Feature: Quicken 2003 Premier vs. Money 2003 Deluxe
Each fall as automakers roll out their latest offerings, so too do the heavyweights in the personal finance software arena. It has been three years since our last head-to-head comparison of Quicken and Money, so we devote this article to looking at the latest high-end offerings from Intuit and Microsoft—Quicken 2003 Premier and Money 2003 Deluxe, respectively.
We cover everything from the latest features both programs offer and their primary functionality to their companion Web sites. At the end of the article, an overall winner is determined by a check-box scoring system. Points of functionality are graded with ease-of-use in mind.
While both Money and Quicken offer an expanded array of features and numerous improvements, Money underwent more “nip and tuck” changes, whereas Quicken saw a major cosmetic overhaul.
Perhaps the most attractive new feature for Money 2003 is the bevy of free offers that come with the program. They include one year of free on-line bill payments from MSN, on-line tax preparation and filing from H&R Block, a credit report and credit monitoring service from Equifax, and a consultation with an American Express financial planner.
For Quicken 2003, its designers completely redesigned the user interface, which those familiar with the previous versions may find to be more of an annoyance than an improvement. However, with version 2003, Quicken surpasses Money in interface design and ease-of-navigation. Money’s display is cluttered, while Quicken’s is much cleaner—to the point of almost being bare. While it may take some time to master the new setup, you should find the redesign an improvement and worth the cost of upgrading from an earlier version of Quicken.
The upgrade that is garnering the most press in Quicken 2003 Premier is the new Quicken Brokerage Powered by Siebert, along with several other investment-related add-ons, which we will discuss in the next section.
Personal finance software generally helps users answer three financial questions: What do I have, How am I doing, and How can I do better? To accomplish that, they help you examine your current financial position and provide a framework for achieving your financial goals. For many, the list of personal tasks is long and varied. These two programs can serve as mere recordkeeping diaries that track what you spend and what you earn, or they can function as planning applications that consider only gross savings and focus on generalized long-term goals and objectives.
The nucleus of a personal finance program is its “checkbook register.” Data entered here flows into budget accounts, updates net worth values, and helps estimate tax liabilities, among other tasks. The majority of your time will be spent using this register. Therefore, it is important to select a program with an intuitive, easy-to-use interface, as well as one you are comfortable using. Both programs offer clean, graphical replicas of standard checks, as well as checkbook registers, but Quicken 2003 edges out Money 2003 when it comes to the checkbook register interface, which is slightly easier to navigate in Quicken.
On-line banking and brokerage functions available with both programs give users the ability to connect directly with a number of financial institutions—including banks, brokerage firms, and credit card companies—to retrieve posted transactions, download statements, and pay bills electronically. Our test of setting up and retrieving statements and transactions from banks and credit card companies went off without a hitch using Money. However, a conflict with Quicken’s automatic bill payment created some minor problems in downloading bank statements into the program. Retrieving transaction data from an on-line discount broker posed seemingly insurmountable problems for both Quicken and Money and, as a result, portfolio transactions had to be entered manually.
Once you have your accounts set up, you can retrieve pertinent information via the Internet. With Money, this is done via its background banking feature, which automatically downloads financial account data and stock prices whenever you go on-line. There is no need to schedule when Money goes on-line to access this information, which is required with Quicken—a definite shortcoming. The only drawback to Money’s background banking is that it requires you to have a Microsoft .NET Passport Account.
For electronic bill payment, Quicken offers Quicken Bill Pay service with a free 30-day trial, while Money provides bill payment through MSN Bill Pay free for one year (with purchase of Money 2003). Money 2003 now contains a bill outbox and a batch bill pay functionality that allow users to prepare and store bills—even when off-line—and submit multiple payments at the same time. Also for paying bills, Money 2003 has added a bill estimator, which automatically estimates upcoming bills based upon previous payments.
Another key feature of any personal finance application is its budgeting capabilities. Both products allow you to assign budget categories, as you enter transactions into the checkbook register. The programs come with a predefined set of categories, but also allow you to add you own additional categories. Money and Quicken also “remember” the category for a payee from previous entries. In Quicken, you can manually enter in the amounts you pay each month or let the program create a budget based on your past spending patterns. One drawback to this “auto budget” feature is that the budget Quicken creates may not accurately reflect how you spend your money if you have not categorized your transactions. Money’s autobudget feature offers the same functionality, with the same potential pitfalls. However, when setting up your budget, Money’s budget planner tool is more intuitive and offers greater ease-of-use than Quicken.
Budgeting involves much data entry (cash activities, credit card histories, etc.) and a dedication to maintaining organized groups of your data (income, payments, expenses, taxes). The computer program cannot do all the work for you, so it is up to the user to maintain accurate records and make it a habit of updating records and accounts on a timely basis. While this can be a tedious and time-consuming process, it is unavoidable if you wish to gain an understanding of your spending and saving habits. If you are willing to go the extra mile, both programs do an adequate job of maintaining budgets and producing planning forecasts.
