unofficial microsoft.public.money FAQ and A
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Q) How can I adjust the asset allocation of my investments?
A) Money has only limited asset allocation capability and some features just plain don't work. (This much improved in Money 2007 so if this is important to you, then consider upgrading.) First, we'll review available Investment Types and Asset Classes, and then we'll look at what you can and cannot with asset allocation in various versions of Money.
When you first tell Money about an investment, you must assign it to one of these Investment Types:
2. CD or US Savings Bond
3. Equity or Index Option
4. Money Market
5. Mutual Fund
7. Employee Stock Option
This is a pretty comprehensive list, but if you have investments types that are not here, then the Money reports that use these types won't be very useful to you. You cannot create your own Investment Types.
In order to get an asset allocation report in Money, each investment must be assigned to an Asset Class. The available Asset Classes are:
Again, this is a pretty good list, but if you have an investment that doesn't fit into one of these classes, you are out of luck. You can't create your own Asset Class, and every investment has to fit into a single Asset Class. Things like lifecycle funds obviously don't fit well in this scheme.
Assigning Asset Classes
Money assigns Asset Classes for everything except Stocks and Mutual Funds when the investment is created. For example, Money always assigns the "Bond" Asset Class to the "Bond" Investment Type. For stocks and mutual funds, however, there are several possible Asset Classes, so you or Money need to make a choice. Here's how it works.
Stock Asset Classes
For stocks that are listed and have a symbol, Money will automatically assign an Asset Class every time you do an online update of investment prices. You can go into the Investment Details screen and change the Asset Class, but Money will change it back at the next online update. If the stock is not listed, then online updates have no effect, and money will use whatever Asset Class you put in the Investment Details screen.
Mutual Fund Asset Classes
This is where things get weird. For mutual funds that have investments that fit into a single Asset Class, things work pretty much as you would expect. However, for mutual funds that have investments in multiple Asset Classes, things don't work at all.
Mutual Funds with a Single Asset Class
For mutual funds that are listed and you have entered a symbol, Money will automatically assign an Asset Class the first time you do an online update of investment prices. This Asset Class cannot be changed and the only way to see it is to run an asset allocation report and see where the investment shows up. Note that you cannot see this Asset Class in the investment details screen. (See below.) You can beat Money to the punch by assigning an Asset Class manually before doing an online update.
If the mutual fund is not listed or if you want to assign an Asset Class manually, then you can do so. Unlike stocks, you do not do this in the Investment Details screen. Instead, what you need to do is go to Investing | Asset Allocation and click thru the "Learn about Asset Allocation" to see the portfolio's asset allocation. The new investment will be highlighted as one without an Asset Class. If you click on it, you will be able to assign any of the allowed Asset Classes for mutual funds.
You can also use the manual process to assign an Asset Class to a listed mutual fund. To do this, you must do the manual assignment before you do an online update. Once you have assigned the Asset Class manually, it will not subsequently change when you "Update Prices Online". And, as noted above, you can't view it or change it manually either. This is different from stocks, where any manual changes will be overridden by the next Online Update.
Mutual Funds with More than One Asset Class
If you have any mutual funds that have investments in more that one Asset Class, the asset allocation features and reports will not be useful. Money will either assign a single Asset Class at the first online update or will force you to assign a single Asset Class manually. This is not immediately obvious, because the Investment Details screen for mutual funds appears to allow you to assign a mutual fund investment to a percentage over the following Asset Classes:
This would seem to be just what is needed for "blended" or "target date" ("lifecycle") mutual funds. Unfortunately, this doesn't work. You can enter the data but:
- Money doesn't use this information in the asset allocation screens or in any reports
- You can only view the data in the data entry screen
- When you update prices online, Money will change the values you entered to other values. Frequently, these other values will bear no relation to reality and will not even add up to 100%.
As noted above, Money 2007 fixed this problem. It does allow mutual funds to be split using the Investment Details screen and the asset allocation report works properly.
Answer provided by Bill Becker. Bill also graciously provided a document with some supplemental information.
umpmfaq.info: Asset Allocation
Q) How come Money whines about a symbol used on a deleted investment? Why are deleted investments not really?
A) Create a dividend in some investment account for the security in question. This will resurrect the "deleted" investment. Then you can go into its details and delete the symbol. Then you can delete the dividend transaction. Then you can go in and "delete" the investment again, if this is your wish. Nobody here knows exactly why Money remembers "deleted" investments.
Q) How come my bond fund investment is off by a factor of 100?
