QUICKEN

[Frixxxx]

A new thread for those who use Quicken for budgeting/financial planning. Please post questions or tips here.

[RealMoneyIssues]

Use Mint.com

Thats my tip ;)

[Steel_Magnolia]

I've been using Quicken for my financial accounts since 1992. I have back-ups of my backups, online and hard copy. That's the only down-side to having that much data in electronic format, that and the fact that you have to upgrade versions about every 3 to 4 years because they quit supporting old versions after a while. I love the auto downloads from my accounts, how easily the data is searchable, and it really saves me time on my tax prep. I used MS Money for a while but Quicken felt more intuitive to me. JMO.

I do use the budgeting tool and it helps me to keep on track and to project into the future as well. I haven't used the investing areas of the software and look forward to reading the comments of those who do.

[Frixxxx]

Use Mint.com

Thats my tip ;)

You do realize that mint.com is owned by Intuit?

[RealMoneyIssues]

You do realize that mint.com is owned by Intuit?

Yes, posted that very fact this morning in your MSMoney thread.

[Frixxxx]

Yes, posted that very fact this morning in your MSMoney thread.
Guess I should read then post!:embarrest:

[Boghie]

How about a nice tip on using Quicken to document and manage your salary contributions? Believe it or not, that was how I found TSPTalk back in the day. Long - more or less - before 'The Great Collapse of 2008'. That would be around 2007. Anyway, how can you quickly enter those pesky salary contributions into Quicken so you can view your expected returns and expected risk as well as your long term Internal Rate of Return. And, stuff...

This is actually fairly easy. The hard part is figuring out how many 'C Fund' shares your 46% contribution allocation toward the 'C Fund' your $384 is buying. You could get sick playing that game for each fund every two weeks down to four decimal places. You would have to be an IRS auditor to enjoy that bother.

But, it turns out to be very easy.

Open your TSP Investment Spreasheet in Quicken
Go to 'Recent Transactions' in your TSP account
Open up the most recent 'Contribution'
Copy the 'C Fund' (or whatever) Total into your buffer
Click the 'Enter Transactions' button in the Quicken Investment Spreadsheet form
Choose 'Buy - Shares Bought'
Enter the easy stuff - but type a 0 in 'Number of Shares' and the fund total to the 'Total Cost' field in Quicken
Quicken will prompt to to 'Recalculate Investment Information' - select 'Share Count'
And, you are done...

The nicest thing is that your per fund contributions will not change unless you change them - or get more mullah. Neither of which is a bad thing. Thus, you can copy the entire transaction from a previous on, change the date, zero out the share count, enter the new share price, and let Quicken calculate the number of shares purchased. Sounds like a lot, but it isn't...

Enjoy...

[Boghie]

What is the 'Internal Rate of Return', and how is it used???

How many of us have heard a Sunday morning 'financial adviser' hawking some variance of variable rate annuity investing recently? Under the name of 'Safe Money Radio'? Yup, I have. I get a chuckle, especially when he yaks up his example of the deceptiveness of using 'Annual Returns' as a basis for making investment decissions. Here is his argument:


Say you start with $100 and you grow that by 20% in the first year: Leaving you with $120
Then, you lose 40%, leaving you with $72
Then, you gain 40%, leaving you with $100 bucks.


Result: You made nothing, but the annual return is 6.66%

He does this about three times in a row to get his sales grinding going. Wow, his annuity scheme must be really safe and have stable growth!!! I want to buy into it!!!

I hate to say it, but Amoeba does this all the time as well. Not for sales grinding, but because he is inadvertently misusing statistics. For example, during the doldrums of 2009 Amoeba constantly stated that buy and holders gained zip, zero, nada through the decade. That is because he inadvertently cherry picked the start and end dates. They are not bad dates, and they are not deceptive dates, but they were unlucky dates. Here they were:

2000/01/01 - S&P500: 1,469
2009/01/01 (he would move this as the year moved onward) - S&P500: 903

You are broke. Broke, broke, broke...
You lost 38.5% of your assets.
Broke, broke, broke...