Reports are a key component of any personal finance program and help to pull your financial plan together in an easy-to-understand, graphical format. Along with being two of the most easy-to-use financial programs on the market today, Quicken and Money are also the most graphical and visually pleasing. Within both programs, reports are comprehensive, easy to read, and coherent, and provide a useful breakdown of your financial information into specific categories. Specific financial reports include detailed budgets; income, expense, cash flow, and net worth reports; and income tax estimates. Each program offers approximately 40 reports.
Since taxes impact your finances, they also play an important part in the budgeting process. Pending tax liabilities are often reviewed and personal finance programs offer suggestions and adjustments to help you reduce your tax liability or perhaps to modify your tax withholdings. Both Quicken and Money link to tax preparation software programs, so that data entered into these programs can be exported into the tax program for analysis.
To aid investors in making tax-informed trading decisions, Quicken 2003 Premier offers tax-smart investing insights that point out possible opportunities to improve your aftertax returns. Specifically, Quicken 2003 Premier can help users offset capital gains or losses, inform users when similar but more tax-efficient mutual funds are available, and alert users when taxable events occur—such as mutual fund distributions.
Money 2003 offers a beefed-up capital gains estimator and tax estimator. With the capital gains estimator, users can create and save a variety of scenarios to determine the most tax-efficient approach to selling an investment. The tax estimator provides a side-by-side comparison of the previous year’s tax return to the current year in order to estimate upcoming taxes.
Quicken works seamlessly with its longstanding tax stablemate at Intuit—TurboTax for Windows and Mac—as well as with the TurboTax Web site. Over the years, Money has moved from working exclusively with TurboTax to Microsoft’s own tax preparation software—TaxSaver—to now offering free tax preparation and filing with H&R Block’s TaxCut software. With H&R Block, a trusted name in tax preparation, and TurboTax, practically the name in tax software, it becomes a wash when comparing the programs’ tax functions.
Besides creating budgets to gauge your spending habits and preparing and filing your taxes, financial planning entails other tasks for which both programs can provide help.
In Money 2003 Deluxe, other planners you have at your disposal include debt reduction, insurance, and lifetime, while Quicken offers retirement , college , home purchase , debt reduction , and special purchase planners. While both programs provide a number of planning tools, only Money has taken the extra step of integrating them all into “whole-life” planning. This is something that Quicken should strongly consider.
Both programs also offer IRA planners, insurance planning aids, insurance and mortgage on-line shopping directories, home and auto valuation tools, and home inventory assistants.
Home inventory is simply a list of your personal possessions—fine jewelry, rare pieces of art, collections, etc. If your personal possessions are either stolen or destroyed, an accurate inventory will help you when filing your claim. This feature allows you to enter specific tangible assets into predefined categories, with the option of entering purchase price, date, depreciation, a description of the item, and the insurance policy covering it. Both applications provide very similar home collection tracking, although Money has the added feature of linking images to your possessions. Furthermore, whereas Money’s inventory tracker is integrated with the program, Quicken home inventory is a separate module from the actual Quicken software.
When looking at the personal finance software marketplace, individual investors have a limited selection from which to choose. However, this is not the case when it comes to portfolio management programs running on Windows—several are available. In the broader portfolio management market, programs are divided into two groups: general purpose applications and advanced programs. This clear differentiation gives investors more flexibility and more choices. The high-end programs are robust portfolio managers that concentrate on portfolio evaluation and fine-tuned portfolio and asset allocation analysis—such as the Captool software. For more information on portfolio management software, refer to the November/December 2001 Computerized Investing comparison article.
The general-purpose programs are viewed as recordkeepers or actual portfolio trackers, instead of full-blown portfolio managers. They adequately track a portfolio and may offer some portfolio analysis measures and return calculations. However, they primarily serve as advanced spreadsheets for recording buys and sells of securities. Quicken and Money both fit into the category of a general-purpose portfolio manager.
While these programs do not yet have the tools and features to take on the top-tier portfolio management applications, they have, over the years, moved beyond the scope of traditional personal finance tasks—budgeting, bill payment, and account tracking—to begin focusing on investing as well. This year’s releases of both programs take coverage of investments to the next level.
Key to portfolio management programs are the types of securities and transactions the program can handle. Both Quicken and Money track a standard set of securities: cash, stocks, mutual funds, and bonds. Money 2003 Deluxe has added an option wizard tool for creating and tracking equity and index options (not employee stock option plans). The program also has added an exercise wizard that guides you through the process of exercising existing options. Furthermore, the Money register can now handle options-related activities. None of these features are yet available with Quicken. For security identification and categorization, both programs offer similar features, including the ability to specify asset class type.
