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Money Software That Needs Taming


BusinessWeek Investor -- The Barker Portfolio

Money Software That Needs Taming

A few years back, I tried to track every penny my family made, invested, and spent, right down to my daughter's outlays in the school cafeteria. I had succumbed to the pathogen known generically as personal-finance software or, more commonly, as Quicken.

What cured me was the slow dawning that all the time I spent typing in stuff like "10-1-1996...Gemini Elementary...Food...$11.20" was foolish. Even if I could show we spent, say, $300 on kids' sneakers in 1996, did I have the clout at home to cut those costs in fiscal '97? History tells us no.

Yet the allure of Quicken and its main rival, Microsoft Money, keeps growing. Both Microsoft and Quicken's maker, Intuit, are striving to integrate their packaged software with Internet services. Easier downloads of bank and brokerage statements can cut the time spent keying in data item by item. I've forsworn tracking pennies, but my portfolio is something else. That's why I devoted several days recently to the Year 2000 deluxe versions of Quicken and Money (table). I hoped to find that, at least for portfolio tracking, the software is worth the time.

Unfortunately, it's not. Yes, the programs have steadily improved. Both boast some cool new features. By linking to Quicken.com, for example, Quicken has a neat way of reckoning your portfolio's asset allocation and suggesting, in dollars, exactly how to rebalance back to your targeted mix of stocks, bonds, and cash. I also liked how Money allows "synchronization" of portfolios stored on a PC with those kept at MSN's MoneyCentral site. This lets you watch or edit portfolios anywhere.

Trouble is, it all still takes way too much time and remains prone to error and confusion. After touring each program's vast terrain of features, from financial planning and taxes to budgeting, I set up a test: a hypothetical portfolio of seven mutual funds with a variety of transactions--buys, sells, dividend reinvestments, and distributions--dating back to last Dec. 31. My goal: to learn the portfolio's annualized percentage return. A basic fact, but the frequent flows of cash in and out of most real-life accounts make it hard to come by --a perfect reason to buy this kind of software.

Despite downloading some of the data via the Net, the whole chore of setting up this relatively simple portfolio in Money cost me two hours and lots of eyestrain. Next, I copied the data file to create an identical account in Quicken. Finally, I used each program's "Reports" function, designed to answer such common queries as, "How's my portfolio doing?" Money said the portfolio was growing this year at an annual rate of 5.8%. Quicken's answer? 1.4%.

A couple of hours later, I found the problem: Quicken had incorrect prices for three of the funds in the portfolio. But what caused it? Had I set up the account wrong? Had I messed up the download of updated prices? Had a gremlin crept in when I imported the data to Quicken? I could not tell, nor could I be sure Money was blameless, since it had double-counted fund distributions in an earlier download. The whole experience left me feeling once again like a fool.

Some people swear by personal-finance software. Ernie Kluft, a computer-systems executive who recently retired from Texas Utilities, is among an estimated 16 million users of Money and Quicken. Early this year he was on a long-term business assignment in Mexico City. "I spent a lot of time sitting in my hotel room with a laptop and nothing to do," he told me. So he auditioned both programs, settling on the latter for its planning tools. Now, he says, he downloads in seconds his monthly statement data from Fidelity Investments, which he used to spend two to three hours typing in each month. "It's slick," he says. "It's really pretty much idiot-proof."

I know what that says about me. I'm just going to bide my time until it's fully idiot-proof.Questions? Comments? E-mail barkerportfolio@businessweek.com or fax (321) 728-1711By Robert BarkerReturn to top


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