But, that didn't seem right for those of us that contributed through the thick and thin of all those time slices. Also, what is the value of arbitrarily picking 2000/01/01 as the starting point - it was near the height of the dot.Com bubble. But, let us get back to the IRR (Internal Rate of Return). Why doesn't it seem right that we lost almost 40% of our holdings during a lousy market time slice? Because we did not. Because we added money when the share prices are low. That is why the use of IRR is a better approximation of investment earnings than a simple average of annualized returns.

How do you get an IRR for your investment history? By using Quicken. The CAGR (or IRR) formula will hurt your head. My head already has chicken pox bumps all over it. I don't need my head to hurt more than it already does. But, if you want to see a generic formula check out this (http://www.moneychimp.com/features/market_cagr.htm). Anyway, one should avoid pain when one can so here is how you use Quicken to generate an IRR:

Open the 'Reports' top menu
Select 'Investing'
Select 'Investment Performance'

The resulting graph will include all investment accounts for a current annualized estimation. Kinda boring. In fact, not surprisingly if you did hurt your head at the above mentioned site, the result will be your annual return. Yowser, why bother. I could use my starting asset value, subtract it from my ending asset value, subtract that by my contributions and do the division myself. But, can you do that for a range of years. Your head will really hurt - even worse than the chicken pox.

Well, a pox to that. Just change your date range, change your subtotal (for example months or years), and maybe isolate your TSP account from all the other investment accounts you may have. Click, type, type, click and viola. Very simple. Some chunk of silicon's head is hurting, not yours.

But, beware, the IRR is generally less than the simple average.

For 2000/01/01 through 2010/12/31 our 'C Fund' (think of the 'C Fund' as a supercharged S&P500 because it overperforms the index as a result of dividend reinvestment) actually had:

Annual Return: 2.45%
Annual Risk: 19.63%
IRR/CAGR: 0.36%


Not good, but not negative.

As a personal comparison, I will show my numbers vs. that of the 'C Fund' from 2004 to last night (I started using Quicken in 2004):
'C Fund':

Annual Return: 6.79%
Annual Risk: 18.22%
IRR/CAGR: 6.96%


'My Amazing Returns':

Annual Return: 9.06%
Annual Risk: 11.56%
IRR/CAGR: 8.44%


There are others who are doing better, but they do not know it!!! Play with the numbers and find out!!!

[Boghie]

Ever since I had the pox my face itches. A bit more on some days, much less on most. Gives me a reason to drink good beers and enjoy life a bit.

Anyway, how does one measure risk in investing? The mathematical geniuses at Long Term Capital Management (http://en.wikipedia.org/wiki/Long-Term_Capital_Management) (and the like) basically use modified standard deviations. I think they called it a Sharpe Ratio. Then again, they went broke and had to be bailed out by other banks and the Fed. Does that mean that the concept is stupid. Nope. Just not understood well enough to make oversized bets on – and, that is the game of Quants (http://en.wikipedia.org/wiki/Quantitative_analyst)and Hedge Funds.

So, what is risk as measured by standard deviation (http://en.wikipedia.org/wiki/Standard_deviation)? Well a standard deviation is based on a normalized bell curve (hence the problem with using them slavishly like Long Term (a relative term in this case; yuk, yuk…) Capital Management (also rather relative; yuk, yuk…) and breaks up that curve into chunks. The normal standard deviation grabs the 68% of measured returns around the center point. Thus, 34% of the data points forward of the center point of the bell curve (yea!!!) and the 34% behind the center point (boo). Money management entities play on the margins and change that a bit – but it is not really worth the time to figure out. For example, Quicken’s risk is a half point off the that of MoneyChimp.

