facebookDo you include your 'investment' under expenses/income when tracking your own expenses or seperately, or both? - Seedly

Do you include your 'investment' under expenses/income when tracking your own expenses or seperately, or both?

I've been tracking my income and expenses for the past few years but only started investing in P2P platforms recently.

So, because of that, I noticed that my income and expenses shot up quite a lot and I realized it was because of my investments & not work income. I feel that it didn't gave me a true picture.

For example, I invested in a campaign in late Dec 19, hence included it in my expeses but since it has not reached maturity, so to speak, it seems that I'm spending a huge % of my income.

Discussion (1)

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Pang Zhe Liang

25 Jan 2020

Fee-Based Financial Advisory Manager at Financial Alliance Pte Ltd (IFA Firm)

When you take money to invest, your money flows from income to expense. Therefore, it is accounted under your cashflow statement at this stage.

Once you purchase your investment, the money from your expense is used to purchase an asset. As a result, it will be accounted under your balance sheet.

In summary, there are two things to account for depending on which stage you are at. All in all, your money will flow from income to become an asset eventually. Hence, you will need a balance sheet to account for your net worth.

In case you need a way to account for cashflow, here is a template that you may use: https://www.blog.pzl.sg/understanding-your-pers...

I will be updating it with a balance sheet in the near future.

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