Element Score Calculations

  • How do personal debt payments factor into Burn Rate calculation?

    You should include debt payments in the spending number you enter into the system. We will automatically back out personal debt payments when calculating the Burn Rate score. Why did we decide to do it this way? When asking a client how much the spend ...

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  • How should I treat the income/debt payments for a rental property or business?

    Keep the asset and debts included in net worth, but don't include the amount of debt payments in those balance sheet items. Doing this would keep the real estate in the clients net worth without affecting the cash flow. This use case is most common...

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  • Should I include escrow in debt payments?

    Generally, you should exclude escrow from debt payments. Debt Rate should include all principle and interest being paid to lower liabilities, whereas payments of escrow are just part of owning a home regardless of having a mortgage or not and should be ...

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  • Should I incorporate the employer match in Savings Rate?

    Generally, advisors choose to leave the employer match out of a client’s savings contributions, taking the more conservative approach. This is primarily because if that client were to change their place of employment that match could change; however, th...

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  • Why are Er and Br grayed out on my Elements web portal?

    These are grayed out because there isn't currently a report for these Elements, unlike the other Elements. We plan to have reports for these Elements in the future.       

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  • Why are other liability insurance policies (like home and auto) NOT included with Insurance Rate (Ir)?

    Elements only considers umbrella and business liability in the Insurance Rate (Ir) calculation. This is not because P&C insurance is not important, instead we choose to include high-level summaries of the most impactful insurance risks - death, disabili...

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  • Why is my Burn Rate (Br) negative or low?

    It is most likely spending has been entered incorrectly or debt payments have been entered incorrectly.  Here are some notes about Burn Rate: Spending should include all fixed and discretionary expenses, excluding tax payments Be sure to include all pe...

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