Planit:Calculating Your Client's Net Worth Case Study

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Canada English

Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Contents 1 Example Problem One: 1.1 Solution using Detailed Assets: 2 Example Problem One: 2.1 Solution using Detailed Assets: 3 Example Problem One: 3.1 Solution using Detailed Assets: 4 Example Problem One: 4.1 Solution using Detailed Assets: 5 Example Problem One: 5.1 Solution using Detailed Assets: 6 Example Problem One: 6.1 Solution using Detailed Assets: 7 Example Problem One: 7.1 Solution using Detailed Assets: 8 Example Problem One: 8.1 Solution using Detailed Assets: Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $150000 with a down payment of $45000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and Semi-annual compounding. The house has increased $30000 in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $12000 at a rate of 5.00% for a 3-year term. This loan is compounded Monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $2000 with no debt. Donna has $20000 in RRSPs invested in Fixed Income and $40000 in {{{Nation for mutual funds}}} mutual fund equities. Harold has $20000 in Manulife Eurorpean Oppurtunities Fund ( Product Code EPL532 ) and {{{Balance of Investment 3}}} of bond funds in his own RRSP. They jointly own $10000 in a 5-year Fixed Deposit, $1000 of which has been investment return on the original capital. They owe $2500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $6110.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100527.34 Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be {{{CALC for Loan Payment Amount}}} You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{Regulatory Typre Investment. Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other $9,000 was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report. }{{Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $150,000 with a down payment of $45,000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and semi-annual compounding. The house has increased $30,000 in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $12,000 at a rate of 5.00% for a 3-year term. This loan is compounded monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $2,000 with no debt. Donna has $20,000 in RRSPs invested in fixed income and $40,000 in Canadian mutual fund equities. Harold has $20,000 in Manulife European Opportunities fund (Product Code EPL532) and $20,000 of bond funds in his own RRSP. They jointly own $10,000 in a 5 year Fixed Deposit, $1,000 of which has been investment return on the original capital. They owe $2,500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $610.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100,527.34 {{{Mortgage Loan Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be $359.65. You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{regulatory type 1 investment Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other {{{CALC Balance-Investment Return on 4}}} was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report.

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Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for £200,000 with a down payment of 0. They were able to secure a five-year mortgage (21-year amortization period) at 6.25% for the balance. The mortgage has monthly payments and Monthly compounding. The house has increased {{{Increase of House's Value}}} in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for £5,000 at a rate of 5.00% for a 3-year term. This loan is compounded Monthly and payable monthly in blended payments. Harold drives a Ford truck valued at £12,000 with no debt. Donna has £10,000 in ISAs invested in Fixed Income and £18,000 in {{{Nation for mutual funds}}} mutual fund equities. Harold has £5,000 in Newton Income Inc. ( Product Code 1178 ) and {{{Balance of Investment 3}}} of bond funds in his own RRSP. They jointly own £10000 in a 5-year Fixed Deposit, $1000 of which has been investment return on the original capital. They owe $2500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $6110.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100527.34 Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be {{{CALC for Loan Payment Amount}}} You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select UK Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-Registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{Regulatory Typre Investment. Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other $9,000 was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report. }{{Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $150,000 with a down payment of $45,000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and semi-annual compounding. The house has increased $30,000 in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $12,000 at a rate of 5.00% for a 3-year term. This loan is compounded monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $2,000 with no debt. Donna has $20,000 in RRSPs invested in fixed income and $40,000 in Canadian mutual fund equities. Harold has $20,000 in Manulife European Opportunities fund (Product Code EPL532) and $20,000 of bond funds in his own RRSP. They jointly own $10,000 in a 5 year Fixed Deposit, $1,000 of which has been investment return on the original capital. They owe $2,500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $610.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100,527.34 {{{Mortgage Loan Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be $359.65. You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-Registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{regulatory type 1 investment Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other {{{CALC Balance-Investment Return on 4}}} was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report.

Russia
{{{Russia Workbook Template}}}

China
{{{China Workbook Template}}}

Malaysia

Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Houen Chun and Houen Feng {{{Last Name}}}'s financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for RM 320,000 with a down payment of RM 140,000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and annual compounding. The house has increased {{{Increase of House's Value}}} in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for RM 8,000 at a rate of 5.00% for a 3-year term. This loan is compounded Monthly and payable monthly in blended payments. Harold drives a Ford truck valued at RM 3,000 with no debt. Donna has RM 80,000 in EPF invested in Fixed Income and RM 160,000 in {{{Nation for mutual funds}}} mutual fund equities. Harold has RM 140,000 in Alliance Islamic Money Market Fund ( Product Code 449720 ) and {{{Balance of Investment 3}}} of bond funds in his own RRSP. They jointly own RM 40,000 in a 5-year Fixed Deposit, $1000 of which has been investment return on the original capital. They owe RM 3,000 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $6110.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100527.34 Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be {{{CALC for Loan Payment Amount}}} You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Houen Chun’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type {{{Investment 4 Name on Assets and Liabilities Screen}}} Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{Regulatory Typre Investment. Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other $9,000 was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report. }{{Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $150,000 with a down payment of $45,000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and semi-annual compounding. The house has increased $30,000 in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $12,000 at a rate of 5.00% for a 3-year term. This loan is compounded monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $2,000 with no debt. Donna has $20,000 in RRSPs invested in fixed income and $40,000 in Canadian mutual fund equities. Harold has $20,000 in Manulife European Opportunities fund (Product Code EPL532) and $20,000 of bond funds in his own RRSP. They jointly own $10,000 in a 5 year Fixed Deposit, $1,000 of which has been investment return on the original capital. They owe $2,500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $610.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100,527.34 {{{Mortgage Loan Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be $359.65. You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type {{{Investment 4 Name on Assets and Liabilities Screen}}} Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{regulatory type 1 investment Click on Save. Click on New Asset under the account to bring up the product selection screen. Select 5-year Fixed Deposit as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other {{{CALC Balance-Investment Return on 4}}} was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report.