Recordkeeping is a relatively simple task that, in theory, can be done with paper and pencil or a simple spreadsheet. However, errors that can arise with such methods can distort your financial picture to the point of causing you to make unsound financial decisions. A portfolio management program rises above the potential pitfalls and presents professional reports based upon the data you enter.
Buying and selling a security, receiving cash or stock dividends, and receiving interest income are the primary transactions you will need to record. Moving beyond these standard transactions, both Money and Quicken offer additional recording options such as margin purchases, short sales, and the reinvestment of dividends. Both programs also allow for three different security lot assignment methods—average cost, FIFO (first in, first out), and specific lot. Transactions and security lot cost basis methods are handled in relatively the same manner with both programs. The only real difference between the two lies in entering investment-related transactions. With Quicken, all transactions are handled within the same checkbook register, while Money has separate registers for “investment” transactions—buys, sells, etc.—and for “cash” transactions—dividends, interest income, withholding taxes, etc. Jumping between registers depending on the transaction is an unneeded step.
While both programs have made great strides over the years in the area of investment tracking and analysis, Microsoft 2003 Deluxe gets a slight nod over Quicken 2003 Premier for its handling of investments. The clinching factor is the program’s tight integration with the CNBC on MSN Money Web site, which is one of the best financial Web sites available.
Data entry takes up a significant amount of your time when it comes to setting up a program to monitor your finances and, especially, to track an investment portfolio. A complete purchase and dividend history must be entered for each security to produce accurate return calculations. This process is typically more of a burden for long-standing mutual fund positions with frequent reinvestment of dividends. The payoff for this effort is the automatic creation of a range of useful reports with only a couple of mouse clicks. Reports can be as simple as a basic portfolio holdings report that breaks down the composition of your holdings, or as sophisticated as an asset class performance report gauging the strength of, for example, your foreign stock funds.
The basic reports found in most portfolio management software packages include current holdings, holdings by lot, cash portfolio status, and popular tax schedules—e.g., Schedule B for computing interest and dividends received from a portfolio and Schedule D for computing long- and short-term capital gains. All of these basic reports are available in both Quicken and Money. For the most part, the programs are equally matched when it comes to basic reports and both allow for reports to be customized (adjust column headings, choose data to be presented, etc.), which is a nice plus. One unique feature offered by Money is the ability to export chart and graph data to Microsoft Excel spreadsheets.
Performance reports summarize how well your investment holdings have fared over a given time period. They can analyze broad categories or concentrate on the smaller, fine points of your portfolio. A fundamental part of the portfolio management process is to determine and analyze performance—either using return calculations or performance reports.
Portfolio return calculations present the clearest view of how well your investment holdings have performed. Two different types of return calculations can typically be found in a portfolio management program—the value-weighted (also referred to as dollar-weighted) internal rate of return (IRR) and the time-weighted rate of return. The value-weighted IRR is best for gauging the true performance of your portfolio’s return. The IRR is both a value- and time-weighted calculation in that it considers both the timing of investment inflows and outflows, the amounts of these flows, and the combined impact upon the overall rate of return. A time-weighted rate of return calculation ignores the impact of money flowing into or out of an investment account and paints a picture of only the security selection decisions. It is typically used to measure the performance of money managers.
The first key type of performance report is actually three different reports revealing essentially the same thing, but for three different portfolio entities. Security, industry, and asset class performance reports gauge the strength of each individual segment, but will also provide portfolio allocation analysis at the same time. Industry performance reports can analyze just the securities from a certain industry, say auto manufacturers, while asset class performance reports analyze a group such as foreign equity funds. The 2003 versions of Quicken and Money provide only security and asset class performance reporting. When it comes to reports and reporting capabilities, optimally three flexibility functions must be present: the ability to track multiple portfolios, the option of testing portfolios over a known holding period as well as a user-defined time period, and the ability to adjust returns for taxes. All three functions are available with both Quicken and Money.
Most, if not all investors track more than one portfolio—perhaps one for themselves and one for their spouse, or taxable versus retirement portfolios, or separate portfolios for each child. Programs with the capability to house multiple portfolios can easily address the diversified aspects of all your holdings for all your portfolios, rather than those of just one portfolio.
A portfolio return for the current holding period examines the gain or loss from the time the security is purchased. Analyzing a portfolio over specific periods—between-period returns—allows you to monitor security performance during a known market environment, such as a bull or bear market. To designate time frames, a program must be able to store snapshots of your holdings and values at specific points in time, not just the current positions and prices.
When a program provides tax-adjusted returns, this simply means that it generates pretax and aftertax figures. By automatically calculating the tax liabilities of your transactions, these programs can also report their impact on the rate of return of the securities and portfolios.