The intent of a standard deviation on a normalized bell curve is to emphasize statistically a normal range of returns. For the S&P500 we get:

Quicken (inflation adjusted by 3%, data from 1957 onward):

Average Return: 7% (Hence the common 10% without inflation adjustment)
Risk (StdDev): 17%

MoneyChimp (http://www.moneychimp.com/features/market_cagr.htm)(inflation adjusted from 1957 through 2012):

Average Return: 7.17%
Risk (StdDev): 17.24%

Since my face itches and my calculator is an arm’s length from my hand I will give you the magical return range for the S&P500 in any given year based on Quicken’s numbers. That is, one Standard Deviation:


S&P500 Expected Return Range: -10% through +24%
You have a 68% chance of making -10% through +24% with an average of 7% (inflation adjusted).

So how did ‘Long Term Capital Management’ end up being ‘Short Term Capital Destruction’? Well, the Quants were very confident in their math and slavishly bought a falling knife – just knowing that the percentages were in their favor. Their problem was that market returns have Fat Tails (http://en.wikipedia.org/wiki/Fat-tailed_distribution). They did not factor in the fact that the outliers in their model were more prevalent and longer lasting than the charts suggested. Hence, they were wiped out by a Black Swan (http://en.wikipedia.org/wiki/Black_swan_theory).

Were the Quants wrong. Nope, but to make Hedge Fund style returns they used leverage. What confidence they had!!! What wonderful returns you have!!! Is that a wolf or mamma bear? Anyway, was some measure of leverage really wrong. Kinda nope. All they had to do was ride out a short term crash and everything would have normalized. But, their heavy leverage took away options. Nobody rides out numbers like that. Thus, wipeout…

To prove that we are in a Fat Tail field, just note that 2000 was into the second standard deviation - we are talking about maybe 5% or 7% odds. And, yuk, 2008 was into the 3rd standard deviation - which supposedly never really happens. But, market tails are significantly fatter so they happen more often. We have had three major out of bound events in twenty five years (just 25 points on a chart of 55 data points with three of those complete blowouts - a bit higher than almost zero, eh:nuts:). Plus, market tails are the result of stuff Quants cannot quantify.

That is why I don't bet my TSP farm on anything. I don't want to be the 'Long Term Capital' of TSP investors:p.

[burrocrat]

i don't know, all that thinking sounds a little, uh, risky.

in times of toil and trouble i like to keep my stash in turbo timmy's tsp slush fund (G). he only borrows it during extreme events of legislative ineptitude, on average about once per year lately. and he always pays me every dollar back in currency worth 97% less than when he borrowed them, if you account for inflation. and if you believe the inflation numbers. that's a small price to pay for security and peace of mind.

i don't mind helping my uncle sam out when he's in a bit of a pinch. it's not like he's from cyprus and going to run off with it or something.

[RealMoneyIssues]

it's not like he's from cyprus and going to run off with it or something.

Are you sure?

[burrocrat]

Are you sure?

no. and please don't call me shirley. it's bad enough getting screwed but i ain't nobody's biatch.

[Boghie]

Yowser...

I forgot to provide the instructions to attain your allocations average risk and return. Blather, blather, blah, blah...

Anyway, all you have to do (in Quicken Premier 2012):

Start Quicken
Click the 'Investing' Tab
Click the 'Allocations' Button


In the 'Asset Allocation' pane you can view your 'Actual Allocation'. Your Actual Allocation displays your current allocation's expected annual risk and return.

and, in the second half of the 'Asset Allocation' pane you can use the 'Change Target' hyperlink to give the statistics on a proposed allocation. Upon entering the desired percentages, that Allocation displays the 'Target' allocation's expected annual risk and return.

There is a weakness to this stuff though. I do not think it actually takes into consideration how tied together asset categories are. For example, large and mid/small caps might move together. I don't know how to manage that. Would be nice.

[Stoplight]

Question, for you Quicken "Gurus" !

I'm running Quicken Deluxe, 2013 on a Windows 7 machine...

Is there a way to pull a report on the "investing" accounts to just show your commissions/fees paid ? I enter that data in the register, as part of my individual transactions, but I haven't found a way to summarize what I'm paying for these through my USAA brokerage account. I note some of the "misc fees" added on to the USAA $5.95 transaction fee, depending on what ETF I'm trading, or the size of the lot I'm buying or selling..