Singapore

Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Grace and Alvin Cheng's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $750,000 with a down payment of $50,000. They were able to secure a five-year mortgage (35-year amortization period) at 7.00% for the balance. The mortgage has monthly payments and annual compounding. The house has increased {{{Increase of House's Value}}} in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $28,000 at a rate of 2.50% for a 5-year term. This loan is compounded Monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $13,000 with no debt. Donna has $38,000 in Non CPF invested in bond income and 16,000 USD in {{{Nation for mutual funds}}} mutual fund equities. Harold has $51,000 in Infinity Global Stock Index ( Product Code 432388 ) and {{{Balance of Investment 3}}} of bond funds in his own RRSP. They jointly own $40,000 in a DBS Enhanced Income, $1000 of which has been investment return on the original capital. They owe $4,000 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $4,366.92. The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $610,332 Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be {{{CALC for Loan Payment Amount}}} You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Grace’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Singapore Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-Registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{Regulatory Typre Investment. Click on Save. Click on New Asset under the account to bring up the product selection screen. Select DBS Enhanced Income as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other $9,000 was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report. }{{Net Worth is described as the difference between the total value of all assets and the total value of all liabilities. It is a snapshot of a person’s financial position at a specific point of time. Example Problem One: You are Donna and Harold Woodhaven's financial planner. They would like to have a clearer understanding of their net worth. Two years ago they bought a modest house for $150,000 with a down payment of $45,000. They were able to secure a five-year mortgage (25-year amortization period) at 5.00% for the balance. The mortgage has monthly payments and semi-annual compounding. The house has increased $30,000 in value since they took out their mortgage. Donna drives an automobile valued at $12,000 on which she took out a car loan one year ago for $12,000 at a rate of 5.00% for a 3-year term. This loan is compounded monthly and payable monthly in blended payments. Harold drives a Ford truck valued at $2,000 with no debt. Donna has $20,000 in RRSPs invested in fixed income and $40,000 in Canadian mutual fund equities. Harold has $20,000 in Manulife European Opportunities fund (Product Code EPL532) and $20,000 of bond funds in his own RRSP. They jointly own $10,000 in a 5 year Fixed Deposit, $1,000 of which has been investment return on the original capital. They owe $2,500 in credit card debt. Click here to see a case study on entering the various regulatory types in your clients' Singapore CPF Account, like the Special and Ordinary Accounts and Medisave. Find out how to calculate the zakat due on investments for your Islamic clients. Solution using Detailed Assets: On the Assets and Liabilities screen, click the "+" sign beside the Personal Use account to get started: Click on New Asset under the expanded Personal Use account. Use the Add Custom button. You’ll notice that since you are adding the product to the Personal Use account, the Allocation Breakdown is already complete. Enter ‘Residence’ as the Description and $180,000 (original price + growth in value) into the Market Value field. (See Figure 3.7) Set the ACB (Adjusted Cost Base) field to $150,000. This purchase value of the house represents the capital originally invested into the house, in order to trigger calculations for Capital Gains Tax, as is appropriate for your country. Click Save You must calculate the balance of the mortgage using the Loan Calculator. Click on the Home link on the top menu, and then find the Loan Calculator from the Calculators drop-down menu. Enter the data as follows: Enter the $105,000 principal (value of house minus the $45,000 down payment) in the Amount borrowed field. Enter the Loan Date as two years ago today. (See Figure 3.8) Enter the Renewal Date as the Loan Date plus 5 years, since at the end of the term the interest rate will change. Enter an Interest Rate of 5.00%. Click the drop down menu under the Compounding field and choose Semi-Annual. Set the Amortization to years using the radio buttons to the right and enter 25 for the amortization period. Click the drop down menu under Payment Type and choose the Blended payment option. