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My 401K account seems to give an inflated amount from what the web balance shows

It shows a cash balance and a securities balance, and adds them together. This doesn't seem right. The web balance matches the securities balance that Quicken shows, but it sure doesn't give that higher number that's nearly double.

Comments

  • volvogirl
    volvogirl SuperUser ✭✭✭✭
    Haven't you been using the cash balance (I assume from your paychecks) to buy the shares in your 401K ?
  • Canderson
    Canderson Member ✭✭
    Yes. (Which is why this "big" number made me question things.) But when I do the auto update in Quicken, I get this number where those two values are added together--the cash value, which matches what I think it should be, and then this securities balance. So it's the Quicken part I'm wondering about. Would I be better off just not including that account in auto-update?
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    edited September 2019
    Quicken is an accounting program that helps you "do your accounting."  It's not really a program that "does your accounting for you." 
    If you're relying entirely on downloads to "do your accounting for you" then you're at the mercy of how the Financial Institution (FI)  formats the information they are sending you, and they don't always get that right.
    Ordinarily I'd expect the pattern of activity in a 401(k) to be along the lines of:
    1. Money from a paycheck gets deposited in the 401(k) account
    2. Money in the 401(k) account is used to buy securities
    Those two activities would be represented in Quicken with:
    1. A transfer of money from the checking Account to the 401(k) Account
    2. A "Buy" or multiple "Buy" actions that reduce the cash in the Account and increase security holdings.
    So, what's the activity you're actually seeing in the Quicken Account?

    Given that Quicken is a program that "helps you do your accounting", I'd say "best practices" would be that you make entries in Quicken and those entries get confirmed by a subsequent download.  Now I know that when somebody is making trades on your behalf you can't manually make an entry prior to a download because you typically don't know the number of shares, the per share price and, sometimes, the security purchased.  In this situation you don't allow downloads to be automatically entered in your transaction list.  Instead, you review each entry and accept it into the transaction list only when you understand it and believe it to be correct.

    It sounds to me that the FI might be using "Add" actions to record in Quicken security purchases.  Add actions don't use cash.  So if the Account is recording transfers of cash in, and recording purchases of securities as "Adds", I'd expect your cash balance in Quicken to be wildly overstated.
  • Canderson
    Canderson Member ✭✭
    Got it. I understand that Quicken only "helps" me with accounting, and I have a pretty good idea of where the numbers are in this account. Which is why I was trying to understand why, at the end of the day, Quicken seemed to be adding the cash balance and the securities balance together for a market value. The Fidelity account is not reporting them together as a market value. Perhaps it's just my understanding of the financial terms that is lacking, but that market value seems very inflated. Thanks for your help.
  • Tom Young
    Tom Young SuperUser ✭✭✭✭✭
    Well, something's wrong here if Quicken and the FI aren't in agreement.  I don't think it's a misunderstanding.  Maybe you could post some screen shots of what the FI is showing and what Quicken is showing, suitably redacted?  In particular, what "actions" are being used when transactions are downloaded?
  • lorihand
    lorihand Member
    Were you ever able to figure this problem out? I am having the exact same problem with one of my accounts. Quicken is adding the actual cash value to the actual security value and then showing this inflated amount as the security value. So the market value (security + cash) is actually showing the cash value twice. Is it possible to fix this in quicken?
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    Are you referring to the "Cash Balance" at the bottom of the investing account's transaction list?

    That is not the total value of the account, it is the value of any uninvested cash in the account. When you purchase securities in the account, are they entered as "Bought" in the Action column or as "Added"? If Added, that would explain what you are seeing. 
    QWin Premier subscription
  • Francht
    Francht Member
    Hello. I am having the same issue between Fidelity and Quicken. Quicken is adding (all) the holdings as a total and labeling that as cash. It then adds all the holding plus the (incorrect) cash balance as the total account balance.
    i.e. (All Individual Holdings + Total of all holdings = Total Account balance)
    it should be (All Individual Holdings = Total Account Balance)

    This makes the Fidelity Download useless into Quicken. You can't even go in and delete the incorrect cash balance.
  • Jim_Harman
    Jim_Harman SuperUser ✭✭✭✭✭
    @Francht, If you look at the transactions where the securities got into the account, are they "Added" or "Bought"?

    Added transactions do not reduce the account's cash balance and might account for what you are seeing.
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