Life Insurance in Money 2005 RRS feed

  • Question

  • I would like to know how to register investments and payouts from my life insurance.

    I have set up a retirement account some years ago with a cash account (called contributions). Transferred in € 100.000 and bought 2 investments: a Eurofund € 50.000 price 1 and 1 Sharefund € 50.000 price 50.000.

    I receive interest each year from the Eurofund: Reinvest interest 3.000 at price 1 and the value is correct - 53.000.

    The sharefund of course changes its value all the time. I have solved this by updating the value as 1 sharefund at price 51.000, etc. But now I have reduced the Eurofund to add more to the sharefund and I cannot make this work.

    Sell Eurofund 10.000 price 1 - buy sharefund HOW?

    Another complication is that I am now taking out € 5.000 each month to be transferred to my current account after taxes are paid, but when I transfer I do not have the option income tax, only commission. Should I add more accounts?

    What am I doing wrong - I completely lost it. Can somebody help me get this right, please???

    Monday, March 3, 2014 3:19 PM

All replies

  • I think that a good rule is to make the transactions in Money match what you do in the "real world".  So buying and selling either of your funds should be entered as investment transactions in your investment account.

    I assume that you have these two investment in a single account that is held with a financial institution.

    When you sell, Money will put the proceeds into whatever account you select in the "Transfer to" field. Your financial institution's statement will show the quantity, price, and fees.  You should enter this into Money just a shown on the statement.  

    Generally, the financial institution will put the funds into the cash account associated with the investment account and you should do that also.  Then they will send you the funds and you enter that as a transfer from the cash account to the account where you deposit the funds.  If they withhold some funds for taxes (i.e. you don't receive the full amount of the sale), enter the tax they paid for you as a payment from the cash account to the taxing authority.

    For a sale or purchase of the sharefund investment, your broker's statement will show the quantity, price, and fees.  Enter it just like that as an investment transaction in Money.

    If your "life insurance" is not a simple investment account, maybe this doesn't apply.  Post back with more details and maybe someone with a understanding of life insurance accounts can help.

    Bill Becker

    Monday, March 3, 2014 5:01 PM
  • My sense is that MS Money is optimised for people of working age - people who pay into some form of savings scheme (endowment life assurance, contributary pension, purchase of shares or collective funds etc). But it is not obviously so good at handling the income stream that comes from these investments once you become retired.

    However, there is logically no difference (within MS Money) between a positive payment (of savings contribution) INTO an investment account - and a negative payment (of a dividend or annuity payment etc) recording a transaction OUT of the investment account back to your current account.

    I have a separate 'Investment Account' for each of my Life Assurance policies, and each individual shareholding etc etc.

    I record every dividend I receive (in UK) as an 'Investment Transaction' and separately I record the associated (10%) tax credit as an another 'Investment Transaction' - then as a 'Cash Transaction' (in the Investment Account) I pay the tax credit to HMRC and the dividend to my current account. Using suitable 'notes' in the memo field of every transaction allows me to create 'Reports' that show how each investment has done over time, how all investments have done during any particular financial year, total tax withheld, and more. 

    Within your 'Budget' (if you use that functionality) "Long-Term Savings" may LOOK strange, because all the regular (transfers of) dividends are coloured red and preceded by a minus sign, but believe me this all works perfectly.

    MS Money is an amazingly good program if you filter reports on common text placed in the memo field of any transaction, and use all the functionality.



    Wednesday, March 19, 2014 11:13 AM