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********************************************************************** * * * WELCOME TO FINEGRAF * * Ver. 1.1 * * FINEGRAF is a tool to help you better understand your financial * * future. It does this by allowing you to build a model of your * * financial plans, a "FINANCIAL PROFILE", using five easy to under-* * stand "TRANSACTIONS". You can then see the results of your plan * * on a graph. Changes to your model can easily be made which will * * allow you to quickly see the impact they will have on you by * * reviewing the graph. You now have a tool to easily see and under-* * stand the impact that any financial decision will have on your * * financial future. REMEMBER most people reach retirement age with * * less money than they would like to have (BROKE). Prudent action * * now and a tool to easily envision the future result of today's * * actions can help you to avoid that trap. * * * ********************************************************************** ********************************************************************** * * * FINEGRAF is a SHAREWARE PRODUCT * * FINEGRAF is a SHAREWARE product. That means you are welcome to * * copy and use this tool -As Is- without prior consent. If you * * find this tool useful and wish to continue its use, please * * REGISTER with us. The REGISTRATION fee is only $10.00. This * * will allow us to keep you informed of any new enhancements and * * continue to build new products for your use. * * We make no claims about this programs accuracy or it's suit- * * ability for use in your situation * * * * SMADA Enterprises * * Department FINEGRAF * * P O Box 24393 * * Edina, MN 55424 * * * * Thank you very much, we are happy you enjoy FINEGRAF. * * * * If you have any comments or ideas to improve FINEGRAF, we would * * enjoy hearing them. Please mail them to the same address. * * * ********************************************************************** ****************** OPERATION OF FINEGRAF *************************** LOADING AND RUNNING Load the disk in the A: drive and type FINEGRAF. Follow the on screen instructions. If you need more help you can touch the -F1- key and get context sensitive help messages. We suggest that you review this document to get a better understanding of how FINEGRAF works and how to get the most out of it. GENERAL FINEGRAF is an easy to use menu driven program with plenty of online HELP screens. There are 5 basic functions you can work with: CREATE PROFILES (with up to 30 transactions); SAVE PROFILES (up to 60 of them); LOAD PROFILES; MODIFY PROFILES; and GRAPH PROFILES. These options are all available at the MAIN MENU. If you need help or a memory jogger, just touch -F1- in the first position of whatever field you are in, or whatever option your cursor is sitting at. There is also an Info Line that is always displayed at the bottom of the screen, which gives you info about the current screen. INTRODUCTION SCREEN When FINEGRAF is run it will configure itself for either a Color Graphics Adaptor (CGA) with 640x200 pixels, an Enhanced Graphics Adaptor (EGA) with 640x350 pixels or Monochrome Graphics with (720x350). If you touch -F1- at the INTRO SCREEN, you are given the option to manually configure the program. You will be given the same three choices. If FINEGRAF prints your graph in color you may need to use this feature to select option 1 to produce a black and white graph so you can use the PRINT SCREEN function to print a graph. You must have a graphics printer to do this. MAIN MENU Once the FINEGRAF main menu appears you can make the choices you wish. FINEGRAF will tell you if you attempt to do something that may cause you to lose data. At this point you may also touch -F1- for HELP. Upon touching -F1- a message will appear telling you what the function does that the cursor is presently sitting at. Use the -ARROW- keys to move the cursor to the option that you desire then touch the -ENTER- key to load the module. LOAD PROFILE Choosing the LOAD option will cause the program to display upon the screen the names of PROFILES you have previously SAVED. For your interest we have SAVED several sample PROFILES for your review, to get a better idea how FINEGRAF works. Move the cursor with the -ARROW- keys until it is positioned over the PROFILE you wish to load and touch -ENTER-. That profile will be loaded and you will be returned to the main menu with the cursor positioned at the BUILD GRAPH option. You can also DELETE any PROFILES that you no longer need, by positioning the cursor and then touching -DEL-. You will be warned that you are about to DELETE a PROFILE. You may touch -DEL- again to DELETE it or -ESC- to avoid DELETEing the PROFILE. CREATE PROFILE Choosing the CREATE option will cause the program to load several blank screens upon which you can enter information about the new PROFILE that you wish to create. These screens are: HEADER SCREEN and TRANSACTION SCREEN. HEADER SCREEN The first screen is the HEADER screen. It asks questions that help identify this PROFILE from all other PROFILES. You will also be asked to give the range of years that you wish to graph. The maximum range is 100 years, but choose the smallest range that meets your needs, because the more years in the range, the longer it takes to calculate the results. Touching -F1- in the first position of any of the four fields will produce a HELP screen for that field. You may exit from the HEADER screen early by typing QUIT in the NAME field. When you have answered the four questions a new