Use their guidelines https://www.moneyreadyapp.ca/forum/topic/128-2023-projection-assumption-guidelines or your own judgement.

I think I get it now.    The versatility of the TM tool was confusing me...        :-)

Long-Term Financial Planning (10+ years): what I'm doing:

• Create holding pots (TFSA-CAN-1, TFSA-CAN-2, RRSP-CAN-1, RRSP-CAN-2, RRSP-USA-1, RRSP-USA-2, LIRA-CAN-2 LIRA-USA-2) 1:me, 2: spouce.
  • My broker (TD Webbroker) breaks down accounts by currency (CAN, USA) AND only provided Asset Allocations by account, thus the extended (from above currency-converged) pot list to allow me to easily enter that info for each TM ACCOUNT
• Click the "Change all investment rates of return at once" button to set the % per year return fields:
  • (Income yield, Dividend yield, Capital appreciation growth rate, Capital distribution yield, Return of Capital distribution yield)
• Set values:
  • CAN Accounts: (Income yield = 3.5% (HISAs & GICs), Dividend yield = 3.20%, Capital appreciation growth rate = 6.20% - 3.20% = 2.80%)
  • USA Accounts: (Income yield = 3.5% (~ same), Dividend yield = 3.20%, Capital appreciation growth rate = 6.50% - 3.20% = 3.30%)

using these inputs from 2023 Projection Assumption Guidelines and Google:

• • • Canada_Equities: 6.20%
    • Canada_Fixed Income: 3.2%
    • US_Equities: 6.50% (Foreign developed market equities - proxy for U.S. equities)
    • US_Fixed Income: 4.5% (Google) - seems high, so using Canada Dividend yield of 3.20% above for USA Accounts.

Short-Term Portfolio Management (<2 years): TBD: later or use Wealthica/Wealthscopr Add-On tools:

• Import detailed holdings via Wealthica 
• Analyse, rebalance, adjust holdings based on generated reports, etc...

Thanks again for great support!

Yes it's quite versatile. Usually, people import their accounts from Wealthica, the asset allocation of the investments is automatically set with information from Funddata at that point. Then they set the expected longer-term rates of return with the "Change all investment rates of return at once" button if there are many investments to go through and then adjust individual investments if they want. Those rates are used in the TIME MACHINE and our own rebalancing tool.

I have been thinking on how to make this even easier and versatile. The first would be to ask for the long-term expected rates before you link Wealthica the first time, save those rates, and use that to set the rates on the first import (and subsequent imports if new investments). A second enhancement would be to add more asset classes for the rates, particularly to consider geography in the "Change all investment rates of return at once" button. I'm surprised that hasn't been requested yet.

>> ask for the long-term expected rates before you link Wealthica the first time, save those rates, and use that to set the rates on the first import (and subsequent imports if new investments) -- Very much like that idea! This would be quite useful in how I visualize/plan to using the TM tool.

Elephant in the Room: How do Financial Planners ($) do all this using the exact investments I give them using their (presumably more sophisticated/expensive) applications? I wonder if they get global % per year return fields and/or exact stock/ETF 10-year projections auto-populated?  🤔

Thanks again. This is all very enlightening!

Traditionally, financial planning software does not consider individual investments, only accounts with portfolios that the planner sets to a certain asset allocation (say 60% stocks/ 40% bonds). Often multiple accounts of the same taxable type are also lumped together as one. The exact portfolio allocation set for those accounts is based on the advisor's perceived risk for the different asset classes (which is presumed to be proportional to their expected return), to match their perceived risk tolerance of the client (usually based on age and other factors). You can use the MoneyReady App that way too.

Very enlightening, thanks.

sincereFish, you have inspired me with this discussion! See the Announcement:

https://www.moneyreadyapp.ca/forum/topic/270-rates-for-short-term-and-long-term-financial-planning

Thank you!

Fantastic!

Elephant in the Room # 2: Was just skimming through the Constructing Tax Efficient Withdrawal Strategies for Retirees with Traditional 401(k)/IRAs, Roth 401(k)/IRAs, and Taxable Accounts paper. Very interesting (I'm a mathie eh), but it got me thinking: Are the algorithms used by other Canadian Financial Planning Software vendors on the market as 'sophisticated'?

Thank you!

For those who may be wondering what you are talking about, that is the paper I used to derive the MoneyReadyApp's Withdrawal Optimizer.

It's hard to answer your question as the MoneyReady App is also by far the most transparent financial planning software in terms of describing its algorithms and methodology publicly and in fair detail.

Thanks.