"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndi3a8r.nb6.mark[at]home.hornclan.com...
- quote -

You are absolutely right in all your questions. My methods are not up to
your standards of accuracy. I do not track depreciation item by item except
for big items because I am too lazy. And I don't worry about taking any
particular asset or the entire account down to zero. Depreciation to me is
good enough if my ballpark estimates keep the overall account value within
reason.

Here is the bottom line: you cannot carry household goods, cars, sporting
equip, etc at cost for long because the stuff cannot be sold for cost. So I
write down the value of my asset accounts about once a year to reflect
reasonable depreciation. For the big stuff I pretty much know what its
worth so figuring depreciation on an item by item basis is easy, I just mark
it down to current market value. We only have 2 cars and you can get used
car values off the internet in a few minutes. I know what my guns, cameras
etc are worth because thats my hobby and I keep on top of it.

The hardest account is Home Contents which has a mish-mash of stuff
purchased over many years, and new stuff keeps coming in. There is no way
this account is ever going to zero because of the new stuff plus even the
old stuff never really depreciates to zero. You can sell total junk to
people for fairly amazing amounts of money. So I write off about 10% of the
total account for a number of years until the balance looks about right,
then I will taper off or stop depreciating if the total value looks too low.
Another thing I do is to periodically write off stuff we throw away or sell
so those items are off the list moneywise but the purchase and sale\off to
the dump records are perserved. As I said before this is not rocket
science, I just try to be reasonable and make sure I do not overstate our
net worth.


- quote -

No, not unless you want to. Some big stuff can be tracked item by item but
that would be way too much work for general household furniture etc. I look
at most misc stuff as a group and use my best estimate of its useful life.
But I will stop depreciating when the group or item gets down to its
"yardsale" value. We raked in about $500 from a yardsale of complete junk
last spring. The entire pile of stuff was going to Goodwill until our
neighbor told us to piggyback on her yardsale. By the way my asset accounts
also help me with income tax deductions for donations to Goodwill as
charitable contributions.


If "yes" then asset accounts don't seem
- quote -

Asset accts are way better than the home inventory you showed me a few days
ago. Asset account data is filled out automatically by Money with all the
relevant info just by using a transfer when you record your purchase of the
asset. A perfect record with no extra work!


If "no" how do
- quote -

As noted above I rarely if ever depreciate stuff to zero because most stuff
retains "yardsale" value. Plus I don't worry about the minor
inconsistencies in my estimating methods because I keep the overall balance
of the account within reason.


- quote -

No. To obtain the accuracy level you are suggesting would be massive work
and your scheduled transactions would do the trick. But since nobody is
looking over my shoulder I do my depreciating the easy way and do not worry
too much about situations such as in your example. If we buy a bunch of new
furniture or appliances I will adjust my depreciation upward to account for
that but I can do it on a scrap of paper and type a revised number in Money
in 2 minutes. Tracking every item is just too much work.

Again for IRS purposes every item must be depreciated separately but I use
TurboTax for that.


- quote -

Right, almost nothing gets depreciated to zero and I don't worry about
miscellaneous low value items, I just look at the overall total of the
account and adjust depreciation accordingly. Again big stuff like cars is
easy because fair market value is easy to find. Misc household stuff is
harder so I use my best guess. Since there are no "depreciation police"
watching me I am happy with my estimates



- quote -

Yes, at least as long as that method produces a reasonable bottom line.
When the total account value starts to look too low or high I would adjust
the rate of depreciation or stop depreciating completely.



- quote -

You can remember what last years writeoff was because you enter it in Money.
So you will see the $1500 writeoff in the register If we buy a small
amount of new stuff I would probably ignore it, if we buy quite a lot of
stuff I would adjust the depreciation amount upwards by about 10% of the
cost of the new stuff after we had it for a year.


- quote -


I don't mean to say depreciation is not important but I value asset accounts
mostly because they give me a scrupulously accurate list of all our personal
property. Even if you never enter depreciation, that list is extremely
valuable and I use it frequently.

Regards

Bill Wood

On 2005-09-09, William R Wood <w.wood[at]cox.net> wrote:
- quote -

The problem with this is if I bought 10 things over the last
year that have wildly varying prices (between $50 and $500)
there are two ways to figure out the depreciation: calculate 90%
of the total (which takes almost no time at the end of the year but
never depreciates anything to $0) or keep track of the depreciation
value for each individual item so that I can figure out how much to
subtract at the end of the year (which depreciates things to zero,
but takes a ton of time to track each item).

