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Thread: QUICKEN

  1. #1

    Join Date
    Feb 2007
    Location
    San Diego, CA
    Posts
    6,937

    Default QUICKEN

    A new thread for those who use Quicken for budgeting/financial planning. Please post questions or tips here.
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund


  2.  
  3. #2

    Default Re: QUICKEN

    Use Mint.com

    Thats my tip
    Rules:
    - Trade what you see, not what you believe
    - Don't put stuff in your signature that a Mod doesn't like

    "Government exists to protect all people’s rights, not some people’s feelings." - A. Barton Hinkle

    Great Tools:
    http://www.CreditKarma.com
    http://www.Mint.com
    http://www.SaveUp.com/r/nmJ

  4.  
  5. #3

    Default Re: QUICKEN

    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.
    "That's the problem with being scared to fail. You usually end up failing in the end by default." Life From Scratch, Melissa Ford

  6.  
  7. #4

    Join Date
    Feb 2007
    Location
    San Diego, CA
    Posts
    6,937

    Default Re: QUICKEN

    Quote Originally Posted by RealMoneyIssues View Post
    Use Mint.com

    Thats my tip
    You do realize that mint.com is owned by Intuit?
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

  8.  
  9. #5

    Default Re: QUICKEN

    Quote Originally Posted by Frixxxx View Post
    You do realize that mint.com is owned by Intuit?
    Yes, posted that very fact this morning in your MSMoney thread.
    Rules:
    - Trade what you see, not what you believe
    - Don't put stuff in your signature that a Mod doesn't like

    "Government exists to protect all people’s rights, not some people’s feelings." - A. Barton Hinkle

    Great Tools:
    http://www.CreditKarma.com
    http://www.Mint.com
    http://www.SaveUp.com/r/nmJ

  10.  
  11. #6

    Join Date
    Feb 2007
    Location
    San Diego, CA
    Posts
    6,937

    Default Re: QUICKEN

    Quote Originally Posted by RealMoneyIssues View Post
    Yes, posted that very fact this morning in your MSMoney thread.
    Guess I should read then post!
    THIS IS WHERE I WOULD PUT SOMETHING TO REPRESENT MY THINKING, BUT THEN THEY SHOW UP!
    Tracker =
    100%- I Fund

  12.  
  13. #7

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,022

    Lightbulb Tip...

    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.
    1. Open your TSP Investment Spreasheet in Quicken
    2. Go to 'Recent Transactions' in your TSP account
    3. Open up the most recent 'Contribution'
    4. Copy the 'C Fund' (or whatever) Total into your buffer
    5. Click the 'Enter Transactions' button in the Quicken Investment Spreadsheet form
    6. Choose 'Buy - Shares Bought'
    7. Enter the easy stuff - but type a 0 in 'Number of Shares' and the fund total to the 'Total Cost' field in Quicken
    8. Quicken will prompt to to 'Recalculate Investment Information' - select 'Share Count'
    9. 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...
    Lookin' up at the 'G Fund'!!!

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  15. #8

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,022

    Lightbulb Tip: Internal Rate of Return...

    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:

    1. Say you start with $100 and you grow that by 20% in the first year: Leaving you with $120
    2. Then, you lose 40%, leaving you with $72
    3. 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. Anyway, one should avoid pain when one can so here is how you use Quicken to generate an IRR:
    1. Open the 'Reports' top menu
    2. Select 'Investing'
    3. 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!!!
    Lookin' up at the 'G Fund'!!!

  16.  
  17. #9

    Join Date
    Mar 2006
    Location
    Raleigh, NC
    Posts
    3,022

    Lightbulb The Risk Thangy

    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 (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 and Hedge Funds.

    So, what is risk as measured by 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 (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. 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.

    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). 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.
    Lookin' up at the 'G Fund'!!!


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  19. #10

    Default Re: QUICKEN

    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.
    100g

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  21. #11

    Default Re: QUICKEN

    Quote Originally Posted by burrocrat View Post
    it's not like he's from cyprus and going to run off with it or something.
    Are you sure?
    Rules:
    - Trade what you see, not what you believe
    - Don't put stuff in your signature that a Mod doesn't like

    "Government exists to protect all people’s rights, not some people’s feelings." - A. Barton Hinkle

    Great Tools:
    http://www.CreditKarma.com
    http://www.Mint.com
    http://www.SaveUp.com/r/nmJ

  22.  
  23. #12

    Default Re: QUICKEN

    Quote Originally Posted by RealMoneyIssues View Post
    Are you sure?
    no. and please don't call me shirley. it's bad enough getting screwed but i ain't nobody's biatch.
    100g

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