Do you record a LAL account (Liquidity Access Line) under Investing or Property and Debt?
I have a portfolio that includes 3 brokerage accounts. Two of the accounts hold investments (stocks and bonds) while the third account is a liquidity access line of credit that carries a balance due. Does the LAL account get recorded under "investing" or should it report under another category such as "property and debt"?
Best Answers
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I'd say a liability like a line of credit would be most properly reported as a Liability Account since it does represent money you owe.
If the borrowings are used entirely to fund trades there would be a rationale for including it in the Investing area, though I'd think most "margin" loans would be contained within the brokerage Investment Accounts themselves as opposed to a separate account for what you're calling a "line of credit."
Either way of presentation - "Investment" vs. "Liability" - would leave your Net Worth entirely unchanged so the choice here really does depend on how and where you want to see that loan amount.
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I agree with Tom that your use of the account should lead you to how you record and maintain the account in Quicken.
Since Tom brought up the line-of-credit aspect, I’ll suggest another possibility - that would be as a credit card account, which is the common recommendation for HELOC accounts. Again, all depends on your usage and preferences.
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Answers
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I'd say a liability like a line of credit would be most properly reported as a Liability Account since it does represent money you owe.
If the borrowings are used entirely to fund trades there would be a rationale for including it in the Investing area, though I'd think most "margin" loans would be contained within the brokerage Investment Accounts themselves as opposed to a separate account for what you're calling a "line of credit."
Either way of presentation - "Investment" vs. "Liability" - would leave your Net Worth entirely unchanged so the choice here really does depend on how and where you want to see that loan amount.
0 -
I agree with Tom that your use of the account should lead you to how you record and maintain the account in Quicken.
Since Tom brought up the line-of-credit aspect, I’ll suggest another possibility - that would be as a credit card account, which is the common recommendation for HELOC accounts. Again, all depends on your usage and preferences.
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