The most noteworthy enhancement to Quicken 2003—beyond revamping the user interface—is the partnering of Intuit with discount broker Muriel Siebert & Co. to form Quicken Brokerage Powered by Siebert. Quicken brokerage, which is also a stand-alone product, provides discount brokerage services with a $24.95 commission for on-line equity market or limit orders, access to research and analytical tools, and tax-informed investing insight. Reflecting the shift in the focus of these programs in recent years, Quicken brokerage’s goal is to help users “make smarter, tax-informed investing decisions.” To this end, users of Quicken brokerage receive information about the potential implications of a trade before it is made. The brokerage can also upload your tax profile from Quicken 2003 to track ongoing capital gains and losses. Lastly, you can export Quicken brokerage 1099 information directly into Intuit’s TurboTax program for easier tax preparation, including cost basis information for your Schedule D.
In the continuous game of one-upmanship between these two rivals, it will be interesting to see if Microsoft attempts to follow Intuit’s lead and partner with a broker as well.
To see how these two programs match up as portfolio managers, check Table 1 at the end of the article.
Although both Quicken and Money are software-based applications, they also have a strong presence on the Internet in the form of their respective flagship Web sites: Quicken.com (www.quicken.com) and CNBC on MSN Money (investor.msn.com). Both sites are comprehensive one-stop investment centers on the Web, offering analysis tools, research capabilities, company reports, current and historical price and financial data, market news archives, advice, and educational materials. Furthermore, they are free to registered users.
Money 2003’s many investing-related enhancements revolve around the program’s ever-tighter integration with the CNBC on MSN Money Web site. This includes instant access to the MSN Money Online Investing Research Center through Money’s integrated Web browser. (In Quicken, the Web browser opens in a separate window, creating unnecessary clutter.) From the research center, users have access to one of the best Web-based portfolio managers that now allows for creation of an unlimited number of customized portfolio views. The MSN Money Web site also offers StockScouter stock ratings, allowing users to evaluate a stock’s potential based upon both fundamental and technical factors.
Just like Money 2003, Quicken 2003 offers an array of investment analysis tools and research through the Quicken Brokerage Web site (www.quickenbrokerage.com). Among them is the One-Click ScoreCard, which applies one of four stock selection approaches to help users evaluate stocks. Also new to Quicken 2003 Premier are intelligent alerts that inform you of investment-related events that impact your portfolio—such as a stock beating analyst earnings estimates. Users of Quicken can also enter transactions into the Quicken Web site and then download them into the Quicken software at another time.
If you are looking for a free, full-featured trial from either one of these companies, you will be sorely disappointed.
Instead of offering full-version trials of their software, Microsoft and Intuit provide Web-based demos of each program where potential users can go through a virtual demonstration of the programs and see their features and functionality. The “tour” of Quicken 2003 Premier is available at: www.intuit.com/quicken2003/demos/premier/quicktour.html.
Money 2003 Deluxe is available in a free 60-day trial version, downloadable from the Microsoft Web site (www.microsoft.com/money/info/trial/). However, it lacks the audio and multimedia features found in the full program and, perhaps more importantly, the “premium” services available with Money 2003 Deluxe—on-line banking, on-line bill payment, etc.
While being able to see the key features of each application is useful, nothing beats being able to sit down with the software, risk-free, and take it for a test drive.
From the discussion presented here, it may have become clear that Money and Quicken are perhaps evenly matched in their latest incarnations. When the choice is difficult between two similar programs, as is the case here, users often end up picking the more familiar one. Most will go with the firm with the bigger name, but in this case, both programs have established themselves at the forefront of the personal finance software field. Emotional ties often factor into the equation as well. Just as some people are Chevy or Ford owners, so too are the diehard Mac and Windows fans. At least as far as platform goes, the choice is clear-cut, since only Quicken offers a Mac-friendly version in the form of Quicken 2003 for Macintosh. However, it is not nearly as full-bodied as its Windows-compatible cousins.
No matter what your rationale for purchasing any software program or service to assist you with selecting and managing your investments, make sure it is the right one for you and your investment needs and that it closely matches your computer skill level. With this comparison, we have tried to provide an objective review of these two products, but any review is bound to have some level of subjectivity.
Table 1 provides a checklist of our head-to-head comparison of Quicken 2003 Premier and Money 2003 Deluxe, with Money prevailing over Quicken.
Each check in the personal finance, portfolio management, and technical support sections rate one point. One-half point was awarded for each checkmark in the companion Web site section. A checkmark is awarded if the program excels in providing an easy-to-use and functional feature.
As mentioned, these two programs are very evenly matched, more so than the final point totals indicate. Money proved to be the better product on the whole, but Quicken still remains a strong contender. In the end, however, neither Money nor Quicken present a compelling enough reason for existing users of earlier versions to upgrade to 2003, or to switch programs.
|TABLE 1. Rating the Programs|