Step 9 - Create 'Recycle My Debt' Scenario

Step 9 - Create 'Recycle My Debt' Scenario

GENERATE 'RECYCLE MY DEBT' SCENARIO

Once you have completed your data entry, and reviewed the results of your Default Scenario, you are ready to create your optimised debt recycling scenario.


To generate your Recycle My Debt Model:

1.      Click on the Scenario window (top right of screen)


2.      Select "Manage Scenarios".  

         This opens up the MANAGE SCENARIO screen.




3.      Click the blue button CREATE RECYCLE MY DEBT SCENARIO. 

         This opens the RECYCLE MY DEBT WIZARD. 


4.      On the SETUP RECYCLE MY DEBT SCENARIO screen, complete the following four pieces of information:

      1.     Reserve Cash Amount 


      You may want to specify the client wishes to keep a cash reserve at all times. 

                  If so, include the figure here.   If not, leave the Reserve Cash Amount at zero.


      2.     Global Debt Limit 

Insert the maximum amount the client would be able to borrow.   Prospera has calculated a default global debt limit based on 80% of the value of the private residence.  This can be adjusted according to your preference.

If the client has a borrowing capacity of $1 million, but you only want them to be able to borrow $600,000, include $600,000 as the Global Debt Limit here. 

If you do not do this, the system may draw up to $1 million.  These figures can be adjusted if you look at the result and would prefer less borrowings are used.

 


      3.     Auto Invest End Date


      Insert the date you would like regular investing to cease.


      Typically this date is approximately five years prior to retirement (based on the ClearView and Matrix gearing rule).



      4.     Retirement Funding Age 


      Insert the age you would like retirement funding to continue to; typically life expectancy or approximately age 90-95.

Prospera has inserted a default retirement funding age, calculated using life expectancy tables.

5.      Click UPDATE to save the data and generate your new RECYCLE MY DEBT Scenario.



6.      Your Recycle My Debt model has now been created, as indicated by the red arrow in the below screenshot.





7.      Click on the Scenario Name to view  the Recycle My Debt Scenario.



8.      If you wish to ADD in any Adviser Fees into your Recycle My Debt Model  (upfront and / or ongoing fees),
         these should be added now (via the EXPENSES page).  
          (Click on the link to view how to add Adviser Fees - Link to Adviser Fees Expense Topic)


9.       Click on RESULTS to view the Result for that Scenario.     

         ALTERNATIVELY, 
Click on RESULTS & REPORTS (from the left-hand menu) to view the Recycle My Debt Results on screen, or generate a Scenario Comparison Report, which will provide you with a side-by-side snapshot of the results at the following time intervals:

                        *      Five years from plan start date
                        *      Ten years from plan start date
                        *      At retirement.

There are various Reports available from the RESULTS & REPORTS screen, the STRESS TEST RESULTS screen, and the COMPARISON REPORTS screens.  

Please refer to the Results and Reports topic for more detailed information regarding the Reports.

Once you have reviewed your RESULTS, you may wish to CLONE THE SCENARIO (by clicking on the icon indicated by the green arrow in the below screenshot), and model some slight modifications, such as some additional super contributions, or adjusting dividend payments.

There are some tips on how to model slight modifications to the model in the Modify the Model topic.





Link to Next Article - 
Reviewing Results







    • Related Articles

    • Step 1 - Create Your Client

      1.   CREATE NEW CLIENT       To add a new client:       Click the ADD NEW CLIENT button, in the lower left of the Dashboard screen, below the Client List.             This will take you through to the ADD CLIENT screen, where you will add the client. ...

    • Overview 2 - What does the Recycle My Debt Modelling Option Do AUTOMATICALLY?

      The 'Recycle My Debt" Modelling Option: 1.      Allows you to very quickly input the required client current data (home value, current loans,          income, expenditure & super) to create a model. 2.      Create a copy of the client data and apply ...

    • Step 9 - Review RESULTS

      Once you have completed the data entry for your client, you can now review the Results for the client, based on their current financial situation and structure. To do this, click on RESULTS from the left-hand menu.   On this RESULTS screen, you will ...

    • How to Create Tracked Accounts and Link to Accounts in Scenario

      Before you implement your Prospera client for tracking, you will need to create the accounts that you wish to track.  These accounts are known as the Tracked Accounts.   Once you create your Tracked Accounts, you need to link them to the scenario ...

    • 2 - How to Change the Global Debt Limit (Maximum Borrowing Level)

      To change the GLOBAL DEBT LIMIT (Maximum Borrowing level) after creating your Recycle My Debt scenario: 1.      Click on the ACCOUNTS tab (from the left-hand menu) 2.      Click on the link at the top of the page (as indicated by the arrow in the ...