So once you have decided on your strategy to reach FI, figured out which stocks and ETF funds to buy and then gone out and bought your stock, how do you manage your portfolio? You have a couple of options available to you…
1. Use your broker
You could use your broker to keep track of your investments. Most online brokers provide a pretty decent web interface for your browser, and SelfWealth even has some fancy info-graphics and tables that translate well to the mobile app. But, these in general leave something to be desired, and don’t really allow you consider the effect of dividends on your returns, or the functionality to download tax documentation. They are somewhat useful, but not really that great for helping you keep track of your journey to FI.
2. Use your registrar
Another easy option is to use your registrar, that is the registry of your share. They have a slightly better display than most brokers, and offer information on dividends, reinvestment and most of the required documentation for tax purposes. But most are still a little clunky, and I know that one of my registrars offers a pay-per-service for things like tax documents. Don’t they know the whole reason I bought ETFs was because I was chasing FI and wanted to lower costs? Psshhh!
3. Use an excel spreadsheet
Now… I’m not ashamed to say this is how I started. And I even developed a beast of a spreadsheet. But it all got a little… complicated. And I didn’t back up my files properly and well, you know the rest…
4. Buy accounting software
You could buy accounting software… or even worse.. pay for an accountant or financial planner to manage your affairs. Sorry, I don’t know if you heard that but I think it was the sound of many many$50 and $100 notes being ripped up every year… 😅
5. Use the best free online portfolio management tool – Sharesight!
Sharesight is a great tool and is completely free if you have under ten holdings. They provide a paid service for higher volume traders or financial professionals, but all you will need is the free service! Check out a quick and dirty 90 second video on Sharesight below
Sharesight was created by DIY investors Tony and Scott, a New Zealand based father and son team in an effort to figure out a better way than just entering things into excel spreadsheets. The two met up with some web developers and over a bottle of wine formed a company and got to work. Check out their story below;
If your keen to learn more, check out The Aussie Firebugs interview with Doug Morris the CEO of Sharesight, for an in depth discussion about the company, and how Sharesight can help FIREstarters on their journey towards financial independence
I personally love using Sharesight. It is quick and easy to update my holdings every time I make my regular investment decision on the path to FI. Come tax time I simply click ‘print’ to get a completely free tax documentation pack. I literally just hand this to my accountant and then sit back smugly, while they enter the numbers into their software and compare the answers. Having the information on all my stock market index fund ETF investments right on hand means they finish off my tax return in half the time it used to take when I was printing off all the individual holdings from the different registries. This saves me time and money on the hourly accounting rate (I saved $200 last year!)
Sharesight have even developed a mobile app, but I’m staying away from that for now. I only log in to my brokerage account once a fortnight to make my regular investment decision, and then into Sharesight to update my holdings (if I remember). Other than that, I log in at tax time to make sure all the dividends and stock purchases are accounted for, and to gather the documents for my tax return.
Check out Sharesight, you’d be crazy not to use this completely free and advanced portfolio management tool. Just don’t log in to hawkeye your ETF balances… its a bad habit!
If you have any experience with Sharesight or any other portfolio management tools, let us know in the comments below. I’d love to hear other peoples suggestions or tips for how they have tackled this problem in the pursuit of Financial Independence.
Get FI !