Capital Needs

Capital needs are one time expenses and asset purchases that occur in the future. There is no limit to how many capital needs can be entered for any client file. To add a capital need click the button and the Capital Needs window is displayed.

In the Capital Needs window enter the following information:

Description: Enter a description for the purchase/expense.

Primary Client: Select if the purchase/expense is for the Client, Spouse/Partner or Joint.

Asset Type: If the capital need is for an asset purchase, select the type of asset. If the capital need is an expense not tied to an asset select None as the asset type.

Total Cost: Enter the total cost of the purchase/expense.

Cost Type: Indicate whether the total cost of the purchase/expense is being entered as a Present Value or Future Value. If Present Value is selected the amount will be indexed at the Inflation rate entered in the Indexing tab of the Setting area of the data entry wizard.

At Age: Enter the age at which the purchase/expense occurs.

Funding Option: Select the funding option for the purchase/expense. There are three funding options, Cash Funding, Mortgage/Debt Funding and Cash and Mortgage/Debt Funding.

Select Cash Funding if the purchase/expense is being paid out of the client(s) cash flow or a specific investment account. If the purchase/expense in being financed by a mortgage or debt select the Mortgage/Debt Funding. If the purchase/expense is being partial funded by both methods select the combined option.

Depending on the selection for the funding option determines which of the fields below are enabled or disabled.

Funding Amount: When Cash Funding is being used this field displays the amount of the purchase/expense that is being funded from the client(s) cash flow or investments.

From Account: The cash funding option allows for the amount to be paid from Cash Flow or withdrawn from Non-registered, TFSA, RRSP/RRIF or Corporate investment accounts.

Funding Amount: When Mortgage/Debt Funding is being used to finance the purchase/expense the total amount is displayed here. If the purchase/expense is being funded by both Cash and Mortgage/Debt Funding this field is automatically calculated as the difference between the Total Amount and the Cash Funding Amount. For example, a purchase/expense of $100,000 with $25,000 Cash Funding will create $75,000 in the Mortgage/Debt Funding Amount field when combined financing is selected.

Interest Rate: Enter the interest rate on the financing amount of the purchase/expense.

Amortization Years: Enter the number of years payments will be made on the financing amount of the purchase/expense.

Once the description, cost and funding of the purchase/expense has been entered click the button to add the purchase/expense to the plan. Click the button to cancel adding or any changes to the purchase/expense.

Once a purchase/expense is added to the plan it will be displayed on the Capital Needs window. Each purchase/expense is listed separately and can be edited, viewed, copied or deleted.

Edit – click here to open the data entry screen for the selected purchase/expense.
View – click here to view the scenarios that the purchase/expense is included in. All scenarios with a checkmark have the capital need included.
Copy – click this button to make a copy of the purchase/expense. A window prompting for a new description is displayed.
Delete – click this button to delete the capital need. When clicked the capital need will be deleted from all scenarios.