Where is Your Money REALLY Invested? Do You Know?

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where is your money really investedIf I asked you, “Where is your money really invested?”, what would your response be?

For 95% of the world, they’d probably say, “In my 401k…” and then they’d look at me like I was missing half my brain, because where else could their invested money possibly be?

First of all, there are plenty of other places to invest your money outside of your 401k, but that’s not even what I’m talking about. What I’m saying is “Within your 401k, what is your money actually invested in?” Most people have absolutely no idea, and it’s probably killing them and their future retirement plans.

Where Is Your Money Really Invested?

This post contains affiliate links, but it costs you nothing and I actually get paid a little bit for all the work I do around here! 😉

In finance speak, what we’re really asking is, “What is your asset allocation?”

In other words, how much money is invested where?

Do you have some in:

  • Real estate?
  • U.S. Stocks?
  • International Stocks?
  • Government Bonds?
  • Corporate Bonds?
  • Large-cap, Mid-cap, Small- cap?

And what percentage of your total assets are in each? Is that appropriate for your future goals?

Now, before you go running for the hills, figuring this out is WAYYYY easier than it sounds.

All you have to do is sign up for a Personal Capital account. It’s absolutely free and it’s a tool that you’re going to want to hold onto for life. Basically, it’s Mint.com on steroids, and it will show you exactly what all your money is invested in — even if it’s all stashed away in a Vanguard Target Fund.

How to Sign Up for Personal Capital

Get started by simply clicking here (or click the image below). The link will take you to their sign-up page. Just enter your email, a password that you won’t forget, and your phone number (don’t worry, they won’t call you – it’s for security), and you’re well on your way!!

where is your money really invested

I know this seems a little sales pitchy already, but trust me, you’ll be happy you signed up. Stick with me.

Next, enter your name, age, when you’d like to retire, and how much you already have saved. This will let Personal Capital know what your targets are so they can get a sense for how aggressive you might be saving and if you’re on track to hit your goals. It’s a simple step, but incredibly important if you want to win financially!

And now for the fun part! Entering in all your accounts so that you can discover:

  1. How much you actually have invested, and answer the question…
  2. Where is your money REALLY invested

And, once you finish entering your accounts, it’s time to have some fun (well…fun for nerds like me anyway – hopefully you’ll think it’s fun too)!

Answering the Question: “Where is Your Money REALLY Invested?”

Now that you’re signed up with Personal Capital, figuring out how your money is allocated is a piece of cake.

where is your money really invested

From your Personal Capital home page, just hover over “Investing” and then click “Allocation”.

Annnd…. viola!

There’s your asset allocation! I told you it was simple!

In the example image below, approximately 80% of the investments were in stocks, 13% were in bonds, and another 7% was split between cash and alternatives (typically some type of precious metals as a hedge to the market).where is your money really invested

And, if you’re super nerdy like me and want to know how your stocks and bonds are divided, you can do that too! Just click on the rectangle of interest and Personal Capital will show you even more details about it.

Check it out! Isn’t this awesome?! where is your money really invested

 

Is Your Allocation Right for You?

So… the charts are awesome and all…but what does this actually mean for you? How do you know if your money is allocated appropriately to meet your future goals? In other words, how can you be sure you’re invested in the right stuff?

There are two easy ways to figure this out.

  1. Use the Personal Capital tool for the hands-off approach, or
  2. Use the rule of ‘120 minus your age’

Verify Your Allocations with Personal Capital

Again…this is super simple. Ready for one more button click? Here we go. 😉

where is your money really invested

Hover over “Planning” and then click, “Investment Checkup”.

The tool will kick off immediately and within 10 seconds it will tell you if you’re:

  • investing too aggressively,
  • not investing aggressively enough, or
  • if your porridge is juuuuust right (I mean…your investments are allocated perfectly)

That’s it! If you’re too aggressive, then you’ll probably want to dial back your stock investments and shove some more money into bonds. And if you’re not aggressive enough, then you’ll most likely want to buy up some more stocks!

Use the Rule of ‘120 Minus Your Age’

Not sure what percentage of your portfolio should be invested in stocks? I live by the rule of ‘120 minus your age’.

Let me explain by using myself as an example. At this current moment, I’m 32 years old.

  • 120 – 32 = 88; I should allocate 88% of my investments into stocks

Again, super simple, right? From here, I’d just add up all the percentages of stock that I own to see if I came up with 88%. If not, then I might want to get a little more aggressive with my allocations.

It’s Your Turn!!

Alright, you saw how cool it can be to walk through your investment allocations with Personal Capital. Why not try it for yourself? (Get started here)

  • It’s free to sign up
  • You’ll become more knowledgeable about your investments and your financial future
  • And you won’t get any spammy phone calls like you would from other investments sites

There’s nothing to lose and everything to gain!

So what were your allocation like? Where is your money really invested??

Personal Capital is an award-winning financial tool that has helped thousands of people get a handle on their money. Use them to check out your net worth, analyze your portfolio, and plan for your future.

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6 comments to Where is Your Money REALLY Invested? Do You Know?

  • Thanks for the great tool!! I am one that doesn’t have a great answer to your question either. I just know I max out for my employer to match and have other accounts. Ha! Thanks for the tool and tips!

  • whiskey

    Haha! Yes I do know…
    Now “Most people have absolutely no idea, and it’s probably killing them and their future retirement plans.”
    That is the most understated item Ive heard in a while. I have talked to friends and family “oh Ive got my $$ in my 401k blah blah…”
    Me:”Well you’re saving that’s good. But what is it really invested in? Whats the total cost?”
    “Well its thru the company and they had so many to choose from. I just picked the one that looked like it would return the most money”…
    And the convo goes from there as one would expect.
    Best advice Ive ever heard: You are responsible for your money. No one else is going to take care of it the way you would. Seek advice of course but be responsible….
    Bet you can guess who said that on his daily talk show… hint hint wink wink…

    • You crack me up, whiskey. Yeah…it’s pretty hard to have a conversation with someone that doesn’t respect their money at all. You want to warn them that they’re going to regret their decisions once they’re older…but you know they’re not going to listen. So, sometimes I just decide to keep my mouth shut.

  • Nicole

    I have learned a lot since joining that site through your link. It’s kind of addicting. I would be able to answer your question as well. Thanks for the “rule” you posted… gotta do some shifting.

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