nice to see the simulations for the future and the asset allocation part.

  3. Thank you for the tutorial. I don’t think it matters, however I noticed that my Balances graph looks a little different than yours. The blue field is a covering a wedge portion on the right side of the graph where as your’s seems like a large triangle. My dates are showing the 24-30th. ( I started a day late). I noticed your time line was for 30 days. I tried changing it to match yours and it seems that the wedge field became smaller. Is this becuase you open up this account in October and funded it then?
    Also, under the portfolio tab, where it says my index’s, it shows 1 day 0% and 30 day 0%, Where as yours has some values. I want to ensure that I’m following along as closely as I can. Your insight is appreciated.

    1. Yeah I had the accounts opened for some time for testing purposes before I actually started the workshop. That’s why there’s more history. I also remember the graphs not looking right until at least a few weeks of history had passed, so just wait and it should fix itself.

  4. Cool post, its nice to see the process because most bloggers only show you the final screen. That said, to me the main drawback of this is security. Personal Capital has all of your account log in information. Now I know that they say they use encryption, but so does everyone else. Trust us, you are safe… But isn’t this exactly what they said about buying overpriced houses?

    There are two offline tools that one can use that do not require password storage: Quicken Premier – currently 65 US dollars on Amazon, and Microsoft Money Sunset Edition. The second one is free and has been kept alive by enthusiasts. Bonus points on the second one that you can modify the python code yourself and keep updating it to the latest encryption methods if you are so inclined.

  5. Hi, in workshop #1 you mentioned that you would get around to discussing rrsp’s and tsfa’s in a later post. Since this hasn’t been discussed and we’re already making purchases I was just wondering what type of account you were using for Questrade.
    If I have ETF’s setup in an rrsp how do I invest 40+k per year to meet my retirement goal when there is an annual rrsp contribution limit?

      1. Yeah it’s in my queue. I’m doing everything in a non-reg account because my RRSPs and TFSAs are taken up by my other investments, but don’t worry about putting the wrong thing in the wrong account because you can always fix it later by transferring assets between accounts.

        Short answer is if you have enough room in your RRSP’s or TFSA’s to contain your entire investment portfolio, do it in there first before investing in non-reg.

        1. Similar question to the others who are looking forward to the RRSP / TSFA question (which I know will be discussed in a future post). But I’m just wondering, since I do make regular contributions to both accounts, if it would be counterproductive to have some of the same ETFs in both accounts? Or is that actually extra awesome? 🙂 I’m not really preferring to make my RRSP all bonds and my TFSA all equity, for example, as at this point my RRSP is about three times the size of my TFSA.

  6. What made you switch from investing on your own to having someone else managing your investments ?
    What value does a professional money manager bring vs. DIY ?

    I have always been a DIY investor(reading books, following blogs), but lately I’ve been considering having a professional either take over or have a second look at my portfolio.

    1. Always start by educating yourself and knowing what you’re talking about. An investment advisor should never replace your own knowledge, that’s how people get scammed.

      For us, an advisor made more sense when we approached retirement because investing for income is a little more complicated than investing during your accumulation phase.

      But again, keep reading, keep learning, and get informed. An advisor should supplement your investment knowledge, not replace it.

  7. In the past you have highlighted your dislike towards Mint for budgeting purposes, because it is not secure due to having to provide your bank details.

    However, now you are advocating for PC, which is arguably even riskier, since you’re not linking just a bank account, instead you’re linking every account of every investment portfolio you own. If someone steals bank account information you could lose your checking account money, if someone steals all your investment account information, you could lose your entire life savings.

    Just wondering why you’re on board with this but not Mint?

    I gave up on Personal Capital after the first month or so, partly due to this and partly because it was way too buggy for my liking. It did not extract accurate information from Questrade whatsoever, to the point I had to manually figure a lot of it out. It became more work than it was worth. It did have a few cool features to it though, but it wasn’t worth the risk for me.

    I don’t find tracking investments manually to be very difficult, simply because you only have to do it once a month or so, unlike budgeting where you have to track every expense constantly. The amount of time and effort the likes of Mint and YNAB save is substantial, unlike PC which is really just a bunch of graphs you could make yourself relatively easily.

    1. Yeah when we were investing we did all our tracking with our own spreadsheets, but when it came time to run this workshop we realized the workload in doing the same level of tracking/analysis ourselves would make running this every week unworkable. So it was either use PC or don’t do the workshop at all.

      If you’re comfortable doing all the tracking in your own spreadsheet, feel free to do that instead of using PC.

      1. So you’re saying you wouldn’t use PC for your own portfolio?

        I’m curious because I see all the big finance bloggers promoting it and saying how amazing it is, but all I can think about is how much are they getting paid to promote it. I find it hard to believe people who have earned millions of dollars in their portfolio would put their account information onto a website like PC.

        They need to introduce a manual way of inputting your stock holdings, if they did that they would scoop up a huge amount of the doubters.

