USAA Invests in Personal Capital - Should You? - Military Money Manual
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After the TSP, I invest my money in Betterment and Vanguard. I track all of my investments with Personal Capital. I also wrote a short, 2 hour book summarizing this site. You can buy it here.

personal-capital-beautifulI am a massive fan of USAA. I have been with the company for 7 years now and have been continually impressed with their service, professionalism, honesty, and cost. In all the years I have been with USAA, I have never once been charged a fee. Never.

Let that sink in. I’ve paid:

  • No overdraft fee (they offer free overdraft protection)
  • No checking fee (free check books)
  • No online bill pay fee
  • No monthly balance minimum fee
  • No direct deposit fee
  • No early pay off penalty on the cadet loan
  • No fee for mobile check deposit (a technology USAA rolled out YEARS before any other company)
  • No ATM Fees (this has saved my $100s over the years)

USAA: Best Bank for Military Personnel

I’ve had a cadet loan, renters insurance, CDs, checking accounts, savings accounts, car insurance, homeowners insurance, and purchased a home through their Home Circle program (and received a check worth my first mortgage payment in return, nearly $1000!).

USAA is member owned and pays a dividend to their members nearly every year in the form of a “subscribers dividend.” This member ownership, similar to Vanguard’s corporate structure, means that they can take the long view and do what’s best for their members, rather than quarterly profit focused shareholders on Wall Street.  USAA’s customer service is legendary and consistently tops the review charts. I’ve never left a phone call with them dissatisfied.

The bank’s commitment to veterans, active duty service members, guardsmen, and reservists is outstanding. They make life incredibly easy for deployed servicemembers, offering special car insurance rates on stored vehicles and multiple deployment benefits. I save at least a couple hundred dollars on auto insurance whenever I deploy. Besides that, the automatic bill payments and online banking mean I never fall behind on my mortgage or student loan payments. USAA removes financial stress when I’m on the road, letting me focus on the mission.

USAA Trusts Personal Capital, Invests Millions

Recently, USAA made an investment in another company that I’ve come to trust and use nearly every day: Personal Capital. PC raised $50 million in their recent Series D funding. As a rapidly growing company (42.7% in just the last three months!), PC needed to raise additional capital to continue their growth in the online advisory services sector.

Personal Capital’s mission is to better financial lives through technology and people. Sounds a bit like what I’m trying to do with this site. With that mission statement in mind, it’s no wonder that USAA made the investment when they were given the opportunity.

Personal Capital combines the best of technology and people to improve your financial life. Technology makes your money and investments easier to understand and monitor right on your phone or tablet. People offer unbiased advice when it comes to meeting your financial objectives.

PC’s advisors are not compensated based on the mutual funds they sell you or for steering you towards any particular financial product. They simply offer sound advice and recommend individual stocks combined with ETFs to offer precise asset allocation and diversity in your portfolio. They base their recommendations on back tested data, combined with tax loss harvesting and extremely low costs.

Low Cost Wealth Management

How low are their costs? 0.89% on your first $1 million under management. For every $100,000 you have invested, you’ll pay about $890 annually. This is definitely not as low as the TSP (about 0.03%, or $30 per $100,000 invested) or managing your own portfolio through Vanguard (about 0.20%or $20 per $100,000). However, remember what you get for this fee: a personal investment advisor along with Personal Capital’s powerful wealth management software.

If you’re not the most disciplined investor, not the best money manager in the world, or you don’t have time to rebalance or research your investment options, this fee will definitely pay for itself over time. This is the type of service that high net worth individuals used to pay much more to access and you had to have a much larger portfolio before you would even be considered as a client. At Personal Capital, you only need $100,000 $25,000 (as of Jan 1, 2016) of investable assets to open a wealth management account.

I’m definitely a finance nerd and enjoy investing, rebalancing, researching, and managing my own investments. So I invest in the Roth TSP and Vanguard Admiral shares for the lowest fees available.

I still use Personal Capital to see all my investments in one place and to track my investment performance. The clean and simple net worth, performance, and asset allocations graphs that PC generates for me make it well worth signing up. And of course the price is right: free.

Right now I like doing it all myself, and if you’re a DIYer like me, you’ll probably want to just use PC to track your investments and net worth. But one day I might have so much money and not so much time, or might not enjoy managing my money as much anymore. I’ll want someone else watching my money for me. With USAA’s investment as a sign of good faith, Personal Capital is the company I want managing my money.

