ObelixParticipantDecember 2, 2008 at 4:08 pmPost count: 48
ok, the multi-account/plot idea got me thinking. What if there was a way to enter other assets as special accounts with changeable values that could be presented along with all account totals to give a net worth statement for any given day? Obviously some assets fluxuate in value, but changing them as they are revalued would be as easy as changing an entry amount when the actual bill arrives. Plus what if you could link a calendar entry to an asset such as a house or car that you made regular payments on. Each payment that was reconciled out as being paid would revalue that asset with the new amount it was worth. Eric would have to do some extra coding to handle the principle/interest portions as they changed over time, but it should be fairly easy to get close if given the terms of the loan. Plus it could be revalued by hand if it got off by too much.
Hmm I guess any item with a loan attached could actually be setup as a different account in the current version. it wouldn’t be as easy to pull networth off of it tho as it would only show either a large negative (entry shows the debt owed) or a large positive(entry shows the value paid off). I guess you could do both altho each entry would have to be updated separately.
Any thoughts on the general net worth statement in general or this other stuff I spouted off?
Eric PoulinKeymasterDecember 2, 2008 at 10:01 pmPost count: 371
We’ve been having internal discussions about a net worth report for almost a year, so its definitely something we’d like to do.
As you’ve mentioned there are a number of challenges. In addition to what you’ve outlines, here are some of the challenges we’ve identified:
- Because CalendarBudget’s strength is in being able to move into the future (and past) we’d need to be able to calculate the value of assets/investments/liabilities/debts/ etc with time value. Yes, its no problem to get these equations and code them, but the challenge is having you enter that data. The simplicity of CalendarBudget quickly disappears when you have to enter lots of investments and guess at their growth rate.
- For debt payoff, CalendarBudget would be a great tool to calculate exactly when the debt is paid off. Since you could mark on specific days to put a prepayment, we’d be able to accurately tell you when the debt will disappear. I really like this, because generally there is no guessing (except for variable rate loans). For variable rate loans, we’d have to assume its a fixed rate and allow you to make balance corrections and change the rate.
- Do we allow people to enter all their assets? What about a car, for example, which depreciates on a weird curve. People would have to estimate the value of their vehicle and CalendarBudget would then need to figure out some algorithm to depreciate the value over time
In the end, because of these identified challenges, we’ve put the Net Worth report on the back-burner. We still want to do it, and we think these challenges can be overcome to some degree, while still maintaining the simplicity and ease of use that is CalendarBudget.
We’ve toyed with the idea of having a premium version which has some of these more complicated bells an whistles… Still unsure about that. We’ll get closer to a decision about that as we approach the end of the beta.
ObelixParticipantDecember 3, 2008 at 4:51 amPost count: 48
Well maybe it is as simple as letting the user enter a % growth rate. Future stuff is a guess anyways unless you get something with a fixed rate of return or you have some history to back it up. it would be on the user to make that initial guess and you could help them track the history. With investment accounts you could have revaluation entries users would add whenever they got a revaluation on the account(weekly,monthly,yearly,whenever) to set the true value on a specific date. you could then back set the % rate from the last time the account was valued and show it to the user either on the entry bar or just on a chart somewhere. you could also let them set a estimated rate going forward which is what would be used to calculate the daily valuation for each day going forward. The default % carried forward could be the last time period’s actual %. Or you could use radio buttons and let the user select whether they wanted to use the last period’s % or continue to use the estimated % from the previous revaluation entry. this way if there was an investment that was expected to live in the 7% ballpark and it had an unusual spike or downturn but was expected to level back out , the user could select the previous rate instead of the spike rate. And of course you would want to have a user entry option in case they chose none of the above.
Using the above method would play right in to paying off debts both fixed and variable. For a car(or other oddly depreciating items) account you would use two entry types(maybe 3). One for the loan and its rate. One for the actual car value and the depreciation rate the user sets. you could maybe suggest a rate on a simple curve (or maybe just a straight line) and just let the user revaluate whenever they wanted. If the user is really hyper-serious about networth down to the dollar then they need to revaluate everything they have anyways and then run the networth chart. Simple depreciation rates would allow them to get a ballpark figure at a glance and make coding much easier. The third entry type could be for a loan against the account like a lien or a home equity loan. you could do that third entry type against any asset(home,car,401K)
I think investments and assets are viable account types. Users wouldn’t have to use them (the simple path), but could start adding them as they got more interested in truly mapping out their value. i wouldn’t push them too far to the back…
Sorry this got long, hope it makes sense.
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