To setup investment accounts in GnuCash you can either use the predefined investment account hierarchy or create your own. The minimum you need to do to track investments is to setup an asset account for each type of investment you own. However, as we have seen in previous chapters, it is usually more logical to create a structured account hierarchy, grouping related investments together. For example, you may want to group all your publicly traded stocks under a parent account named after the brokerage firm you used to buy the stocks.
Regardless of how you setup your account hierarchy, remember that you can always move accounts around later (without losing the work you've put into them), so your initial account hierarchy does not have to be perfect.
To use the predefined investment account hierarchy, you must create a new GnuCash file. This will run the New Account Hierarchy Setup druid. After choosing the default currency to use, you will be asked to Choose accounts to create. At this point, choose the "Investment Accounts" option (along with any others you are interested in). Assuming only “Investment Accounts” were selected, this will create an account hierarchy as shown below.
This is an screen image of the "Accounts" tab after creating a new file and selecting only the default investment accounts.
You will probably at least want to add a Bank account to the Assets and probably an Equity:Opening Balance account, as we have done in previous chapters. Don't forget to save your new account file with a relevant name!
You can also manually setup your own investment account hierarchy. The following is a somewhat more complicated example of setting up GnuCash to track your investments, which has the advantage that it groups each different investment under the brokerage that deals with the investments. This way it is easier to compare the statements you get from your brokerage with the accounts you have in GnuCash and spot where GnuCash differs from the statement.
Assets
Investments
Brokerage Accounts
I*Trade
Stocks
ACME Corp
Money Market Funds
I*Trade Municipal Fund
Cash
My Stockbroker
Money Market Funds
Active Assets Fund
Government Securities
Treas Bond xxx
Treas Note yyy
Mutual Funds
Fund A
Fund B
Cash
Income
Investments
Brokerage Accounts
Capital Gains
I*Trade
My Stockbroker
Dividends
I*Trade
Taxable
Non-taxable
My Stockbroker
Taxable
Non-taxable
Interest Income
I*Trade
Taxable
Non-taxable
My Stockbroker
Taxable
Non-taxable
Expenses
Investment Expenses
Commissions
I*Trade
My Stockbroker
Management Fees
I*Trade
My Stockbroker
There really is no unique way to set up your investment account hierarchy. Play around, try different layouts until you find something which divides your investment accounts into logical groups which make sense to you.