- quote -

Ok. But doesn't this require that I track the depreciation amount
of each individual item? If "yes" then asset accounts don't seem
any better or different than the home inventory. If "no" how do
you do the depreciation such that a large number of items (> 100)
will eventually depreciate to $0?

- quote -

That wasn't what I was suggesting. I was suggesting that you
add a scheduled transaction for every single item that you buy.
E.g. I buy a washing machine, and I enter a depreciation transaction
for it. I expect that item to live for at least 10 years, so I set
the expiration for that transaction to Sept 9, 2015. The amount
is the cost divided by 10. Let's pretend that this depreciation
amount is $50.

Now, in 5 years, I need to buy a new drier. Again I expect it to
live 10 years and the depreciation amount is $50.

For the next 5 years, since I only have the washing machine, I
need to depreciate $50/year. For the 5 years after that (when I've
bought the drier) I need to depreciate $100 from that asset account.
For the 5 years after that (e.g. 10 years from now) I need to go back to
depreciating only $50 because I'll have fully depreciated the washing
machine back to $0.

So it strikes me that the easiest way to manage depreciation with
any amount of accuracy is to use scheduled transactions. Is there
a better way?

- quote -

This is the part that I don't understand. How do you do this so
that it only takes 3 mins. If you do it by subtracting a percentage
of the total account value, then you'll never depreciate anything
to $0. If you track each individual depreciation amount how can
you do all 8 accounts in only 3 mins?

- quote -

Ok. I *think* you're not depreciating anything to $0. Let's use
your household items asset account as an example. I assume you've
got several different items in it: sofa, chairs, beds, dressers,
kitchen & dining room tables, etc. Let's pretend that the total
value of the account is $15,000 and that you depreciate it over
10 years. Do you simply multiply the account total by 10% ($1500)
and subtract that?

If so, then you'll never depreciate anything to $0. Because next
year, the account total will be $13,500 and 10% of that won't
be $1500. It'll be $1350. Unless, of course, next year, you
remember that the correct amount to depreciate is really $1500.
If you do remember, how do you remember that? What happens if in
between then and now, you buy something new. How do you take the
new item into account when you depreciate it?

Thanks again for your assistance.

HI Mark,


"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndi142c.jsn.mark[at]home.hornclan.com...
- quote -


Well, I bet you will like it if you try asset accounts.


- quote -

You have it right. In the asset account I see a listing by date of the
vendor's name in the payee box, the price, the transfer-from account and the
memo description. Im looking at my Office Equipment asset account right now
and I can glance down the register and see every item I bought over the last
umpteen years in about 5 seconds. The memo box states what I bought and it
stands out very clearly. For example the memo entry I'm on now says
"Samsung 213T LCD Monitor - $100 rebate pending" So I know the date I
bought it, price paid, vendor, source of funds, item description all at a
glance without the bother of running a report.

No I dont have super structured memo format. I just write what comes to
mind starting with the Make, Model and basic description. I write enough
that I definitely know what it was I bought. On big ticket items I will be
more careful and include stuff like serial number if I need that for a loss
claim. Also these days you can register most purchases with the
manufacturer on their websites so you always have this sort of info
available in the event of a loss.

The Money register view is so useful that I rarely run a report to find
items, I just scan the list. When my wife asks a real hard question like
what did we pay for that Sears vacuum cleaner we bought about 10 years ago
or exactly when did we buy it, I will use the Find and Replace dialog to
search for transactions with Vacuum in the memo box.

- quote -

I went back at least 10 years and entered old data when I first started with
Quicken so I would have a better net worth picutre and data on which to base
a budget. As to assets I entered all the bigger (say over $50) items from
scanning our old checking accounts and credit card statements. I set up the
transfers by entering the transfer transaction into the actual bank account
used at the time of purchase. If I needed more info I looked in our paper
records and typed it in the bank acct register in Money. In fact I loved
entering these old items because it makes your net worth shoot up The
more stuff I entered the harder I looked for other stuff to list. Hell, I
went up in the attic looking for more things to log in.

