Another Cash Account question

[Dave]

I have a schwab investment account setup. It has, on the cash ledger
$6000. In the same account, I own a MM Mutual fund with 34,000 shares
at $1 each. I sold the MM Fund, and bought $40,000 worth of a bond
fund. My investment ledger shows a sale of 34,000 shares of the MM
Mutual fund. It automatically "used" the cash balance to purchase the
bond fund. How do I show the "sale" of the cash in the cash portion?
My main problem is that the sale of the MM fund shows as investment
income. It is offset my a buy of $40,000 worth of the Bond fund. So my
income and expense report is showing a negetive $6000. I figure if I
show a sale of the $6000 cash, the income and expense report would show
income of $40,000, and an expense of $40,000. How do I handle this
problem? Is there any way to exclude transfers within an account?
Thanks

[j***@hotmail.com]

Post by Dave
I have a schwab investment account setup. It has, on the cash ledger
$6000. In the same account, I own a MM Mutual fund with 34,000 shares
at $1 each. I sold the MM Fund, and bought $40,000 worth of a bond
fund.

Is the bond fund held within your schwab account?

Post by Dave
How do I show the "sale" of the cash in the cash portion?

You didn't "sell" the cash so there is no sale.

Post by Dave
My main problem is that the sale of the MM fund shows as investment
income. It is offset my a buy of $40,000 worth of the Bond fund. So my
income and expense report is showing a negetive $6000.

That's because you spent $6000 on 15% of a fund purchase.

Regards,
JB

[Dick Watson]

I'm confused.

Where'd the $6k come from? If you account for how that got in the cash
account in the first place, then you'll get your $40k in/$40k out. Money
doesn't consider the cash used to make an investment as a cash "sale". If
you initially setup the cash account with a $6k balance, well, then, there's
your $6k in.

Post by Dave
I have a schwab investment account setup. It has, on the cash ledger
$6000. In the same account, I own a MM Mutual fund with 34,000 shares
at $1 each. I sold the MM Fund, and bought $40,000 worth of a bond
fund. My investment ledger shows a sale of 34,000 shares of the MM
Mutual fund. It automatically "used" the cash balance to purchase the
bond fund. How do I show the "sale" of the cash in the cash portion?
My main problem is that the sale of the MM fund shows as investment
income. It is offset my a buy of $40,000 worth of the Bond fund. So my
income and expense report is showing a negetive $6000. I figure if I
show a sale of the $6000 cash, the income and expense report would show
income of $40,000, and an expense of $40,000. How do I handle this
problem? Is there any way to exclude transfers within an account?
Thanks

[Dave]

John, the bond fund is held in the schwab account. Dick, The 6K was 2
years contribution to the IRA. My problem is that my income and expense
report is showing under the transfer column a ($6,000), which is the
difference between the "investment income" of $34,000 from the sale of
the money market fund, and purchase of bond fund of $40,000. I dont
see how sale of a money market fund is investment income, either.

[Dick Watson]

I'm kinda guessing here, but I'm wondering if the Income and Expense report
is including the cash account and not including the investment account? From
this perspective, the $34k is "income" (it wasn't in those accounts before,
it is now) and the $6k is "expense" (it was in those accounts before and
isn't now).

I'd mess with the customization of the report--particularly included
accounts.

Post by Dave
John, the bond fund is held in the schwab account. Dick, The 6K was 2
years contribution to the IRA. My problem is that my income and expense
report is showing under the transfer column a ($6,000), which is the
difference between the "investment income" of $34,000 from the sale of
the money market fund, and purchase of bond fund of $40,000. I dont
see how sale of a money market fund is investment income, either.

[Dave]

dick, the customization of reports doesnt seem to effect cash
transfers. Either you include all transfers, or exclude all transfers.
It seems if you use cash in the cash account to buy a mutual fund, it
shows up as an expense under the transfer section. Since there is no
selling of the cash, there is no income to offset the mutual fund buy.
Am I making sense? Thanks for your patience

[Dick Watson]

You are making sense.

But I'm not sure why you think what you are seeing is wrong. If I have ten
envelopes of money on the table and I take money out of one of these and put
it in an envelope under the table, have I not transferred money out of the
envelopes on the table? Do they less money than when they started? Relative
to the envelopes on the table, you are poorer. Cash has flowed out. That's
all Money is trying to tell you--indeed that seems like all it could tell
you. You can't sell cash. You haven't offset the cash flow out of the
envelopes on the table. There's less now than there was before. What's the
offset?

