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Investment "Bought" shows as expense

gs57143

I've successfully transferred funds into an investment account "Betterment" and this is correctly accounted for. When I manually enter a transaction in my investment account, this is showing as an expense when viewing reports.

I've also tried to use "Boughtx" to use transferred funds into my "Betterment" account, but then the transaction increases my cash balance which doesn't make any sense.

How do I prevent investment purchases from recording as an expense when there is a cash balance in the investment account? Also, how can I use transferred funds into my "Betterment" account to make an investment, without that transaction increasing my cash balance?

Thanks

Using Quicken Deluxe for windows, R 23.14.

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gs57143

See image for an example of how in my "betterment" account, using "Boughtx" for a investment purchase/transaction increases cash balance - how is this possible? I've specified the transfer account to be "betterment" so funds in the "betterment" account should be used for the investment.

image.png

Jim_Harman

When you use the cash balance in an investing account to purchase secuirites, you should enter a Buy transaction with "From this account's cash balance" as the cash source. To avoid confusion, click on the Enter Transactions button at the top of the account's transcation list (register) to make this selection.

I'm not sure what reports you are referring to, but of course when you buy securities using your cash balance, it will reduce the cash balance in your account

q_lurker

gs57143 said:

I've successfully transferred funds into an investment account "Betterment" and this is correctly accounted for. When I manually enter a transaction in my investment account, this is showing as an expense when viewing reports.

What report is showing as an expense? Why do you think buying something should not be an expense?

gs57143 said:

I've also tried to use "Boughtx" to use transferred funds into my "Betterment" account, but then the transaction increases my cash balance which doesn't make any sense.

How do I prevent investment purchases from recording as an expense when there is a cash balance in the investment account? Also, how can I use transferred funds into my "Betterment" account to make an investment, without that transaction increasing my cash balance?

Thanks

Using Quicken Deluxe for windows, R 23.14.

If the cash has already been transferred into the Betterment account, you should use a straight "Bought" (not BoughtX) transaction to purchase the shares. That will reduce the cash in the Betterment account properly. It will also properly show as an expense on applicable reports, but I suspect you are still misinterpreting something in that regard.

The BoughtX transaction should normally refer to a separate account - an account different than the one in which you are entering the transaction. In that case, that other accounts cash balance will be reduced by the BoughtX in the Betterment account. I do not think that is what you desire.

A BoughtX transaction that refers to the same account - same as the one into which you are recording the transaction - is a special case. Note that in your example, the cash balance before and after the BoughtX transaction is unchanged, it stayed at $212.72. Essentially the cash for that transaction appeared out of thin air. It did not come from any account. That type of transaction is commonly used for opening balance transactions in a Quicken account. Thus the special nature of that case.

gs57143

If I go to the "In/Out/What's Left" report/view, it shows my recent "investments" as expenses - see the first image. Maybe it's just me but it seems that an investment would be and "investment" and not classified as a normal "expense". But again, maybe it's just me.

image.png

gs57143

thanks for the explanation Lurker. I'm confused as to why the fund purchases/investments that are in the "In/Out/What's Left" report show up as uncategorized - any idea how I can fix this? The image in my previous post shows a $600 amount that's uncategorized, and this is a summation of the investments made in my "betterment" account.

Jim_Harman

If you go to the Account Details for the Betterrment account, is the "Show cash in a checking account" option selected? If it is, then Quicken will lump the cash together with you spending accounts and it will be included in the In/Out/What's left on the Home page.

If you are thinking of the money in this account as investments, it is best to not use this option.

gs57143

Jim - the "show cash in a checking account" is not checked. If I look at some of the comparison reports I don't see these investment transactions showing up as outflows, so this must just be a quirk related to the "In/Out/What's left" report.

q_lurker

@gs57143: I was probably too quick with my comment about buying something (a security) being an expense. In the personal financial picture, the other viewpoint on that would be you are moving an asset from one pocket to another.

Your citation about the In/Out/Whats Left; that is not a report or presentation format that I use, so I can't really comment about that aspect. But I will point out that for investment accounts and there transactions, "Uncategorized" does appear in a variety of reports for a variety of transactions. You can pull up a report on "Investment Transactions" and get to the same place. So it is not just a quirk of that In/Out/What's Left report.

In the broad sense, I think Quicken's report generator is seeing an (investment) transaction, not seeing a category assigned to it (because there is no such field available for that transaction type), and thus the report generation routine drops it into the "Uncategorized" grouping rather than ignoring the transaction completely.

I have seen that occur in enough reports over the years that my mind tends to ignore or not worry "Uncategorized" with respect to investment situations. I will at times and in select contexts examine such identified uncategorized transactions to see if there are real cases where I should have assigned a category and did not.

There is also no way to work around that presentation as far as I know.

HTH

gs57143

Thanks for the additional explanation Lurker