Entering existing or new assets into asset accounts is not income or expense
and you do not need an income or expense category because every transaction
is a transfer from a checking or credit card or other account into the asset
account. Say the 1998 car you mentioned cost 15K and you bought it on Feb
3, 1999 with a check drawn on ABC bank. If ABC bank is not already being
tracked in Money create a new account for it and enter the car transaction.
Simply make an entry dated 2/3/1999, enter dealers name as payee, 15,000 for
the price, category is transfer to "Cars" asset account, and make, model,
year, etc in the memo. This will put the data in the checking acct and the
asset acct and you are done. Then scan the old ABC check register for more
asset purchases and enter them too. Do the same thing for any asset
purchases that you now have recorded in some expense category. Change the
transaction type to transfer and put the stuff in an asset account. You can
find these old transactions where you have assets categorized as expenses
very easily by scanning the register or using reports or Find and Replace.


- quote -

No, everything goes to zero if you want. But you don't have to depreciate
it to zero if you think it still has value.


(E.g. an item purchased 10 years ago for $100 should
- quote -


Ah ha, you are getting too technical on me If you buy something for $100
and you think it will last 10 years, write off $10 per year and it goes to
zero in 10 years. I didn't really mean 10% of the remaining value every
year but 1/10 of the original value per year - straight line depreciation.
And remember your original depreciation estimates are not written in stone
and you can change the depreciation as time goes by if you think the asset
or group of assets is really worth more or less than you currently carry it.
Also on special items you can be more careful how you figure depreciation.


- quote -

You could do this and it would work fine. The number of transactions
depends on how many asset accounts you setup and how picky you are about
depreciation. I only have 8 accounts so that would not be too bad because I
would use only one depreciation transaction per account. But I am too lazy
to setup scheduled transactions so I simply do my depreciation entries
manually sometime in Jan or Feb when I get the time. Only takes me 3
minutes to do all 8 accounts.


- quote -

Yes. That way your depreciation estimate really does bear a decent
relationship to reality even if you apply the same rate to everything in the
account which is exactly what I do. Again you do not have to be too careful
about depreciation because you can always go back and change your entries if
you find you took too much or too little. The main idea is that you cannot
carry a car or a boat or a couch at cost forever because nobody will pay
cost for most used stuff. So you write off some depreciation each year
depending on how long you think the stuff will last. A decent guess is
fine.


- quote -

No, you will definitely not lose any data or transfers and you will not need
to fix any transfers manually. My accounts have thousands of transfers and
I really did export my 20+ years of old Money data using QIF files and
re-import it back into Money and all of the transfers came out perfect. I
simply used the Export/Import routines right in Money 2002 and followed the
instructions on the various screens. Money keeps track of all transfers and
lets you assign the imported QIF files to the correct accounts and it then
processes the whole import job at one time so it can keep the transfers
intact. You will not have a single transaction to fix manually. Now dont
get me wrong the export/import routine takes some time and is a PITA for
sure but it was worth it to me just as routine file maintanance. Your new
file is clean as a whistle and will run fast as can be. I intend to do the
import thing every 5 years from now on. Just make sure you have backup
copies of your Money file in case something goes wrong.


- quote -

True, there is no rush.


Regards

Bill Wood

In microsoft.public.money, Mark Horn wrote:

- quote -

If you imported all of the QIFs at once (using Ctrl+<click> ), I
think they should have stayed as transfers.

First, I want to thank you for your willingness to share your
experience. It's been enlightening. I have a few more questions
if you don't mind. For what it's worth, you're doing an effective
job of convincing me to switch to this method of tracking my assets.

On 2005-09-08, William R Wood <w.wood[at]cox.net> wrote:
- quote -

Let's imagine I go to WallyWorld and buy a TV. I write a check
to them which shows up in my checking account. Pay to will be
"Wal-Mart". I've created an asset account called "Electronics"
so the category for this transaction in the checking account should
be "Transfer to : Electronics". In the memo field I put "TV" plus
some other useful information. In the Electronics asset account,
it will show up as an entry that says: From: Wal-Mart, with the
information as to what was purchased in the memo field.

How do you see what you have? When you go into those asset accounts,
you'll have a register full of vender names but not what you bought.
Have you customized a report to get the list of what you have?
Have you settled on a structured format for how you enter information
into the memo field (e.g. TV:Sanyo:HD32:111003)?

- quote -

How would you handle assets that you purchased prior to having a
transaction available in Money? For example, I bought a car in
1998 (before I started using Money). There's no transaction in
Money that I can convert to a transfer to the "Cars" asset account.
Would you just put that as an income into that account for that car?
E.g. enter it today at today's estimated depreciation value?