A) Bond funds are not bonds. They are mutual funds. Bonds in real life and in Money are priced as a percentage of total face (par) value, as they are in quotes from brokers. The price of a bond bought at a 10% discount from face value would be 90.0. Prices over 100 would be bonds bought at a premium. Mutual funds, like bond funds, are priced in Money by the price per share. (Thanks to Cal Learner -- MVP for an important rewrite to this question.) See also "I bought a $1,000 bond for $850--Money tells me it cost $85. What gives?" for the corollary question about the pricing of real bond investments.
Q) How do I download/import historical quotes?
A) Money won't download any quotes besides current. There is no easy way to import historic quotes, either.
Q) How do I fix bad investment names in the Buy Investment/CD pull-down?
A) The entries in the pull-downs come straight from the table of investments you have created in Money. Go to Portfolio|Work With Investments|Choose a specific investment and select investments to rename, etc, on their individual detail pages. Go to Portfolio|Work With Investments|Delete an investment to delete investments. You cannot delete any investments you have any transactions for, so you may also have to do some account register maintenance.
Cal Learner suggested another technique to delete an investment that avoids some problems others have experienced if a symbol ever needs to be reused. Go to the investment details page. Clear the field for symbol. If no transactions have been entered for this investment, there will be a delete choice listed under common tasks. Click it.
Q) How do I handle a mutual fund merger?
A) There are two methods that work. You can pick one depending on whether you previously held both of the funds involved in the merger or not.
The technique suggested by Cal Learner for the case where you didn't hold both funds previously:
- enter a split for the share ratio involved (you can use the NAVs at the exchange times 100)
- go into the Investment Details and change the name and symbol
- record the event in the investment comments.
If you previously held both funds, there is no solution without side effects. Kevin suggested what is probably the least bad solution:
- sell the retired fund for your exact cost basis
- buy the correct number of shares in the surviving fund for the total amount of the old cost basis. Let Money figure the share price.
The side effect of this is that it will create a one-time unrealized capital gain to match the entire gain you were carrying for the retired fund on the date you set for the transaction. This will likely cause inaccurate performance reporting and may propagate to things like long-term/short term capital gains reporting.
Q) How do I rename an Investment Cash Account?
A) Go to the Investment Account Settings (or Details in versions prior to M05). There's a text box there for Cash Portion Account Name. You can change it there directly (M05?, M06) or by clicking on the Rename… button (M05?, M04 and previous back to ???). It seems obvious that an Investment Cash Account should have an Account Settings (Details) Page of its own like all other accounts. It doesn't.
Q) How do I setup a 401(k) loan?
A) There's no magic method (i.e., no "401k loan wizard.") Here's how I do it:
1) In 401k investment account, sell investments as required by the plan mechanics to 401k cash account to make funds available.
2) In 401k cash account, "buy" a new "loan" money market investment in amount of loan amount.
3) Create a new "loan" account with amount and terms of 401k loan.
4) Schedule a periodic loan payment from 401k cash account to pay off the loan. This is like any other loan in Money.
5) Revise periodic scheduled paycheck deposit to add an after-tax split item to transfer the loan repayment payment amount to 401k cash account.
6) Revise periodic scheduled investment from 401k cash account to 401k investment account/investment options as required by the plan mechanics to reinvest the loan payment amount.
7) At each loan payment to the 401k cash account also enter an interest paid from the "loan" investment in the 401k investment account to the 401k cash account and a "sell" of "loan" from the loan investment in the 401k investment account to the 401k cash account. This is the worst thing since there is no way to automate it and you have to get the principal and interest appropriate to each period from either the "loan" account payment entries or a separate amortization table. (Mine's in Excel.)
The loan balance amortizes from the modified paycheck transfer via the 401k cash loan payment account. The holdings in the money market "loan" investment decline and earn interest via the manually entered interest and sell transactions. The funds get reinvested via the revised periodic investment transaction.
It's just a lot of work and a lot of transaction entries.
There are "lighter" schemes depending on how much detail you go into tracking your 401k investments. The scheme outlined above is the manic geek case for personal accounting anal-retentives. One light weight scheme is listed in the MSKB.
Thanks to Richard M. Bollar - MVP Microsoft Money for this method.
MSKB: 223174 401(k) loans the MSKB way
Q) How do I track savings bonds in Money? Tracking them as a CD doesn't seem to provide a way to track their value.
A) Money doesn't handle savings bonds particularly well. They suggest entering them as CDs and this seems like the least bad way to do so.
Many of us use the Savings Bond Wizard to know the current value of our bonds. You can transfer, by hand, interest information from the Savings Bond Wizard to Money but you will have to enter it as reinvested interest, which has other side effects including creating taxable investment income. This may be what you want--depending on your tax plans for the bond interest. If you elect to defer paying interest until maturity, you should set the tax deferred setting for the investment account holding the bond investment.