Future Partnership

usaa-personal-capitalWhat does the future hold for USAA and Personal Capital? Just as speculation, I would not be surprised if USAA members will soon gain access to PC’s outstanding website and if USAA will adopt some of PC’s wealth management services. USAA could learn a lot of lessons about website design and creating useful graphs to track expenses and income from Personal Capital. I also wouldn’t be surprised if Personal Capital could see a greater influx of military personnel into their wealth management system, which might mean better TSP account tracking inside PC’s software.

Regardless of what happens, I’m excited that two of my favorite companies have formed this investment partnership. USAA has years of experience in being the best bank available to military service members and their families. Personal Capital has the technology and advisors that can reduce costs and increase returns for millions of people across America.

How about you, reader? Do you have enough discipline, time, and knowledge to manage your own portfolio or does the idea of a wealth management company like PC sound like a worthy expense? There’s no shame in paying a little bit for a finance nerd to manage your portfolio for you and help you grow richer!

2 Websites I Use to Achieve Financial Independence Faster

The best way I know to achieve financial independence is to keep your investments simple, diversified, automatic, and low-cost. Costs eat into your returns like you wouldn't believe! A 1% difference in expense ratios can mean $100,000s lost to fees over a lifetime of investing.

Even if you're a DIY (do-it-yourself) investor like I am, you need to check out Betterment. You can read my full review here, but the bottom line is for only $250 per $100,000 invested (0.25% expense ratio) you get simple, diversified, and automated investing. In addition every account now gets free Tax Loss Harvesting+ features, which should increase returns for the average investor more than the minuscule management fee.

If you're not a DIY investor or are just getting started with investing, then you definitely need to check out Betterment. It's what I recommend to my family and friends who aren't strong investors or don't care to learn about asset allocations, diversification, or rebalancing.

I have investment accounts all over the place. To keep track of all of them in one place I use Personal Capital. It combines all of my accounts, shows me where I may be overpaying in fees, and provides beautiful charts showing my overall asset allocation and performance.

I use Personal Capital to track my Roth and Traditional TSP, Vanguard IRAs, banking accounts, SDP, and my Betterment taxable account, all in one place. It's free, secure and presents me with a one-stop dashboard so I can see all my money on one site.

Read my full review of Personal Capital and see how easy it can be to manage your investments in one place. Trust me, once you try it, you'll love it.

P.S. - If you have over $100,000 of assets and a 401k, you really need to run the Personal Capital 401k Fee Analyzer.

USAA Invests in Personal Capital – Should You?

4 thoughts on “USAA Invests in Personal Capital – Should You?

  • November 14, 2014 at 15:31
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    Have been using PC for the past 1.5 years and USAA since I received my commission. Couldn’t be happier to see USAA investing in them! Keep up the great work with the site, this information is good knowledge!

    Reply
  • November 17, 2014 at 07:31
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    I am hoping that USAA can adapt and/or integrate some of the PC features in their dashboard and budgeting. It would save me from having to look at both all the time to get what I need. Although my fear is that USAA will be a product of its own success. A lot more radio ads, sponsorships, etc. Although their customer service is still great, their prices over the last few years have not been. I still keep my banking with them, but I no longer have my auto insurance through them, and moved my investments to Vanguard a long time ago. Believe it or not, Geico quoted me at half of what USAA was charging, same coverage. I couldn’t believe it, and was quite skeptical as I have been a USAA member since I started driving. But I have been paying less each month and will happily invest the savings, and if USAA is ever able to meet or beat the prices, I will go back to them.

    Reply
  • July 21, 2015 at 12:19
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    I’m a Usaa member going on 12 years now. Although I do just about everything with them, investments are not one of them. To get the wealth management with them the minimum entry is somewhere north of 500k and about a million for individual stocks. I’ve also checked out personal capital but I felt that the advisor they assigned me didn’t truly know my needs. I’m a guy that likes face to face relationships with an advisor and there are other retirement tools out there which are far more advanced such as a LIRP. A personal fee based advisor who knows what they are doing is the way to go, especially when you can call them up on a weekend or have lunch with them during the week. If your advisor doesn’t personally know your family then they really don’t have a vested interest in your success at saving for retirement.

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  • December 23, 2015 at 12:02
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    I just joined Personal Capital. Have a good portion of my investments with USAA and can’t get PC to update my USAA accounts. Frustrating. And they are partnering?

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What are your thoughts?