Regular asset balance with upside investing seems to be balance of stock but earns safe asset return
To reproduce what I’m seeing on ESP 2.20.45.
1) Create a new profile
2) Planning Method->Upside Investing
3) On Assets& Savings->Regular Assets
a. Other Assets: $1,000,000
b. Percentage of regular assets investing in stocks: 10%
c. Start converting stocks:
d. Convert all stocks by :
Based on these inputs I expect that I have $900,000 in Safe Assets earning the default Safe Asset Real Return of 2% and $100,000 in stocks earning the Large Cap Stock Return over its distribution. Additionally no stocks will be converted to Safe Assets until the final year of the Profile.
I would expect to see $18,540 of income from the $900,000. I calculated that as $900,000 Safe Asset initial balance converted from first year begin dollars to first year end (Today’s) dollars by multiplying by the inflation factor of 1.03 giving $927,000, then earning the Safe Asset Return of 2%. I expect that calculation to work because a mathematically equivalent one works using the Regular Asset Nominal Return rate instead of the Safe Asset Real Return Rate when the planning method is Economics-Based Planning withOUT Upside Investing.
Based on what I expect noted above, I don’t understand the Regular Assets Report when Upside Investing is used. Running the Profile noted above, the Regular Assets Report shows a Regular Asset Balance of $103,474 for the first year. This leads me to believe the Regular Assets balance are the Stocks, not the Safe Assets, since $103,474 is much closer to the $1,000,000*10% =$100,00 stock initial balance than the $900,000 Safe Asset initial balance. Additionally the Regular Assets Total Income for the first year is $2,060, which is exactly the Stock initial balance $1,000,000*10% converted from first year begin dollars to first year end (Today’s) dollars by multiplying by the inflation factor of 1.03 giving $103,000, then earning the Safe Asset Return of 2%.
So please explain the Regular Asset Report Regular Asset balance and Total Income when Upside Investing is used. Is it supposed to be the Stocks balance, the Safe Assets balance or something else? And is the Total Income supposed to be the income on stocks, Safe Assets, of something else?