- quote -

Doesn't your method result in never depreciating the value of
anything to 0? (E.g. an item purchased 10 years ago for $100 should
be depreciated to $0 this year. But only removing 10% of the value
every year, results in that item still being valued at $34.87 after
10 years.)

I wonder if what you could do instead is that whenever you
purchase something a depreciable asset, also create a scheduled
yearly transaction which depreciates the value every year by
the correct amount (e.g. a $100 item depreciated over 10 years,
would have a scheduled transaction for $10 which expires 10 years
from now). That (of course) would result in a *LOT* of scheduled
transactions... Hmmm..

- quote -

By "like assets" do you mean that they have roughly the same
depreciation schedule?

- quote -

Sure it is! All of the transfers from/to accounts are no longer
transfers. They're two seperate transactions. An income in one
account and an expense in the other. You can go and fix that
manually if you want, but that's a massive PITA.

- quote -

It may very well end up being worth the effort when I lose the
ability to download transactions.

"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndi069f.iad.mark[at]home.hornclan.com...
- quote -

Yes I do hate the Money inventory tool now that I see it and would never
consider using it since it is too much work. If you keep a record of your
asset purchases in an appropriate set of asset accounts you have most of
this info conveniently and automatically. For example if I buy a camera I
record make, model, serial no in the memo box and purch date, vendor, price,
method of payment is automatically included. Most of the other info
suggested by the inventory tool is too burdensome and would never be
maintained. I keep a file on major asset purchases and that type of info is
there plus the internet gives us access to the manufacturer's website so
warranty, phone nos etc are easily available. The beauty of asset accounts
is that all of the critical info is collected automatically as you acquire
it and then you can see a complete list of your stuff instantly with item by
item cost and a total value for each class of stuff.

As to inventory images I would never consider trying to match and store
hundreds of images to individual items. That job would kill you. I suggest
that you video or take still images of everything in your house and store
them on CDs or DVDs. If you have an insurance claim you can take the time
to sort the images out and match them up with specific items. Why do that
horrendous job unless you really have to.

- quote -

Figuring depreciation is easy and you can do it almost without any effort.
I don't know what the hundreds of things you have are but here is how I
suggest doing it. Most stuff folks have is general furniture and
furnishings in your house. I put all that stuff in an account called Home
Contents. Don't even try to figure depreciation on an item by item basis -
that is way too much work. The depreciation you need to track is not for a
courtroom or the IRS, its your personal record just so you know where you
stand at least with a ballpark figure. I give furniture, appliances and
misc other stuff in the house a 10 year life. Simply enter 1/10 of the
total value of the account as depreciation each year. You may be way off on
some items but so what, at least you have most stuff reasonably valued. My
method is conservative - its always best to be conservative, meaning is
better to err on the side of lower values. A lot of our stuff is still
worth good money after 10 years even though I have depreciated it down to
zero. Our net worth is somewhat understated but that is good. You don't
want it overstated.

Now for special stuff like telescopes you need a separate asset account.
Telescopes have a very well defined resale market which you will be aware of
if you are in that type of hobby. I know my telescopes can be sold for at
least 80% of current retail price. So I simply enter depreciation of 20% of
the total value of the account one time. Takes all of 2 minutes total.
Virtually all sporting and hobby equipment can be handled the same way.
Most people know the current value of thier hobby equip automatically.

Do all assets accounts this way and your total time worrying about
depreciation is maybe 10 minutes the first year and 5 minutes per year
thereafter. The secret is to group like assets in separate accounts and
make one big depreciation entry for each account each year. Not perfect but
way better than nothing.

Now if you are running a business and take depreciation that goes on a tax
return you have to follow IRS rules. I am a stock trader so I do depreciate
computer equip etc needed to run that business. My computer stuff is in a
separate asset account called Office Equipment. That way I have a complete
list of all equipment that can be depreciated and Money gives me a neat
report that I use for my tax returns and I then figure exact depreciation
according to IRS rules for each item. That extra work sucks but Money makes
it way easier.


- quote -

I just went through this process a couple of months back and the only thing
I lost was downloaded stock quote history. No transaction data is lost by
export/import. My Money file was behaving weirdly after 10 years of hard
use. I have over 20 years of data from prior Quicken days, something like a
hundred accounts and thousands of regular and investment transactions and
complex budgets. The built-in file repair utilities did not work so I used
QIF exports and re-imported all of my data back into a new Money file. That
worked perfectly, got rid of all the gremlins and the file was much smaller
and faster. Loosing the old stock quotes does not bother me one bit. I
simply downloaded new quotes and all of my portfolio figures are correct and
up to date. I use BigCharts or Yahoo and other sites to monitor my
portfolio and see quote history because Money's built-in investment tools
are woefully inadequate compared to the tools available on the internet from
other sources.

