Re: Money Market & Cash handling...

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In Reply to: Money Market & Cash handling... posted by Martin Taillefer on August 15, 1999 at 07:45:24:

: Hi there,

: I'm having trouble figuring out how to properly reflect my Schwab account's transactions in Fund Manager with respect to cash and money market shares. Hopefully someone can shed some light on this for me.

: Some facts as I understand them:

: - When I transfer cash from my bank account into my Schwab account it shows up as "cash", until the weekly account sweep that takes all "cash" and turns it into "money market" shares.

: - When funds are listed as "cash", they earn no interest/dividends.

: - If I buy stock on day X, my account shows a transaction date of X and a settling date of X+3. If my account does not have enough "cash" to buy the stock, some money market shares are redemmed automatically on day X+3.

: - If I sell stock on day X, my account shows a transaction date of X and a settling date of X+3. The proceeds of the sale show up as "cash" in my account on day X+3. This cash is swept into the money market at the next weekly sweep date.

: Now my questions about cash & money market handling:

: - Should I create two investments in Fund Manager? That is, one investment called "Cash Balance" of type "Cash", and one investment called "Schwab Money Market" of type "Stock".

: - What dates should I enter in Fund Manager for transactions? The day I do the transaction or the settling date? This seems tricky if I want all my numbers to agree. Even though I buy stock on day X, money market shares are only redemmed on day X+3. And it doesn't seem right to enter the stock purchase date as X+3, since that's not when I actually bought the thing.

: - Does Fund Manager have any provisions for handling money market sweeps? It'd be nice if I could enter a sweep date and the program could then automatically know when something is "cash" and when it gets converted to "money market".

: In the end, I just want to make all my numbers be consistent with what Schwab says I have. I keep coming up a few dollars off, and yield percentages are a bit off too (which seems to be because Schwab and I aren't using the same dates everywhere).

: I hope this all makes sense. I'm still learning this stock market stuff so I might be off in left field somewhere...

: Thanks for any help.

Whether to create a separate Cash and/or Money Market investment is really up to you, you could do that. If they are separate on your statements, and you want to keep things aligned with your statements it might not be a bad idea.
On the other hand, it sounds like more book keeping... Both investments would
be best suited to the "Cash" type, as the money market earns interest probably on a daily basis, which the "cash" type is best suited for.

Regarding the entry dates... If the proceeds transfer on different dates than
your purchases you have a couple of choices. You can use the "Default Cash
Account" option in Fund Manager, and be off by a few days. It would be best
to record the stock trade day accurately, and let the cash account be off.
If this isn't acceptable, you can go in and edit each of the cash transfers
after the fact to modify their date to the correct one. The transactions in the stock and cash accounts are not 'hard' tied to each other. FM just automatically creates an entry in the cash account for you, but you can modify it
to be whatever you want, without modifying the stock's side of the transaction.
Another option is to not use the default cash account option at all, and just
record all of the entries yourself.

Thanks,
Mark
--
Mark Beiley

Fund Manager for Windows 3.1x/95/98/NT

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