Thanks for any advice !

Stoplight...

[RealMoneyIssues]

Question, for you Quicken "Gurus" !

I'm running Quicken Deluxe, 2013 on a Windows 7 machine...

Is there a way to pull a report on the "investing" accounts to just show your commissions/fees paid ? I enter that data in the register, as part of my individual transactions, but I haven't found a way to summarize what I'm paying for these through my USAA brokerage account. I note some of the "misc fees" added on to the USAA $5.95 transaction fee, depending on what ETF I'm trading, or the size of the lot I'm buying or selling..

Thanks for any advice !

Stoplight...

I should be able to get the info in your USAA account under the activity tab, select the time frame, run the report, then there is an export to CSV link at the bottom.

Not sure if that is what you are looking for, but there is a column for fees in that CSV.

[Stoplight]

I should be able to get the info in your USAA account under the activity tab, select the time frame, run the report, then there is an export to CSV link at the bottom.

Not sure if that is what you are looking for, but there is a column for fees in that CSV.

Thanks for the idea, RMI ! Actually, your tip made me go back into Quicken, and rummage around. Since you enter that commission number in, I figure there's GOT to be a way to get it back out :)

I found an "Investment Report" (Investment Transactions) that has the info I was looking for...I was just curious to see how much I've paid this year in transaction fees, etc.

People (including USAA !) keep telling me they'll be GLAD to manage my money for me, for a paltry sum, of course :D I was curious to see how much I'm "saving" by going the D-I-Y route...


Stoplight...

[Birchtree]

And the guy that would be managing your money is only 26 years old. Think about that.

[PessOptimist]

Re-reading this for other reasons, I must comment that the 26 year old (gen y) probably would have his/her mother (gen x or boomer) watching over so it might be OK?

[PessOptimist]

A few months ago I started using quicken starter edition as my credit union finally started offering downloading account information in that format.

I got the starter edition for free and have been thinking of upgrading. The advertising hype says the deluxe edition "shows all financial accounts" while the premier edition "shows portfolio risk/return and helps you make buy/sell decisions" along with other things pertaining to mutual funds. In another place the claim is premier will manage investments, a claim not made for deluxe.

I am not really sure what I will want to do with this software pertaining to my TSP or future other investments. So don't ask. I am looking for input on which one to upgrade to, deluxe or premier?

Why bother at all? I like the geeky charts and stuff. I will probably be asking lot's of stupid questions on this thread about getting it all started.

PO

[Scout333]

I like the deluxe edition. You can sometimes find it for free with TurboTax tax computation software. Sams, Walmart, Best Buy, etc. If not check online this week. Unless you are handling rental properties, etc. probably don't need the Premier edition. JMHO

[burrocrat]

go for the most you can afford, with bundles and/or rebates of course. ask boghie for particulars, he is the wizard at that stuff.

also a generic tip for any purchase: find the number for customer service and call them, tell them the deal you are considering/advert you are looking at and ask if there are any incentives. they will usually offer you a sweetener to get you to buy. then tell them you are already a customer of an old version but you don't have that machine or documentation anymore but you would like to stay with their brand but you're not sure and would just like to quit if can't speak to a manager who can help you, thank you. your goal is to get transferred to the 'retention department' but don't ever say that or the line worker will catch on to what you are doing. the retention dept. holds the keys to their corporate world and have mass authority to overide any common transactions. the supervisor there can override any thing except the buying and selling of souls.

play dumb at first but don't cave in. if you hear lots of voices in the background then you know got a cubicle farm at first and don't buy anything they offer. they are recorded or fear being recorded and have to transfer you higher up if you refuse to get off the line. spray them with compliments and/or ask a question about where they are located and the weather. then lay it on thick. if you can tell by the voice they are a fat chick then double up they love compliments or anecdotal stories. this alone can wipe several $100 off your 'accidental' overcharge cell phone bill. remember two things: the person on the other end of the line must do everything in their power to resolve your issue or else transfer you up or else lose their job; and they're human so find something anything in common and compliment and thank them. it's an old trick. i used to be in sales.

also keep them on the line as long as possible, stall if you have to. they have to repeatedly churn many customers fast or else find a big solution for one customer. the clock is always running so make it nice for them and give them a justifiable time break from the salt mine grind. give them a reason to laugh. or at least smile, you can hear smiles over the phone you know.

happy holidays and good shopping.