Thus you can definitely migrate back. Simply export all of your accounts
and then import that data into a new Money 2002 file. This will take a few
hours if you have a lot of transaction data but it would sure be worth the
effort to me.

Regards

Bill Wood

On 2005-09-08, harrelsonesq <harrelsonesq2[at]yahoo.com> wrote:
- quote -

I have entered all of my stuff into that blank page. I did it a
few years ago. But I haven't updated their value, and at the time
I just guessed. So, to keep the value up to date requires nearly
as much effort as entering everything in the first place.

It'd be a much more useful tool if there was some ability to
automatically depreciate or appreaciate each item.

On 2005-09-07, William R Wood <w.wood[at]cox.net> wrote:
- quote -

Thanks for the explanation.

- quote -

....

- quote -

Here's an image of an empty home inventory entry:

http://photos1.blogger.com/blogger/6.../inventory.jpg

You probably would hate it. But it contains somethings that
you can put into a register transaction in an unstructured way,
and somethings which you just can't put into that transaction
(e.g. inventory images).

The big difficulty with it is assessing the depreciation on each of
these things. My home inventory is hundreds of entries. To assess
the depreciation of them on a yearly basis is so time consuming that
I just don't do it. Knowing how much to depreciate/appreciate each
of hundreds of things is one thing. Taking the time to actually
do it is another. I can't imagine how long it would take me to
(even semi-accurately) valuate all of my non-consumable property.

- quote -

I'm not willing to lose transactions, quotes, and other data entered
into the DB over the last 4 years. I've tried to migrate back by
doing QIF exports, but I lose too much information.

The "home inventory tool"? You mean that blank page that you could type
everything you own on if you ever got motivated? I have never gotten past
that stupid blank page. Couldn't they at least list the rooms in most homes
to get you started?

Susan

"William R Wood" <w.wood[at]cox.net> wrote in message
news:%23b9Cmu7sFHA.3316[at]TK2MSFTNGP12.phx.gbl...
- quote -

Mark,

Good questions. See below:


"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndhrva9.8rf.mark[at]home.hornclan.com...
- quote -

Tracking assets in asset accounts is super easy but not well explained by
Money help. Money 2002 does not have any of the silly hand holding
"features" of later versions that are probably the cause of your problem.
It appears that your Auto asset account is not setup properly because Money
is attempting to force you to do it the MSFT way. And Money developers
definitely do not know everything about how to handle or account for money.

When I buy a car I write a check to the car dealer. In Money the check is
recorded as a transfer from our checking acct to an asset account called
"Automobiles". Same for a camera, gun, furniture, telescope etc. except
that these purchases are always made with a credit card. For those I record
a transfer from the credit card account to the asset account. No part of
the purchase price is an expense.

When you create an asset account simply name it and open it with a zero
balance. Ignore any dumb questions the program asks like, "What was the
purchase price". When you buy the asset, record the purchase by
transferring money from your checking acct or a credit card acct to the
asset acct. Only the purchase price goes in the asset account. If you pay
extra items such as registration fees, taxes, etc along with the purchase
price, use a split transaction and record those expense items in the
appropriate expense category. At that point you have one transaction in you
Automobiles account and that acct stays that way until you decide to write
off some depreciation or maybe add a major accessory or sell the car. Say
the vehicle was a pickup truck purchased in mid 2003 for 20K. But in early
2004 you buy a camper top for the bed that cost $500. I would transfer the
cost of the camper top to the Automobiles account which would now have a
balance of 20,500. Then say you decide to depreciate the truck over 5 years
because that is how long you think it will last. Ok divide 20,000 by 5
which is $4000. So each year on the anniversary of the purchase date enter
a transaction in the asset account that reduces the balance by 4000. The
4000 is categorized as an expense called Depreciation. You can depreciate
the camper top along with the truck or use a different useful life for the
top. This way your net worth is reduced year to year as you write off
depreciation. If you pick realistic useful life figures your net worth will
be very accurate over time. And you can always go back and change the
depreciation amounts if you find that you wrote off too much or too little.
When you trade in or sell the car, you enter a transaction in the asset
account that zeros the vehicle out. Lets say you sell the 2003 pickup with
the camper top for 5K in mid 2007. OK the truck cost 20,500 and you sold it
for 5,000 so your total cost (depreciation) is 15,500. Lets say you wrote
off 4k per year depreciation each year you had the pickup which now totals
12K (2004, 2005 and 2006). So you now have $3,500 left to write off. The
final entry in Money is a split transaction in the Decrease column which
transfers the sale proceeds of $5K back to your checking and a final write
off of depreciation of 3,500. That zeros the account out: 20,500 cost,
less 12k annual dep writeoffs, less 3500 final dep, less the 5K sales
proceeds. You now have a record of all aspects of the transaction from
start to finish and your net worth was accurately tracked during the time
you owned the vehicle. Works perfectly.


