Fixed Rate Bonds

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Barry

13 May, 2009 01:47 PM

I'm struggling with the definitions of Investments verses Savings. I have a fixed rate bond for 2 years, should that be entered under a savings account, an investment account or an asset account?

  1. 1 Posted by John Selden on 13 May, 2009 04:12 PM

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    I have all my municipal bonds in an investment account, and it seems to work fine. Municipal bonds have a share price so I have them set up as a security. The investment account therefore fits best because I can put all the different bonds together into the appropriate brokerage account. I'm not sure that a savings account or asset account would let you hold different bonds under one account number.

  2. 2 Posted by Barry on 13 May, 2009 06:33 PM

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    Thanks John - However just one more question about the investment accounts, I have found them difficult to use. Say I want to set up an account to hold my shares - I set the account up and when I go into it asks if I want to set up a security, which I do, but how do I tell it I have x number of shares at y price? I can't see anywhere to put the number of shares in?

  3. 3 Posted by John Selden on 14 May, 2009 12:39 AM

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    What you're really asking is, how do you set up your initial account balances for an investment account. It's not trivial like it is for a checking or savings account, where the initial balance is just some cash number. For an investment account, you have to somehow tell Moneydance what your initial securities holdings are. There's not one right way to do this, so I'll walk through some options (I'm copying and pasting most of this response from my prior posts in the Get Satisfaction forum).

    After you create the investment account, you have to add securities to the account (i.e., add all the mutual funds, etc., that you hold in the account). To do that, select the account from the home screen, and then go to the Securities Detail view. Click on "Add Security" and add each of the funds in which you have holdings.

    Then you have to enter your holdings (i.e., the number of shares you hold in each fund). How you do that depends on whether the investment account is one for which you need/want to track capital gains or not.

    If the account is, for example, a tax-deferred account like a 401(k) where you don't have to worry about capital gains, or you just don't ever plan to track capital gains with Moneydance and instead rely on your broker to keep track of those for you, then starting the account it easy. You just enter buy transactions for all the shares of all the securities that you own in the account. The date on these dummy transactions doesn't matter (I used Dec. 31, 2008). Once everything is entered, your account will show a large negative cash balance. Enter that number in the "Edit Account" window as the starting account balance (without the negative sign, of course) and you should be all set.

    For accounts where you want Moneydance to track capital gains, there's not going to be an easy way to do it. One way or another, you're going to have to enter all the historical transactions individually with their proper date, share, and price information, and this could be very labor intensive. You should start by downloading all the available transactions from your financial institution. Depending on your financial institution, you might get a little or a whole lot of data that way. If you're coming from other software like Quicken, you can import the data following the instructions in the manual. If neither one of these options gets you all the historical data, I think you'll just have to enter it by hand. Note that this is NOT a problem with Moneydance: the same would be true for any similar software.

    Hope that helps.

  4. 4 Posted by Barry on 14 May, 2009 10:34 AM

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    Thanks for your help John - I'll give it a go without tracking for Capital Gains.

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