In order to keep track of individual bonds, you should create separate investments for each series/denomination/issue date of bond you hold. (E.g., "$100 EE 2002-03" could be an investment name.) Then enter the purchase price for the total number of like bonds you bought as a Buy Investment. (Say you buy 5 $100 bonds--investment name, say, "US $100 EE Bond - 2005-08"--at their $50 purchase price, you enter 250 as both quantity and value.) You might also consider storing the serial number(s) in the memo field of the buy transaction.
Thanks to Michael Gordon for an important correction to this answer.
Savings Bond Wizard
Q) How do you change a mutual fund investment to money market investment?
A) It is not trivial, but not as hard as it first appears. A few minutes should do it.
In the details, remove the existing symbol, and rename the existing "mutual fund" to something you will never use. Let's suppose you choose zzzz.
Create a new money fund with the correct name and symbol.
Go back to investment zzzz and choose View: Investment Details.
Change each transaction to the fund using the drop-down list. You may have a problem if you have sells intermingled with buys--it may try to sell more shares than you have at some point. If so, at some date before the first transaction, enter a LARGE buy--larger than your maximum share holdings of this investment at any point--with no source for the investment funds. This will assure that you always have enough shares to cover all sells. Don't move the large buy transaction. Just delete it when you are done.
In any case, keep going until there are no more zzzz transactions remaining except for the large buy to assure sufficient shares for any sell. Once all of the real transactions are changed to the new investment, you can delete the temporary buy and "delete" investment zzzz. Answer derived from one originally posted by Cal Learner--MVP.
Q) I bought a $1,000 bond for $850--Money tells me it cost $85. What gives?
A) Bonds are not priced by the amount of the bond. They are priced as a percentage of total face (par) value, as they are in quotes from brokers. The price of a bond bought at a 10% discount from face value would be 90.0. Prices over 100 would be bonds bought at a premium. A bond, of any value, bought for a price of 88.5 was "bought at a discount" and cost 88.5% of its face value. A bond bought at a price of 105 was "bought at a premium" and cost 105% of its face value.
There is a reference in the MSKB that describes this correctly except that the sentence that starts "If the current value of the bond exceeds the par value ..." is wrong. The example that follows that sentence is correct.
The Bond Market Association has a really good site explaining bond investing. Clicking glossary in the left hand column, then looking up "price" gives a good description of how this works as well.
Thanks for this answer go to Cal Learner -- MVP.
See also "How come my bond fund investment is off by a factor of 100?" for the corollary question about the pricing of bond mutual fund investments.
Bond Market Association's page on bond investing
MSKB: 121903 How bond investments are priced in Money
Q) I don't hold investments anymore but they still show on the investments page. Why?
A) To prevent an investment from appearing on the Money Home page, go to the "Details" page of the investment and use "Delete this Investment". Don't be alarmed; this only deletes the specified investment from the list of investments. Any transactions for the specified investment will remain in the closed account(s). Later, if you attempt to use this investment again, Money will simply ask if you wish to add the investment back to the list of investments.
Answer provided by Brent Neville.
Q) I hold the same investment in two accounts. But when I try to enter the same symbol again Money complains. Why?
A) You only define an Investment once. The symbol is an attribute of the Investment, not the Account holding of the Investment. When you want to Buy the same Investment for another Investment Account, choose the Investment from the drop-down list instead of trying to define the Investment again. An "Investment" is just a name and a symbol and some price history. The Investment Account keeps track of holdings of a given Investment. Answer derived from one by Doug Wilson.
Q) My 401(k) cash account is going negative. How do I enter employer contributions?
A) There are several ways to accomplish this. Which one you should choose depends on whether you want to track the cash in association with your paycheck or not. Probably the easiest way is to schedule a deposit to your 401(k) contributions/cash account in the Bills & Deposits section, the amount and date of which correspond to the match. Use an income category setup to be excluded from tax reports like "Gross Pay:Employer Matching," so these funds aren't factored in to tax reports and Tax Planner calculations.
The disadvantage to this method is that it decouples the match money from your paychecks, which, depending on your plan, may cause problems for things like matching money associated with overtime income.
The more elaborate way that gets the contributions tied to your paycheck--assuming that your plan matches on a pay period basis--but doesn't hose up the Tax Planner--is to enter an income entry on the After Taxes tab (use a negative number--trust me on this) against the "Gross Pay:Employer Matching" or similar, tax-neutral, category. Then do a Transfer of the same amount to the 401(k) contributions account on the next line of the split.
Thanks for Derrick Cole for contributions to this answer.
Please see this disclaimer if you are using Money 2005 or this comment if you are using Money 2006.
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Last update: 10 December 2006
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