Indebtedness question

HI, I REPLY IN CAPS BELOW. BEST, LARRY

I increased the amount of maximum indebtedness to $100,000 in hopes of smoothing out consumption and it did, but...

WE ARE ACTUALLY SMOOTHING YOUR LIVING STANDARD, NOT YOUR CONSUMPTION. IF YOU HAVE KIDS AT HOME, THE PROGRAM WILL TELL YOU TO CONSUME MORE THAN AFTER THEY LEAVE HOME BECAUSE THERE ARE MORE MOUTHS TO FEED. SO LOOK AT THE LIVING STANDARD VALUES IN THE LAST COLUMN IN THE ANNUAL RECOMMENDATIONS REPORT. IF THAT'S NOT A CONSTANT VALUE, YOU AREN'T SETTING THE MAXIMUM INDEBTEDNESS LARGE ENOUGH.

I can't make out how the loan rate for the borrowing is identified or how the interest is being paid back.

THE LOAN RATE IS ASSUMED TO BE THE SAME AS THE RATE OF RETURN YOU CAN EARN ON YOUR REGULAR ASSETS. IF YOU'D HAVE TO BORROW AT A HIGHER RATE, THE WAY TO MODEL THIS IS DISCUSSED BELOW.

For instance, my "RegularAsetts" tab total in year 2026 is ($100,000). I'm assuming EOY and in today's dollars. The following year the savings are set at $3,931 and EOY total is ($96,069). Looks like the savings was used against the principal which was 100,000. However, what was the interest charged on that $100,000 and how was it paid?

The best I can make out is that the interest shows up in "TotalIncome" as negative regular asett income. In year 2027, the regular asett income shown is ($2,913). This would only represent an interest rate of less than 3% if that was the case - so i have my doubts. I'm also suprised that the program does not have an option for setting the interest rate for the "indebtedness" option, unless the loan rate was tied to the nominal rate for regular asetts specefied in the assumptions tab.

IF YOU ARE ASSUMING A 6 PERCENT NOMINAL RETURN ON YOUR REGULAR ASSETS AND A 3 PERCENT INFLATION RATE, THAT'S APPROXIMATELY A 3 PERCENT REAL RATE AT WHICH YOU CAN EARN ASSET INCOME, BUT ALSO A 3 PERCENT REAL RATE THAT THE PROGRAM CHARGES YOU ON BORROWING (I.E., WHEN REGULAR ASSETS ARE NEGATIVE.) IF YOU WANT TO SPECIFY A HIGHER BORROWING RATE, DO THE FOLLOWING. LEAVE MAXIMUM INDEBTNESS AT ZERO. NEXT INCREASE YOUR REGULAR ASSETS IN (REGULAR ASSETS AND SAVING) BY THE $100K THAT I'M ASSUMING YOU WANT TO BORROW. BUT ALSO ENTER THE REPAYMENT OF THE $100K LOAN AS A SPECIAL EXPENSE.