I thought I had a pretty good handle on Real Asset Income. However, when I implemented Monte Carlo simulation it shot up to an unrealistic value.
Can someone explain what is happening? Are there setting somewhere that I've missed.
Thanks,
Al
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I'd like to augment the question that I posed in the previous post. The question is about the value of Real Asset Income "before" the Monte Carlo simulation is run. For example, after the Enable Monte Carlo Simulation checkbox was checked, I went back to view the value of Real Asset Income. It had jumped from about $35K to over $166K. Envisioning a scenario in which that would be true is beyond my imagination's capability so I'm guessing that I've set something wrong but the only change made to cause this to occur was checking the Enable Monte Carlo Simulation checkbox. Nothing else was changed.
Given this situation, running the simulation and relying on the results does not appear beneficial.
Thanks for any help,
Al
I'm assuming you're talking about "Regular Asset Income"?
If so, the regular asset income is driven from the portfolio you defined for your regular assets, not from the 6% default nominal interest rate you get when you're not using MC.
Without details on your portfolios, I can't really say more, however if you're using assets which have high mean rates of returns, then your regular asset income will also be high since ESPlanner assumes you always get the mean rate of return during it's initial calculations.
Also, if you're using any user defined assets and have not used the asset module tool (Your Asset Module) to calculate the nominal rate of return, relative risk and beta for your user defined assets, then it is possible to get bogus results from the MC in particular. We've addressed detecting that problem in the upcoming release, but without correct values as calculated by this tool, you're skating on thin ice.
If neither of the above obtain, then you should open a support ticket and upload your database along with detailed instructions on how to recreate your problem and we'll look at the problem in more detail as part of the work for the upcoming update.
Best,
Dick Munroe
Thanks, Dick.
I suppose I'm talking about "Regular Asset Income" but the control label on the "Current Savings" tab says "Real Asset Income." That's the value that I'm referring to. I think we're talking about the same thing but please correct me if I'm wrong.
At the moment I'm using predefined assets, some of which do have high "Average Real Returns" so that could explain things.
I submitted a support ticket and it has been assigned to Lowell but I got a message indicating that my upload may not have succeeded. I'll work with him for here on.
Thanks for your input,
Al