Organizing My Finances with Personal Capital

Organizing my Finances - Personal CapitalWhen it came to organizing my finances your boy was terrible.  I quickly learned that had to get myself together by organizing my finances with Personal Capital and fast!  While reading Rich Dad’s Cashflow Quadrant Book, I learned the importance and significance of Assets vs. Liabilities and Income vs. Expenses.  It’s not every day you come across a free app that organizes your finances in that exact same way.

Why Should I Organize My Finances?

Having my finances together and organized is extremely important, especially if I’m talking about being financially independent.  It goes well beyond logging into my bank to check my daily balance.  I needed spending trends, view of money coming in and out, where my investments are located, how much my investments are worth, budgets, credit scores, and even tax help.

Sure there are other apps like that have fantastic visuals with a similar organization but they are missing important information I need.  Not going to lie, at first Personal Capital was intimidating but it didn’t take long for me to figure it out.  It definitely made me re-think my whole financial standing.

Assets vs Liabilities

There is a big difference between Assets and Liabilities.  Once I figured this out, I knew exactly where I stood and what needed to change.  Let us begin!

Assets help bring in cashflow or is property (car, house, etc.) that can be sold for a profit.

This includes things like bank accounts, cars that are paid off, real estate,  investments, etc.  These are items that have monetary value.  Get it? Got it? Good!

Liabilities are the reason for cash outflow as these items have to be paid off.

These are debt items like credit cards, mortgages, loans, store cards, etc.  This is where all the money goes out and no money in to cover it.

Income vs Expenses

The income vs. expenses comparison should be pretty simple.

  • Income is money that comes to you like a paycheck/salary, investment income, etc.
  • Expenses are items that get paid out like a light bill, electric bill, cell phone bill, car repairs, healthcare, gasoline/fuel, taxes, etc.

Simple right?  good!  Let’s move on.

My Personal Capital

When I connected ALL of my accounts which include several retirement accounts with various amounts in them (the result of working in many places), different bank accounts, credit cards, personal loans, etc.  I quickly realized that I had way too much going on and needed to clean this stuff up.  Thanks to the overviews, layouts, graphs, and charts  I was able to make the right adjustments where needed.

Now that I can see my Income, Expenses, Assets, and Liabilities the cashflow became real.  Every transaction is broken down (I had to clean up a few), I understand my net worth and I can see trends that are useful and make sense!  Sweet!  …and then reality sets in.  There is work to do.

Know Your Money

My money knows me and I know my money.  Of course, I knew where every dollar was going.  The problem was I didn’t realize how many unnecessary transactions there were.  Additionally, I didn’t realize I could have combined some of these accounts to have better leverage for things like Buying Real Estate for Passive Income.  THAT is the real power the application provides.  The knowledge I gained reading the Rich Dad books were immediately put to use and it feels good!

At this point, I see money totally different.  I see finances totally different.  If I were to buy something, it was either a liability, expense or an asset.  In regards to FI, I wanted assets.  Something that would generate cash flow and in my new financial reconstruction I am now in a position to buy assets that will do exactly that.

Additionally, Personal Capital shows the rates on my credit cards as well! I now feel more confident in attacking the most expensive card first.  Then budget and track the payment progress.  Super cool!


There are several apps out there that are similar but this one has been extremely good to me for my personal finances.  I don’t use it for my business as I have a different software I use which I will review at a later time.  Just know it’s NOT QuickBooks…Can’t stand that software.


Latest Comments

  1. Geejay January 2, 2019