        1. PC didn’t exist (or if it did we didn’t know about it) when we were building up our own portfolio. Now that we know about it, we will be test driving it in the workshop and see how it goes. We may end up liking it or hating it, but either way it should be interesting.

  8. I signed up for PC to show my support, but I, too, balked at the privacy issues and didn’t link to my investment accounts.
    A Reddit thread suggested that you can use Google spreadsheets instead. Does anyone know how to do this easily?
    Thanks!

    1. I track my own investments on Google Sheets and once it’s all set up, it’s pretty easy. All you need to do is update it once per month, so it’s not very time consuming at all.

      The laborious part is the initial set up. It’s far too much to describe in one reply to a message as there are several steps to it. All you really need to know is:

      1) How many units of each ETF you own
      2) What the average cost per unit to you was
      3) What the current market price of each unit is

      If you simply record that information at the end of every month you can glean all sorts of graphs. This information can tell you your return on investment on a monthly, quarterly, annual and all time basis. It can tell you your current asset allocation (how much you have in stocks and bonds) and where your money is being held (TFSA, RRSP etc.). I’ve even created a calculator that tells me if, say, I want to invest $1,000, where to put that money exactly in order to keep my allocation correct.

      The key is to keep the end of month balances each month, rather than replacing the prior month. So have the ending balances for September, October, November etc. all in one sheet, then I like to create all the graphs in another sheet for a visual analysis.

      The most you will have to do on an ongoing basis is perhaps update some formulas, and link your graphs to include the latest data every month. It really shouldn’t take longer than 30 minutes per month to get just as much information as PC provides you.

      In fact, I really dislike PC because you never get to see the data behind the graphs. It tells you that your portfolio has increased by 1%, but never actually shows you the numbers behind that, you just have to believe it. Sometimes I prefer to look at the cold hard numbers than a load of graphs, which is why tracking it manually actually provides far more detail than PC does.

      I’m not aware of whether there is a spreadsheet out there for people to use to track their investments, but making your own shouldn’t be too difficult if you know your way around Excel and some basic math to calculate ROI and allocation %’s

        1. I love Google Sheets for this, and like Vancouver Brit says, you can set it up to do exactly what you want – more flexible than services like Personal Capital, just somewhat more work to set up and keep updated. I think it’s fun to update and play with it, but I’m weird. 🙂

          You can even set it up to pull the current market price per unit of your ETFs automatically, using a formula like this:

          =GoogleFinance(TSE:VCN)

          where VCN is the ticker on the Toronto Stock Exchange (you don’t have to specify the exchange, but if you don’t, it’ll default to the NYSE and won’t always pull the correct data if you’re actually using a different exchange).

          I do track my historical data too, so I can have some pretty graphs to show my progress. And return and inflation-adjusted return.

          …If you’d like, maybe I’ll strip out my data and post a link to an anonymized version, to give you a place to start.

          1. Lynne, you are brilliant! Thanks! I feel like I’ve been stuck in the stone age while people like you have moved on.

            The link goes to a version in your trash folder, so you probably want to link to a different version. Thanks again.

            1. Oh, silly me! The link is right, I just apparently deleted the wrong thing when I was cleaning up versions afterward. It’s back out of the trash. 🙂 Thanks for the heads-up!

              Good luck! After a while all of this becomes very easy to do, but I remember it was more daunting when I started. 🙂

  9. I built my own python scripts, to take the CSV files you can download from TD Waterhouse, and generate pivot table type excel results. It takes a bit of technical knowledge but this makes generating your own asset allocation charts and graphs only take 2-3 minutes to download all CSV’s (one for RRSP, one for TFSA, etc.), and then run the script. This also lets you combine your spouse’s account and your together in the same charts and graphs.

    https://github.com/dgmckenna/InvestingCSVtoPivotReports

    1. David, I think this is powerful. I’d have to figure out how to use Python, but I really appreciate you sharing it.

      Just one comment. You mentioned:
      “Market value, filtered on one date, showing account type holdings, by category
      This allows you to see if you have something that you shouldn’t in a certain account.
      Ie. You want to hold all REIT’s in an RRSP, and you see some that are in a cash account.
      ie. You want to hold all International in a RRSP or TFSA, but you see some in a cash account.”

      If anyone wants to educate me on asset allocation, including for a corporate account (could be a future post, if Wanderer feels up to it), that would be fantastic.

  10. Dear FIRECrcker and Wandeerer,

    Does Personal Capital work for and connect to all the Canadian Banks and Brokerages? I know at one time they did not. Has this changed recently?

    How comfortable are you with safety issues? I think it was Mr. Money Mustache who said that Canadian Banks will refuse any compensation following hacking if they learn that accounts were linked to Personal Capital. What do you think?

    Thanks for all the information you share.

    1. I don’t think it connects to other Canadian banks, but it does connect to both Questrade and TD Ameritrade which is why I chose it to create pretty graphs and stuff for this workshop. If you can do all the tracking yourself in Excel as some of our other readers have done, feel free to use that instead. I just wanted to spend our time talking about investing rather than supporting a million different spreadsheets.

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