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Sidebar (again):

Budget entries are entered for the number of years, Start Period and End Period, that they will occur; for example, Income, $100,000, Start Per. 1 and End Per. 20; therefore, annual income of $100,000 will appear in each of the selected years.

Asset entries are entered for the number of years, Start Period and End Period, that an Asset is to be held; for example, Rental Property, $100,000 Rental Property, Start Per. 1 and End Per. 20; therefore, the Rental Property will appear as a holding until the End Per. when it is assumed that the Asset, Rental Property will be sold.

Furthermore, a modifiable thread may be created for each Asset; for example rental property: start @ $200,000, Growth @ 8%, rental income @ $20,000 per year or @ 10% and Inflate @ 4%, hold for fifteen years, sell for projected inflated value or user selected value in year fifteen, proceeds to Savings, and transfer proceeds or balance of Savings to a new Asset, CD's/Bonds, with new income and new holding period.

Assets

Create current and projected investment performance threads for specific Assets—'blocks' of savings/capital and income streams—as the use of actual and projected 'blocks' of funds change over time.

Typically an asset will have two appreciation components; growth and income—each @ different and changing rates for an analysis period.

Each component needs to be broken out and treated separately to generate an accurate capital accumulation projection.

For example, start with a rental property that has current value, appreciation, income, and liability/mortgage components and take it through its known, probable, and or possible life cycle for each of the periods that comprise the range of an analysis:

Continue to track the current and projected values and linked income of all 'blocks' of capital that are part of the investment plan.

The results will be more accurate income, capital accumulation projections than used when relying primarily on global default rate assumptions applied to very broad classes of investments such as Equities.

Assets Data Entry

Assets are added much like Budget items.

• Click on the New icon just to the right of Growth % to add a new entry.
  
  

• To add a new asset, enter a Description, the Value of an Asset, its Growth At rate, if any, Start Period and End Period, and, if you want to see the impact of Excluding and entered Asset will have on selected analyses, check the appropriate Exclude from Analysis box.
  
  

  • If you want an Asset to appear from a selected Start date to the end of the analysis, leave the End Period @ 0.
    
    
• Asset income is entered @ the Asset Income Entry Window.
  
  
  • For example, an Asset titled Rental Property would require the Description, Value, appreciation @ Growth At, if any, @ the Asset Entry Window and rental income, if any, @ Inflate @ at the Asset Income Entry Window.
    
    
• Annual contributions, for example for an IRA, are entered @ the Contributions Window.

• Highlight and double-click on an existing entry to modify it.
  
  
• Existing entries may be copied by selecting the middle icon to the left of the Asset Entry and Asset Income Entry Windows.
  
  
  • For example, if an Asset needs to be converted from reinvesting to taking income/distributions, an IRA for example, there are two options; simply delete the portion of Growth @ that represents income at the Asset Entry Window and go the Asset Income Entry Window and enter the income (disadvantage is that the change flows backward as well as forward in the Analysis Windows).
    
    
  • Or @ the Asset Entry Window simply change the end period when accumulation is to be stopped, highlight and copy the Asset entry and enter the new start period and enter the income @ the Asset Income Entry Window.
    
    
• The icon below the copy/duplicate entry icon is used to highlight and delete an entry.
  
  
• If an Asset produces income that is reinvested into the Asset, then include that in Growth @ in the Asset Entry Window; i.e. in that case Asset Growth is composed of both Growth and Income.
  
  
• If an Asset produces income that is paid as interest or as a dividend (not reinvested into the Asset) then include that income @ the Asset Income Entry Window and those funds will flow to Savings.

Liabilities Data Entry

When an Asset is created, a Liability may be linked to it or entered separately @ the Liabilities tab:

As most individuals think of debt in terms of payment, amount, frequency, and term, entries are made in that sequence with the Total Amt. (calculated by IC based on data entry) including both principle and interest.

Start (the starting period) and Term (for how many periods).

Amortization of a Liability can be selected and calculated to flow through to Budget/Expenses; home mortgage for example.

When a Liability is entered directly @ the Liability tab, such as an unsecured loan, the Loan Amount can be entered with the options of applying the proceeds to Budget/Income which flows through to Savings.

The difference between Total Liability and Loan Amt. being the interest on the loan.

Assets, Buy and Sell

When an Asset is added, the user has the option to click on the Exp. icon which will lead the user through two clicks to have an Asset cost deducted from Savings.

The cost will appear as a period cost item in Expenses @ the Budget tab.

When an Asset is sold, change the Amount to the selling price and change the End Period to the period in which the Asset is to be sold.

The user has the option to click on the Inc. icon which will lead the user through two clicks to have the proceeds of an Asset's sale added to Savings.

The income will appear as period income in Income @ the Budget tab.

If neither the Exp. icon or Inc. icon are used when adding or deleting and Asset, it is assumed that the Asset has already been paid for in the case of adding an Asset and that the Value of the Asset is being removed from the analysis in the case of deleting an Asset.

In the report below, as stated earlier, all of the assets, except Home and Business, have a 0 End Period meaning they are being held for the entire analysis.

Home and Business, as entered each with an End of 20, are scheduled/intended to be sold; at retirement time for example.

• The user can enter the sale using an estimated selling price to show the impact the sale will have on the cash flow analysis or can wait to the actual selling date.

Again, if one is to be sold with proceeds going to Savings, simply change the End Period to the period being sold and select the Inc. icon.

Asset Contributions and Distributions

When Contributions are made to an Asset or when Distributions are taken from an Asset, each is itemized as part of the linked parent Asset; an IRA would be a common example.

The reason for breaking out Contributions and Distributions as itemized cash flows is to facilitate better Asset analysis; asset growth verses asset contributions and asset loss in value verses asset distributions.