[PessOptimist]

Thanks. Especially burro. This is an on line transaction. I was kinda hoping stoplight, boghie, frixxxx, rmi would comment.

Thank you scout for the comment. Do you use it for your TSP account?

The difference is about $16. I should stop being so cheap.

PO

[Frixxxx]

Thanks. Especially burro. This is an on line transaction. I was kinda hoping stoplight, boghie, frixxxx, rmi would comment.

Thank you scout for the comment. Do you use it for your TSP account?

The difference is about $16. I should stop being so cheap.

PO

I prefer the deluxe version. But I use it for forecasting as I find my wife needs "attitude adjustments" on spending.

Sorry for the delay in response, I am at my second job and unclass network has been sketchy at best.

Good Luck!

[Boghie]

PessOptimist,

Sorry about the delay. I have been trying to finish a final Geographic Information Systems (GIS) project using remote sensing images. Been a real pain in the @ss. My instructor is having us include two to five peer reviewed scholarly papers that we base our stuff on. Because we are using the free imagery from USGS all that scholarly stuff tells me is that my stuff (and probably everyone elses stuff) is not scholarly. Anyway...

The 'Premier' edition wins hands down. I own it and have not owned the Deluxe for quite some time. I think only the Premier edition incorporates the allocation, performance, and risk stuff I use often. One thing you have to know is that our 'Funds' are not funds - so you have to fake it in Quicken. There is no download of TSP data. And, because they when to a very pretty picture you can no longer copy it to a file. Oh well. I generally make entries on Friday for the non-pay Friday and make entries on pay Fridays using Thursday data saved to Thursday for my contributions - and then make entries on Fridays using Friday data for my loan repayment. Yup, contributions on Thursday, loan payments on Friday. Yuk and double yuk.

Based on the fact that you are obviously interested in investments I would strongly recommend the Premier edition...

[PessOptimist]

So I just create 401K/403b accounts named TSPX and choose manual entry right?

[Boghie]

So I just create 401K/403b accounts named TSPX and choose manual entry right?

Yup, to the very conflicted guy... Just beware not to use an actual symbol... That happened to me and I got penny stock returns, yowser :p

How about a Quicken tip. Have you ever wanted to see what kind of return you need (Average Annual Return - Not IRR/CAGR) to meet your retirement goals? Let us take a hypothetical GS11 sitting at $70K who wants to be collecting the same amount in retirement. Here are the assumptions:

Current Gross Salary: $70,000
Years of Service at retirement: 25 (He/She is quitting right now and living on the street for twenty years:nuts:)
Current Retirement Savings: $150,000
Age: 45

This chap wants to bring in $70,000 at age 65 from Social Security, Pension, and TSP. How can you use Quicken to figure out the annual return necessary to meet those goals?

Well, start by selecting ‘Planning | Calculators | Retirement Calculator’
It defaults to ‘Annual Retirement Income’. You can use that and play with the return. The key fields are:

Current Age: 45 (Default is 30. I’m always turning 30 so this is good, but not real accurate)
Retirement Age: 65 (Default)
Croaking Age: 85 (Maybe I should use Passing Age to be politically correct)
Current Savings: $150,000 (Work the numbers, much worse than expected if chap is not dumb like me)
Annual Yield: 8% (Default)
Annual Contribution: We will get this number
Inflation Rate: 3% (Defaults to 4%, but long term stats say 3%)
Other Retirement Income:

We will assume a pessimistic Social Security so: 75% of (1,300/month X 12) = $11,700
Again we will assume a pessimistic Pension so: 75% of 30% of Current Salary = $15,750
Total: $27,450. This goes into ‘Other Retirement Income’.


