Third Party Investment Accounts Workflow - Confuddled

Hi,

I'm struggling to come up with an adequate workflow for managing my investments. The investment account is held in a third party company and linked (not Old Mutual or 22seven product).

The objectives:

  1. Quantify total investment contributions.
  2. Quantify total investment charges (TIC).
  3. Quantify total investment taxes including dividends tax.
  4. Quantify income other than capital growth - dividend income, interest.
  5. See changes in investment capital (i.e. underlying share price changes as pulled from 3rd party statement. Think this is covered so far.

The workflow is a bit of a maze at the moment.

For item 1: Total Investment Contributions

There are flows from my 22seven linked accounts (e.g. FNB). Do I categorize these as transfers? The Invest-Save-Repay category seems to be an account to which you contribute and grow, however is it a transfer i.e. net no gain, or an outflow (payment) from transactional/cheque account (expense) and then inflow to Invest-Save-Repay? 

If I show as an expense and income, or a transfer, the net gain is the same. Not sure which is best to meet the objective - see below.

For item 2 to 4: Custom categories

The custom categories cover this somewhat, but I don't want these income/expense to be mixed in with other spending groups.For instance, right now I have to show these as an Income spending group. I would like it to all be housed under an Investment spending group (Invest-Save-Repay) in order to see the net growth, and then in the category as expenses (fees, taxes) and incomes (interest, dividends). I want to see if I grown my net investments (not overall net worth) in the spending group, and what proportion was dividends, interest, fees, taxes, etc.

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  • Hi Nadim,

    Thanks for reaching out. 22seven's categorisation system is meant to be flexible, meaning that there really isn't one right way for you to track your money flows.

    The categorisation system is focused though on transactional accounts, as these are the accounts that appear in your budget (investments, loans and home-loans do not appear in the budget).

    For your 1st point, you can either mark these transactions from your current account to your investment account as ISR (invest-save-repay) or transfers. This is up to you.

    BUT the reason we have the ISR spending group though is for customers to recognise that their investment/savings contributions should form part of your monthly expense budget. For example, you are purchasing assets that have a rand value, rather than simply transferring to another account.

    Tracking the amount you have contributed to any investment (or savings account) would be easier by checking the in-flow on your investment account, rather than the out-flow from your current account.

    Transfers are best used when simply moving money from one account to another, like when paying off a credit card.

    As for your other points, it would be best to view your investment transactions completely separate from your other transactional accounts. You can do this by using the advanced filter on the Transactions page.

    Your investment transactions do not appear in your Budget, so these can be considered completely separate from your transactional accounts in the budget.

    Please bear in mind though that credit transactions can only be marked as Income or Transfers. These are not expenses and so cannot be categorised under ISR (or day-to-day/recurring/exceptions). The only spending group both credit and debit transactions can fall under is the Transfer spending group. 

    The spending groups are not as important within investment accounts because they do not appear in the Budget, but whether or not you use them is up to you. Personally, I simply mark all my 3rd-party investment transactions as Transfers and rely solely on the default and custom categories in order to provide the detail I am looking for within that investment account. I leave the spending groups only for use with accounts appearing in my Budget. Perhaps this would make things easier for you as well?

    Sadly, we do not a categorisation system that is tailored specifically to investments at the moment in order to provide the detail you are looking for. This is something we'd like to improve upon though, considering our prior focus on transactional accounts, so I'll be happy to pass on your feedback.

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