A big problem with planning for your financial future [1] is that it’s hard to imagine what it will look like. Occasionally we get glimpses: a quiet beach, a couple dressed in loose, white cotton, walking hand in hand – they should be in their late 60s but don’t look a day over 45. They’re happy, care-free, secure. The whole scene is bathed in a soft golden light.
There’s a dog…
Hang on, I’ve never owned a dog!
Oops, that’s the cover of a pension sales brochure – it’s not my retirement at all.
A new view: MoneyVista
MoneyVista [2] is a free financial planning website that offers another way of looking at the future, through the lens of hard numbers and pastel coloured graphs.
It enables you to feed in your finances today and plot how that might look tomorrow, next year, a decade from now, when you retire, when you die…
MoneyVista fuses decent web design with various number-crunching tools to help you understand whether your goals can be met. And, if not, what you can do about it.
It’s a helpful, hand-holding experience of the kind that is increasingly replacing expensive human beings with a series of online prompts.
How does MoneyVista work?
You input a piece of your financial life at a time – income, expenses, savings, investments and so on – and by the time you’re done, MoneyVista has rearranged the puzzle into a picture that you can grasp.
In a sense, it solidifies the nagging questions that haunt the back of your mind. Can I pay my mortgage? When can I retire? What will my income be? The ‘what if?’ wraiths are dragged into the light and either banished or warded off with a financial prescription and some nice charts.
MoneyVista shows you what’s left of your life as an Alpine cross-section of peaks, plateaus and plunging valleys.
[3]
It’s an odd experience to see the dip in the graph that marks your entire estate passing into the hands of your beloved – followed by the moment two years later when he or she doesn’t need it anymore either. (At least according to the life expectancy figures served by the software!)
From now till then you can account for all the other milestones of life:
- Sending the kids to University [4]
- Paying off the mortgage
- The round the world trip
- Retirement
- Buying your own Lamborghini / Super yacht / Death Star
By telling Vista what you’ve got, what you’ll earn, how much you’ll put away and spend, it can compute the outcomes like some computer game Sim Wealth.
Playing with your future
If you don’t know where to start with your finances, then MoneyVista is an excellent base camp.
And if you’re already well on your way, then it’s a good staging post to help you take your bearings.
What if I change my retirement date? What if returns aren’t as good as I hope? If I want to travel the world, how far does that set back my other goals?
Your financial lifeline is shown in terms of your net income and your net assets (the green graph and the black dotted line in the pic above).
Goals show up as little pins – green means done by your target date, red equals falling short.
As your cursor traces your event horizon, little commentaries pop up to explain what’s happening:
In October 2038 the State starts to pay you a pension of £147 before tax.
It’s like a little text adventure game [5], although you definitely never want to go south.
Sections such as Insurance enable you plan for unpalatable scenarios like what happens if I die tomorrow? Would my existing protection policies and estate really secure Mrs Accumulator’s future income?
If not then how much would need to be diverted from other sources, and how much damage would that do to the master plan?
Actually, another possible benefit of using MoneyVista is that it’s a relatively user-friendly way of encapsulating your plans for the benefit of a partner who couldn’t give a fig for how it all works.
In your absence, your significant other could log in and get a coherent view of what you’ve stashed where and how it hangs together.
At a glance you can see:
- Your net worth
- How much you owe
- How much you’ve put away
- Whether you’re on track to hit your goals
Sound good?
Not so good
The downside is that MoneyVista is a lot of work to set up. It doesn’t ask for the keys to your data kingdom – unlike say mint.com [6] – so there’s less fear of cyber mugging. But you do have to input all the data manually.
And MoneyVista wants to know everything. It’s a big picture-planning tool but it draws upon every pixel of your financial life.
It took me hours to type in bank account details, investment holdings, insurance policies and budget lines – and I already had everything recorded on spreadsheets. If you’re starting from scratch then I shudder to think.
No doubt some will find the internal examination cathartic and others will turn and flee, but at least MoneyVista’s ruthless rummaging is for a purpose. It’s comprehensive and finances are complicated.
Or – to put it another way – you don’t get something for nothing.
Speaking of which, as the website says: “Right now MoneyVista is completely free.”
Which implies that at some point in the future it won’t be. MoneyVista is owned by Royal London – a big financial services provider, especially in the pensions sector.
The maxim “If you’re not paying for it, you’re the product” seems apt here as you’re handing over a lot of data in exchange for a good planning tool. It must have taken a sizeable investment to produce something this detailed that doesn’t distress the eyes.
Personally I wouldn’t pay for it because it doesn’t replace the sheaf of spreadsheets and notes that currently document my financial plan.
- MoneyVista doesn’t allow me to track the amount I spent in January versus February for example, so it won’t replace my budget spreadsheet.
- It doesn’t show me how my investments performed last year versus the year before, so it won’t replace my portfolio tracker.
- It doesn’t even tot up my savings and interest on a separate line – even though it obviously knows those numbers.
Every section left me wishing, “If only I could customise that bit,” or “If only it did that, this would be brilliant.”
And because MoneyVista shields you from its internal workings, it can be difficult to know how to fix a result that doesn’t make any sense. You can end up pulling levers at random rather than just popping open the top and rewiring the problem yourself.
Moreover, MoneyVista doesn’t save you the trouble of educating yourself. Just because it says you can pay your mortgage in 2031 doesn’t mean you will.
You need to know how to interpret the results, which built-in assumptions you should play with, and what you’re walking into if you choose an adventurous asset allocation. Automated answers aren’t a substitute for fully understanding those answers.
Try it
That said, the section on risk is one of MoneyVista’s strongest points. I’ve seen few portfolio comparisons more intuitive than its bald match up of the chances a balanced investor will suffer a 10%, 25%, or even a 50% loss versus the much higher odds of loss for an adventurous investor.
Meanwhile, it’s also fun to see how your expenditure compares to the rest of the country. It seems I spend 20% more on food than the UK average.
MoneyVista will email you when you need to take action, and it regularly sends me links to well-written and useful financial guides.
There’s a list of other features here [7].
The fact is that it’s the most powerful financial planning tool anyone’s ever offered me for free.
MoneyVista for nothing
MoneyVista is reasonably user-friendly and has something to offer novices and masters of the universe alike. If you would benefit from a single snapshot of your financial present and future then give it your time.
Take it steady,
The Accumulator