Post by Dave
dick, the customization of reports doesnt seem to effect cash
transfers. Either you include all transfers, or exclude all transfers.
It seems if you use cash in the cash account to buy a mutual fund, it
shows up as an expense under the transfer section. Since there is no
selling of the cash, there is no income to offset the mutual fund buy.
Am I making sense? Thanks for your patience

[Dave]

Dick, I guess what is bothering me, or more accurately, what I need to
understand, is the fact that I started with $40,000 in a combination of
"envelops" and ended up with the same $40,000, but my monthly income
and expense report shows a ($6,000). I would have thought since I
started and ended up with the same amount of money, the bottom line on
the report would show $0. Maybe you should recommend to me a good
book on personall finances! Thanks for your patience.

[Dick Watson]

Let's unwind this again, shall we? Where'd the $6,000 come from? Is that
accounted for as income or expense in the period of the report? The report
is telling you where it goes but isn't telling you where it came from. In
terms of cash position for accounts in the report, the report shows you are
down by $6,000 over the period. From everything you've told me, I still
can't see why this is not true. If you want to look at net worth, look at
reports that include the investment accounts. Those should show the $0
change you are looking for. Another way to make the income/expense report
more meaningful, maybe, is to eliminate the transfers in/out of the accounts
from the report. No matter how you slice it, the investment movement of cash
really isn't income or expense. But Money is viewing the set of accounts in
the report as a closed system and, when the option is set to show it this
way, is showing the transfer activity as income or expense.

BTW, you didn't end up with the $40k in the series of envelopes the report
is looking at since the Income and Expense report ignores (shows as Transfer
In or Out) the money that goes to/from the investment account. The report
reflect the transfer out. It knows, apparently, nothing of how/when the $6k
got there in the first place. If the $6k was in the account you transferred
it out of at the beginning of the reporting period, that part isn't income
or expense. That takes me back to the second question posed in my reply
here.

I don't know of a book or anything that would help with this--at some level,
this is just how Money works. One of the challenges with Money reports is
learning to interpret the data--it's not presenting wrong data, but it may
be presenting the information in ways you don't initially find intuitive.

Post by Dave
Dick, I guess what is bothering me, or more accurately, what I need to
understand, is the fact that I started with $40,000 in a combination of
"envelops" and ended up with the same $40,000, but my monthly income
and expense report shows a ($6,000). I would have thought since I
started and ended up with the same amount of money, the bottom line on
the report would show $0. Maybe you should recommend to me a good
book on personall finances! Thanks for your patience.

[- Bobb -]

Post by Dave
I have a schwab investment account setup. It has, on the cash ledger
$6000. In the same account, I own a MM Mutual fund with 34,000 shares
at $1 each. I sold the MM Fund, and bought $40,000 worth of a bond
fund. My investment ledger shows a sale of 34,000 shares of the MM
Mutual fund. It automatically "used" the cash balance to purchase the
bond fund. How do I show the "sale" of the cash in the cash portion?

========

Post by Dave
My main problem is that " the sale of the MM fund shows as investment income."

========
WHAT shows as income ?
This IS a Money Market Fund in Money , right ?
You bought it for $1 and sold it for $1 - where's the income ?
I can see this thread has gone a while...
How about you : sell the MM fund first - to cash - and buy the 40k bond fund with 40k in cash ?

[Dick Watson]

The Income and Expense report can be set to reflect transfers in/out of the
"closed system" of reported accounts. IIRC, investment accounts (not
investment cash accounts) cannot be included in this report. Given this, the
right settings and one two account transaction, sell $1,000,000 of MMF in
investment account with proceeds to investment cash account, would show up
as an Income Transfer In of the $1,000,000. Given what the report is set to
do, it's not wrong. But you can control the settings.

Like virtually any data reported any way from Money, you have to be willing
to understand what it's reporting. Don't just assume what the report is
calling Income is what you're thinking of when you think of Income.

Post by - Bobb -
========

Post by Dave
My main problem is that " the sale of the MM fund shows as investment

income."

Post by - Bobb -
========
WHAT shows as income ?
This IS a Money Market Fund in Money , right ?
You bought it for $1 and sold it for $1 - where's the income ?
I can see this thread has gone a while...
How about you : sell the MM fund first - to cash - and buy the 40k bond

fund with 40k in cash ?

[Dave]

Thank you Dick, you've been a big help to me. As you said, the key is
to spend the time to analyse what the report is showing, and to see how
the different settings effect the report.

[Dick Watson]

Glad to help. Thanks for the feedback. It's nice to occasionally have a post
in the NG that's not about downloaded transaction data issues. (Or install
problems or corrupted files.)

Post by Dave
Thank you Dick, you've been a big help to me. As you said, the key is
to spend the time to analyse what the report is showing, and to see how
the different settings effect the report.