- quote -

I am not an accountant, just a regular person who wants to know my financial
picture completely and accurately. Money follows proper accounting concepts
if you ignore MSFT's efforts to hold your hand. Record transactions exactly
as they happen in real life and your records will be accurate. But to have
accurate records you must respect the difference between assets and
expenses. Assets have lasting value, expenses are consumables that cannot
be listed on a net worth statement. Everything costs money and can be
treated as an expense but that approach is wrong. It understates your net
worth. When you buy something that has value, it is an asset not an expense
and it should be added to your net worth. For example a camera is an asset
(Photography Equipment) because it has lasting value, it is not a
photography expense. Film is a photography expense because film is a
consumable.

Programs like Quickbooks and Peachtree are useless for personal finance
because they focus on invoices, inventory control, employee payroll records
and the like. There is no provsion for personal expenses, assets, net worth
statements, budgets, investments etc. Before Money I used Quicken and
before that I used Excel and before that I used paper and pen


- quote -

I have not seen Money's home inventory tool but I bet I would hate it.
Sounds like more hand holding. I strongly recommend switching to asset
accounts and forget the home inventory. Home inventory is super important
but a real home inventory is an accurate record of purchase date, vendor,
item description and amount and photos. If you have a fire or other major
loss you are in bad shape without accurate purchase records and a
photographic record. Get a camera and videotape or comprehensively still
photograph every inch of every room in your house and protect the images. I
store my images on DVD in a fireproof safe and give copies to our children
for offsite storage. My Money file is backed up onto 7 different hard
drives on 3 computers and DVD and Flash Drive. The DVDs are in the safe and
offsite with our children. I am a lawyer and can tell you that without
proof of purchase and photos you will have a very difficult time with an
insurance claim. I regard my Money file as our most important asset.


- quote -


Only a few: House, Autos, Home Contents and various Hobby Equip accounts.
Depreciation is easy but don't forget apprecation. Our house is
appreciating like crazy so each year I collect info on comparable sales in
the neighborhood and add a figure for appreciation to our house. I buy good
toys so my hobby equipment does not depreciate much if at all. I am a
target shooter and have custom made guns that are probably worth more than I
paid for them. My telescopes depreciate very little and will always be
worth at least 80% of current market value for new. Over time they will
actually appreciate as market value of new stuff goes up. Cameras will
depreciate because the digital technology is advancing rapidly and even the
best equipment is obsolete in a couple of years. In other words you must
look at the particular item and see what the story is. With the internet
you can find the market value of anything. Just look at eBay or other sales
outlets. Generally I adjust value up or down every year or so on my hobby
equipment. An educated guess is fine. To me there is no work involved
since I follow camera, gun and telescope etc forums so I am always aware of
current prices for used and new equipment. I know what I would sell my
stuff for and that is the value I carry on my books. As noted above
Depreciation is an expense category; Appreciation is an income category.



- quote -

I recommend upgrading back to 2002! If you don't have it handy, you can buy
a copy from Amazon or eBay. I tested 2003,4,5 and 6 and they are all far
worse than 2002 which is near perfect and not self-crippling.

Regards

Bill Wood

On 2005-09-06, William R Wood <w.wood[at]cox.net> wrote:
- quote -

I do keep my car as an asset. But when I wrote a check from my
checking account, I did NOT transfer it to the car's asset account.
I had to categorize it as "car payment" (or something similar).
Then when I created the asset account it asked me what my purchase
price was.

The purchase transaction was not a transfer. It was an expense.
The addition of the purchase price to the car (which was exactly
equal to the car payment expense) fixed my net worth. In fact,
if I *tried* to convert the purchase transaction into a transfer
into the asset account, it would overstate the value in the car
because I already entered it into the purchase price.