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment.The result should be $610.69 The balance of the mortgage will be in the top right of the screen, next to Current balance at. The balance of the mortgage should be $100,527.34 {{{Mortgage Loan Return back to the Detailed Assets by returning Home and then using the Client Data Entry link to Assets and Liabilities. Expand the Personal Use account and click Edit beside the Residence. Under the Liability Information enter a description of the mortgage, and the Amount of the mortgage ($100,527.34) as the balance. Save your information. (See Figure 3.9) To add Donna’s vehicle to the Personal Use Account: Add a New Asset to the Personal Use Account. Use the Add Custom feature again. Enter a description and $12,000 as the Market Value. Click Save Access the Loan Calculator from the Home page, and enter the data as follows: Enter the $12,000 principal in the Amount borrowed field. Enter the Loan Date as one year ago today. Enter the Renewal Date as the Loan Date plus 3 years: when the loan ends. Enter an Interest Rate of 5.0%. Click the drop down menu under the Compounding field and choose Monthly. Set the Amortization to years using the radio buttons on the right and enter three (3) for the amortization period. Click the drop down menu under Payment Type and choose Blended Payments. If necessary change the Frequency of Payments to the Monthly option. Click on the Calculate button next to Payment. The result should be $359.65. You will be able to identify the balance of the loan to the right, beside the field Current Balance at. The balance of the car loan should be $8,197.84. Return back to the Detailed Assets screen and expand the Personal Use account. Under the Liability Information enter a description of the car loan. Input the balance of the loan ($8,197.84) in the Amount field. To add Harold’s Ford Truck to the Personal Use Account: Add a New Asset underneath the Personal Use Account. Click on the Add Custom button. Enter a description and $2,000 as the Market Value. Click Save To add the Woodhavens’ credit card debt: Click on New Asset under the Personal Use account to bring up the product selection screen. Choose the Add Custom option. In the Liability Information section, type an appropriate description and $2,500 as the Amount. Click Save To add Donna’s RRSP Account: 1. Click on Edit beside the account Donna’s Registered Investments 2. Under Regulatory Types choose RRSP and set the Ownership to 100% for Donna Woodhaven. 3. You could also change the Description to be more specific to Donna’s RRSP, but this isn’t necessary. 4. Click on Save. 5. Click on New Asset under the RRSP account to bring up the product selection screen. 6. Click on the Add Custom button to add a generic product type. 7. Set the Allocation Breakdown to 100 for Fixed Income and 0 for all other asset classes. 8. Enter an appropriate description and $20,000 into the Market Value field. 9. Click Save 10. Click on New Asset under the new account to bring up the product selection screen. 11. Select Canadian Equities as the Asset Class and Mutual Funds as the Product Type. Click Search. 12. Click on Select beside any product. (See Figure 3.14) Access Tip: if you don’t have access to the live product universe, simply enter appropriate information in a Custom Asset instead. Note: In professional circumstances you would not allocate any product that fit the description given by your client. You would either gather more information, or allocate a generic product. For the purposes of this workbook, adding these products is only to demonstrate how to search for products in different ways, and enter their properties accurately. 13. Enter an appropriate description and $40,000 into the Market Value field. 14. Click Save To add Harold’s Registered Investments: Click on New Asset beside Harold’s Registered Investments to bring up the product selection screen. Set the Description to EPL532, and set the radio option to Product Code Click Search Click on Select beside the only returned product. (See Figure 3.15) Enter an appropriate description and $20,000 into the Market Value field. Click Save Add a New Asset into this account, only select Bonds as the Product Type once in the production selection screen. Click Search. Click on Select beside any product. Enter an appropriate description and $20,000 into the Market Value field. Click Save To add their Joint Fixed Deposit: Click on Edit beside the account Type Non-Registered Enter in an appropriate Description. Set the Ownership to 50% for Harold and 50% for Donna. The Regulatory Type should already be defaulted to {{{regulatory type 1 investment Click on Save. Click on New Asset under the account to bring up the product selection screen. Select DBS Enhanced Income as the Product Type and click Search. Click on Select beside any product. Enter an appropriate description and $10,000 into the Market Value field. Set the {{{Original Value Label}}} field to $9,000: since of the $10,000 balance, $1,000 is capital gains. Therefore, the other {{{CALC Balance-Investment Return on 4}}} was the original invested capital. Click Save After completing all detailed asset entries as shown above, click on the Save button on the summary Assets and Liabilities screen. When completed, all of the detailed accounts and products should resemble the image below. {{{Expanded Assets and Liabilities Image File}}} After completing all detailed asset entries as shown above, in the bottom right hand corner the Net Worth of Donna and Harold Woodhaven is calculated. {{{Collapsed Assets and Liabilities Image File}}} To generate the Net Worth Statement, return to the Home screen and click on the link Reports on the Navigation Panel. Click on the View button beside the Net Worth Statement in order to generate this PDF report.

Hong Kong
{{{Hong Kong Workbook Template}}}

India
{{{India Workbook Template}}}

Caribbean
Jamaica {{{Jamaica Workbook Template}}} Trinidad and Tobago {{{Trinidad and Tobago Workbook Template}}} Barbados {{{Barbados Workbook Template}}} Bermuda {{{Bermuda Workbook Template}}} Bahamas {{{Bahamas Workbook Template}}} Puerto Rico {{{Puerto Rico Workbook Template}}}

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