The results are rather awesome for our individual. Click on the ‘Annual Contribution’ radio button on the top and place $70K in ‘Annual Retirement Income After Taxes’ field (and make taxes 0% - because I just want Gross and who knows how high taxes will be with President Howard Dean… And, make certain to increase with inflation). All this chap has to invest is $5,600/year – or $215 per pay period to reach that goal at 8%. If this chap invests %4 of his salary to retirement he/she will make it at 8% (5% over inflation). That is, this chap is required to provide $190 toward retirement. To boot, that $190 will feel like $140 in a take home cut.

Playing with the annual return now gives you a means of changing risk and matching that to expected return and expected retirement income. For example, changing the ‘Annual Yield’ to 7% results in our chap being forced to contribute $10,000/year ($250 per pay period after match). That will feel like $190 per pay period in take home income.

So, a chap making $2,700 per pay period has to 'pay himself first' $250 and earn a whopping 7% a year (average) to bring home the same bacon as he/she did during his/her working life. And, that $250 will feel like $190 in after tax income to this chap.

As an aside, the 7% and 8% returns are BEFORE INFLATION – but the results incorporate the expected inflation. Now, one can use the Investing tab to set up an allocation. The resulting number in the ‘Allocation’ tab are AFTER INFLATION. Don’t ask me how I figured it out, it was a lot of research – trust me. Just add 3% to the expected return to match the Calculators expected return. Thus, a 7% expected return in the calculator requires an Allocation that returns 4% in the ‘Allocation’ Tab of the ‘Investment’ Tab. My rather conservative 25/0/32/17/26 allocation centers at an 8% average return. An example of an allocation returning 7% would be:


G: 45%
F: 0%
C: 25%
S: 10%
I: 20%

And, in a normal –non bond bubbly – market you do not even need 55% equities at age 45 to make the goal. The ‘F Fund’ doubles or triples ‘G Fund’ returns. I’m not using it because it is in a current market bubble. Dumb@ss market timing warning here - see my record in this years AutoTracker!!!

[Stoplight]

Thanks. Especially burro. This is an on line transaction. I was kinda hoping stoplight, boghie, frixxxx, rmi would comment.

Thank you scout for the comment. Do you use it for your TSP account?

The difference is about $16. I should stop being so cheap.

PO

Dang ! I'm REALLY late to this party :nuts: Sorry, PO...just saw this when it floated to the top of the forum posts again...

It's probably all a moot point, since you probably already purchased whatever version...but for the record :

I'm using Deluxe, and it does everything I want it to...I'm still learning certain things about it, too, that I didn't know it could do !!! I'm NOT a sophisticated investor, so I really haven't dug much in to the bells and whistles...I might "upgrade" to Premier when I do my next upgrade !

One mistake I made ? When I set up my TSP payroll deductions (years ago, in a previous version of Quicken...'99, I think !) I created my TSP tracking accounts using a "property and asset" label, rather than as an "investment" account. I created an "asset" account for each of the funds, and tracked my payroll allocations and IFTs by entering transactions. When I took out a loan for the house down payment, it was tracked merely as a reduction ("decrease") in my TSP account balances...paid back by deposit (an "increase"). Thus, I've never had any fancy reports or calcs to look at !!!

When I rolled the Wife and my accounts into our IRAs, I was smart enough to set those up as "investment" accounts, so I CAN use features in Deluxe for tracking investments.

Anyway...sorry, again, for the late comments...hope you have a Merry Christmas, and a fruitful New Year in 2014 !!!


Stoplight...

[PessOptimist]

No worries Stoplight. Thanks everyone for the tips. I have only gotten as far as creating some accounts with balances. That was a couple weeks ago. I haven't looked at it since. Everything in it's own time. Merry Christmas.