Pension Fund Transactions

[barnaby]

I cannot figure out how to record contributions to my pension fund in FM. I periodically manually update in FM the balance in my pension account. Can you give an example of such a transaction?

[Mark]

Hi barnaby,

Typically you record a contribution as a buy transaction. You would buy X number of shares at a price of Y, where X * Y is equal to the amount you contributed.

How are you tracking your pension fund? Does it have a quoted share price, or are you tracking it at a price of $1/share, like cash?

[barnaby]

I am tracking the account simply by the balance on a particular date - right click on the account, then update price and then record the price ie the account balance.

The problem I'm having is if I make a contribution and record it as a purchase (of 1 share?) then my account then has after that transaction 2 shares. On the other hand if I record it like a cash transaction with a price of 1 then how do I then update the 'price (ie the account balance?).

[Mark]

Hi barnaby,

It sounds like you are owning 1 share, and changing the price to update the balance. Instead, keep the price at $1, and own however many shares give you the correct value. This is like tracking a cash investment. So, if you have a balance of $1,000, own 1,000 shares, and keep the price fixed at $1. If the market value goes up $50, and you want to make your balance $1,050, record a reinvested distribution for 50 shares at a price of $1 still. Now, you will own 1,050 shares, and the price is still $1, so the balance is $1,050. If you contribute $100, record a buy of 100 shares at a price of $1.

[barnaby]

Thanks Mark for the reply.

I have decided to take a different approach in order to simplify the ongoing updating of the account balance.The trade-off in doing it the way that I've chosen is that I've changed the timing of the (few) contributions so that only a single contribution total is used rather than multiple contributions over time. I therefore have one share for which the price varies over time. Updating will simply involve right clicking to update the price from the night before.

Using the approach that you suggested would make the frequent updating of the account balance cumbersome and would require me for each update to calculate the increase/decrease from the previous balance.

Thanks for your help.