Perhaps that's not the best way to handle it, but it appears that
Money does not want me to track my car payments as transfers.
Or perhaps I don't understand how best to track my cars in money...

- quote -

I'm frequently surprised when I find accountants wishing to
use something like Money. If you want that kind of tracking,
wouldn't you rather use something like quickbooks or peachtree or
some other package specifically designed for accounting, not for
personal finance?

- quote -

Interesting. Most of the stuff that I purchase doesn't go into an
asset account, but rather into money's home inventory tool.

- quote -

So how many asset accounts do you have? Do you depreciate things
in them regularly? How do you decide the schedule? How much work
is it to determine this depreciation? How do you categorize it?

- quote -

Ah. Ok.

- quote -

Frankly, I wish I'd never upgraded from M02. At some point,
I'm going to lose transaction downloads. With M03 and later,
the product became self-crippling.

Hi Mark,

Please don't buzz off, I am enjoying the conversation

Responses below:


"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndhr9l5.7pb.mark[at]home.hornclan.com...
- quote -

Yes you are absolutely correct - a car purchase is not an expense, it is a
capital transaction and should be treated as such in Money. That's what
asset accounts are for!

The problem is that most people are not accountants and they, in fact, treat
the purchase of a car as an expense, BUT they are wrong. The car is an
asset that should be tracked in an asset account, not charged off in an
expense account. You are understating your net worth when you "expense" a
car instead of treating it as an asset.

There are plenty of car expenses such as gasoline, insurance and maintanance
and those expenses should be in expense categories.

The car itself is carried in an asset account and depreciated periodically.
When you sell it you will take a loss which is the difference between the
purchase price and the trade in allowance or sale price. That loss is
called depreciation which can be written off at the time of sale or more
properly year to year with any remaining balance written off at the time of
sale. The annual depreciation I write off gives me a realistic look at the
true cost of ownership of any vehicle.

I do not mean that it is illegal or immoral to expense car purchases, its
just not good accounting practice because you loose track of your actual net
worth. I carry all asset purchases in asset account. If I buy a camera it
goes into my Photography Equipment asset account. Same for any material
purchase: furniture, tools, sporting equipment, guns, telescopes, etc etc.
Asset accounts are terrific. They give you a list of all your assets with
purchase prices and dates. I look at these accounts constantly. They are
also very handy for insurance purposes and tax purposes. But most
importantly tracking your actual net worth is very informative. I found
that when I started to do this 30 years ago it increased my incentive to
make our net worth bigger. I am happy to report that it works. Our bottom
line gets bigger every year which is a very satisfying feeling. Gives you
the discipline to control expenses and debt.



- quote -

Technically that is not so from an accounting viewpoint. And as noted above
you loose the very powerful tool of tracking your net worth by treating cars
and stocks as expenses. Plus Money does not track gains and losses on cars,
furniture, cameras etc if you treat them as expenses. You must track
general assets such as cars in an asset account to know what your gains and
losses are. Money tracks stocks in investment accounts which are special
asset accounts.


- quote -

I am not budgeting income from stock trades. We have different types of
investments that pay regular income - bonds, preferred stocks, dividend
paying common stocks and mutual funds. These fixed income investments are
held in brokerage accounts and pay us monthly, quarterly or semi-annual
income which we live on. This income is budgeted because it is reliable.
Money used for trading stocks where you hope to make capital gains by
selling at a profit is not budgeted since you can loose money as well as
make it.

Since our income comes from our brokerage accounts I must include them in
our budget. But if I buy, for example, 15,000 worth of MSFT stock in
January 2005 with trading money (intending to sell if the stock goes up
maybe 50 cents) Money adds 15,000 to our expenses in the budget reports.
This is obviously crazy since the 15k is not an expense, it is a short term
investment. Then if I sell the MSFT stock a week later for 14,500 (a 500
loss) Money says we have income of 14,500!! This is totally wacko since we,
in fact, lost money and have no income but rather a loss. The problem is
caused by Money including transfers between the cash part and investment
parts of investment accounts in budget reports. At this point in January
are budget reports are already destroyed by these stock purchase and sale
transactions which belong in investment reports not a budget for living
expenses. As few weeks later when we might have 40 investment transactions,
the budget reports are so messed up and confusing that they are useless.


- quote -

These Money issues are very hard to explain in writing. I wish there was a
convenient way of showing other folks screen shots of these transactions
using sample data.

