Accounts
Scenario
Account.
You can think of Accounts
So, how do you add an Account? I’m glad you asked.
Step #1
First, log in to your Real Estate Financial Planner™.
Step #2
Click on the link for Accounts from the drop down menu under Planner™ across the top of the page.
Step #3
From the Accounts
Account button.







See Pricing for more details.
Account Inputs
Now that you’ve created a new Account, there is some basic information you should enter about your
Account so you know how to identify it on
Charts, when you’re modifying things with
Rules.
Name Your
Account
You may need to identify this Account from a list of all your
Accounts
Account that will make it easily identifiable.
Here are a few examples that might be helpful, but you’re encouraged to use whatever naming strategies make sense for you.
Stock Market Investment Accounts
If you’re going to use an Account to hold the money that you’re investing in growth stocks you may want to name it “Stock Market – Growth Stocks”. Then, you can set the Yearly Rate of Return for that particular account to model the returns you might expect to see in growth stocks.
If you have a second account that you’re using to invest in index funds, you might name that Account “Stock Market – Index Fund” and set the Yearly Rate of Return to match what your expectations are for index funds.
You can use Rules to move money between
Accounts
Savings Accounts
In some cases, you may choose to model having your reserves and/or your emergency fund in a savings account that has different earning characteristics than a more aggressively invested Account like one that is invested in stocks.
If so, you may want to name that account “Savings – Emergency Fund” and use Rules to keep that
Account at a specific level at all times and put the remainder into other, more aggressively invested
Accounts
Retirement Accounts
Retirement accounts can have specific limitations on them. They may limit how you can contribute to them. They may limit how you can invest them. They may limit when and how much you can withdraw from them. You can create separate Accounts
For example, you might name a retirement account you have as “IRA – Tammy” or “401K – Brian”. Or, maybe you have or will eventually inherit a retirement account. You might name that “Inherited IRA – Dad”.







When Do You Want To Add The
Account?
You will want to have some Accounts
Scenario
Scenario
However, there are some Accounts
Scenario
Use Date Opened to tell the Real Estate Financial Planner™ software when this Account should show up in your
Scenario
Default Cash Account
Every Scenario
Account because the Real Estate Financial Planner™ software needs to know where to keep track of money for the
Scenario
Scenario
Default Cash Account.
The Default Cash Account is special. It is the only
Account that can have a negative balance. A negative balance means that you need to add money from outside the
Scenario
The Default Cash Account, by definition, earns 0% return. Think of it as money under your mattress or in the shoe-box in your closet.
The Default Cash Account is always included in your
Scenario
Default Cash Account.
Learn more about the Default Cash Account.
How Much Are You Starting With?
Next, enter in the Opening Balance for the Account. This is the amount in the
Account on the Date Opened.
How Much Is The
Account Earning?
Finally, what is your expected Yearly Rate of Return for the money that you have in the Account?
This is the compounding rate of return for this Account for the entire year. By that, I mean that the Real Estate Financial Planner™ software does approximately 1/12th of that return on your monthly balance each month that it does its calculations. The Real Estate Financial Planner™ software actually calculates what the monthly return would need to be to make sure your return is exactly the Yearly Rate of Return that you enter here.
This is the starting Yearly Rate of Return. What if you want to have a variable Yearly Rate of Return, or change the Yearly Rate of Return later in the Scenario
You can use Rules to adjust this Yearly Rate of Return over the course of the
Scenario
Rules we can model this return to be a random distribution curve that models the returns you might get in the stock market. Or, say you get a return on a CD for 3 years and then the Yearly Rate of Return changes; you can use
Rules to adjust this Yearly Rate of Return later.
Once you save what you entered above, you have successfully created an Account.
Best Practices
Here are some additional best practices for setting up Accounts
- Do not use your actual account numbers for naming your
. While the Real Estate Financial Planner™ software uses banking-level encryption, why add extra risk by putting your real banking account numbers out on the web in an additional spot on the web.Accounts
- Be brief, but descriptive. “My Retirement Account” is OK. “Joe’s Roth 401K” is better. We do try to use the
stylized text with icon when referencing an account so you really don’t need to use the word “Account” when naming yourAccount
in the software.Accounts
- Accuracy Matters, But Just To a Point – If you’re actively using these
in real life the balance of them is going to vary. You’re never going to get the balances of these exactly right. Plus, in most cases the returns you’re getting on them is never going to be exactly what you entered. So, to think that you’re off by a few hundred dollars is going to make a difference is letting your control-freakiness show a little too much (this is coming from one control-freak to another). Heck, for certain folks, you can be off by a a lot more than a few hundred dollars and that would be eaten up by noise in your returns and modeling. So, chillax about accuracy… especially with starting balances. You can always come back later and update the starting balance and re-run it… that’s what you should be doing anyway.Accounts
Are Reusable Across MultipleAccounts
– While you can choose to use differentScenarios
in differentAccounts
you create, in many cases you’ll choose to use the sameScenarios
across multipleAccount
.Scenarios
Accounts
The following are additional blog posts related to Accounts
Adding To
Scenarios
Want to read other blog posts that relate to adding Accounts
Properties,
Rules to
Scenarios? Here are a few blog posts about that.