I simply do not understand why MSFT changed the budget report logic in Money
2003 and thereafter. They lost me as an upgrade customer but that is the
least of their worries

Regards

Bill

On 2005-09-05, William R Wood <w.wood[at]cox.net> wrote:
- quote -

Couldn't you make the same claim that the purchase of a car is
not really an expense, but rather a transfer from cash to an asset
(the car)? When you sell that it will (almost certainly) result
in a loss, but isn't the concept the same?

It strikes me that both stocks and cars are expenses, not transfers.
The difference with stocks is that they have the potential to
result in a profit. You have to track the gains and losses, but
Money does that.

- quote -

If it's "impractical and even foolish" to budget from stock
trading, then why are you budgeting your income from stock trading?
(Personally, I don't care what you do; it's your money. I just
don't understand what you're saying.)

- quote -

I hope you don't misunderstand me. I'm glad that M02 works for you.
And I agree that you shouldn't change if it's working. I'm just
trying to understand how you *want* it to work and *why* you want it
to work that way. I'm curious. Feel free to tell me to "buzz off".

"Mark Horn" <mark[at]hornclan.com> wrote in message
news:slrndhou5d.4er.mark[at]home.hornclan.com...
- quote -

Definitely not. Explaination below.


Shouldn't the sale of
- quote -

No, transfers are never income or expense, they simply move money from one
place to another. The purchase of a stock is not an expense since you have
exchanged one asset, cash, for a different asset, stock, of the exact same
value. Selling a stock does necessarily result in income, I sell plenty of
stocks at a loss

The question of whether a stock trade ultimately results in a profit or loss
can only be known upon a sale. Thus calling the transfer of funds from the
cash to investment section of an investment account when a security is
purchased is completely incorrect. Moreover, profit and loss from
investment transactions are not proper budget items - they represent capital
transations that should be limited to investment reports. Budgets track
ordinary income and expenses. It is impractical and even foolish to attempt
to "budget" your income from risk type investing activities such as stock
trading because the results are too uncertain.

- quote -

If you uncheck "Include this account in the budget planner" all investment
account activities disappear from budget reports, but this is not a solution
for folks like me who earn most income from investments. If I exclude my
investment accounts from the budget planner most of my income disappears
from the budget!!! Since I live off this income and need to budget it, that
does not work.

Money 2002 handles budget reports correctly by automatically excluding
transfers between the cash part and investment part of investment accounts.
You can exclude individual transfers in later versions but you cannot
exclude them globally which proves my point that in many cases inclusion is
incorrect. But for a trader individually selecting transfers to exclude
them is a major hassle. MSFT refuses to provide a simple option to exclude
such transfers globally which they could do easily. That way users who like
the transfers to be included can have them and users who don't want them
included could exclude them and everybody would be happy. They won't fix
the problem so I will stay with Money 2002.


Regards

Bill Wood

On 2005-08-31, William R Wood <w.wood[at]cox.net> wrote:
- quote -

This strikes me as the correct behavior. Shouldn't the sale of
an investment result in income and the purchase of an investment
result in an expense?

I would think that if you want to avoid that, you simply mark
the cash portion of the investment acocunt as "out of budget".
Of course, if I do that, than any transfers into the investment
account from a budget account (e.g. my checking account) end up as
an expense in the budget. Also any transfers from the investment
account back into the checking account end up as income.

What am I missing?

Another alternative is Moneydance which runs on Windows, Linux, and MAC.

Dick Watson wrote:

- quote -

Let me add one other item to the development challenges: what to use for the
RDBMS and UI management? The obvious choices, because they are highly likely
to be in the target environment already, are Jet and IE. We can all see how
that choice plays out.

GnuCash. http://www.gnucash.org. Pure Linux. If it weren't fro the last, I'd
say it has a chance.

"Don Awalt" <donawalt[at]removethisgmail.com> wrote in message
news:OagsvUurFHA.3440[at]TK2MSFTNGP10.phx.gbl...
- quote -

Isn't there an open source project I have heard mentioned? Why not start
contributing to that effort? IMHO that probably has the best chance of being
successful if the community can get behind it.


"woppenhe" <woppenhe[at]ucla.edu> wrote in message
news:O4PChDrrFHA.308[at]TK2MSFTNGP10.phx.gbl...
- quote -

First you need a bunch of accountants who think they understand the tax
code. The rest is easy./

"jrana" <jranaudo[at]gmail.com> wrote in message
news:1125502668.488048.156190[at]f14g2000cwb.googlegroups.com...
- quote -