screen will appear automatically that will allow you to build the individual TRANSACTIONS (up to 30), that will create the financial PROFILE. NOTE: Maximum of 5 in this version of FINEGRAF TRANSACTION SCREEN same as the UPDATE PROFILE screen There are 5 TRANSACTIONS that can be used to build the PROFILE. To start each transaction make sure the cursor is in the first position of the TYPE field. Touching -F1- in this position will provide a HELP screen, with information about the options in the TYPE field. The five transactions are: S = SALARY; E = EXPENSE; SP = SAVINGS PLAN; CI = CURRENT INVESTMENT; T = TAXES. Type only the initials and touch the -ENTER- key to cause the program to load the format for the TRANSACTION that you wish to enter. Enter the infor- mation in the fields as required. Touching -F1- in the first position of each field will produce a HELP screen to assist you in entering the correct information. Use the -ARROW- keys to move from transaction to transaction to edit or change your transactions. This allows you to easily modify your PROFILE for modeling purposes. When you are done touch -ENTER- in the first position of the TYPE field, or if you have a long PROFILE touch -ESC- in any TYPE field. When you exit from the BUILD module you will be at the MAIN MENU with the cursor positioned at the BUILD GRAPH option. BUILD GRAPH Choosing the BUILD GRAPH option will bring you to the partially built GRAPH screen with 4 options to choose from. As before use the -ARROW- keys to move the cursor, then touch -ENTER-. The four options are: ADJUST $ LIMIT; DISPLAY $ AMOUNT; BUILD GRAPH; MAIN MENU. ADJUST $ LIMIT Choosing the ADJUST $ LIMIT option will give you 4 options for the maximum dollar amount to be shown on the graph. In this way you can tailor the graph window to suit your needs. Use the -ARROW- keys to move the cursor and touch -ENTER- at your choice of dollar limit. That will bring you back to the original 4 BUILD GRAPH screen choices. DISPLAY DETAIL Choosing DISPLAY DETAIL will allow you to see the actual dollar amounts of the graph lines for a specific year. You will be asked to ENTER A YEAR. This can be any year that is presently graphed on the screen. You may view two years at a a time. For a detailed explanation of the information presented see the NOTES at the end of this review. CREATE A GRAPH Choosing CREATE A GRAPH will give you the question ENTER START YEAR. This can be any year between the START YEAR and the ENDING YEAR in the PROFILE header. This will decide which year will be the first year to appear in the graph window. If you are graphing a time span bigger than 36 years you can move the window up and down the time span to get a 36 year picture any place along the way. Enter the year you choose and immediately FINEGRAF will start to build you a picture of the PROFILE you have created. The SALARY line is the result of your salary transactions. The EXPENSE line is the result of your expense transactions. The INCOME line is income from interest. The NET WORTH line is the resulting net worth of your PROFILE at that point in time. The goal, of course, is to never have the NET WORTH line move below the ZERO line. Once the graph is built the 4 choices reappear. You may now choose MAIN MENU and return to the MAIN MENU to modify your PROFILE and then graph it again. In this way you can play with different options and easily see what the results are. MAIN MENU Choosing MAIN MENU will take you back to the MAIN MENU without losing any data in the PROFILE. This allows you to easily move back and forth between the BUILD GRAPH and the UPDATE PROFILE screen so that you can make changes and closely review your results SAVE PROFILE When you are done with FINEGRAF you can chose the SAVE option. This will save your current PROFILE so that you can use it later. If you forget to SAVE your PROFILE, FINEGRAF will remind you when you attempt to EXIT to DOS. You will be given a choice to SAVE your PROFILE or not. You are not required to SAVE your altered FINANCIAL PROFILE. This allows you to play with a current FINANCIAL MODEL without destroying it and having to rebuild it. NOTE: Not functional in this release UPDATE PROFILE See TRANSACTION SCREEN above. EXIT This choice will leave FINEGRAF and take you DOS. ******************* DEMONSTRATION EXAMPLE ************************* Upon loading FINEGRAF you will find yourself in the MAIN MENU. Your cursor is at the LOAD PROFILE option. Touch the -ENTER- key and a number of file names will appear. Move the cursor to EXAMPLE1 and touch -ENTER-. The MAIN MENU will re-appear with your cursor positioned at the BUILD GRAPH option. Move the cursor to the UPDATE PROFILE option and touch -ENTER-. You will see a one line transaction with the title SALARY. SALARY TRANSACTION Notice that the salary starts in 1988 and runs 20 years to 2008. A $30,000 salary with an annual increase of 3% on average is assumed. Now exit from the UPDATE FILE screen to the MAIN MENU and choose the BUILD GRAPH option. Sometimes this processing can take a long time depending on how big the TRANSACTION is. So the PROCESSING GAUGE tells us how we are doing. When you arrive at the graph screen choose the CREATE A GRAPH option. You will be asked for a START YEAR, enter 1985. You will see that the SALARY line starts at $30,000 in 1988 and increases 3% every year until 2008 when it stops. The final salary is over $50,000., WOW! You will also see that the NET WORTH line increases every year until the SALARY stops. That is because we have shown income without any expense. EXPENSE TRANSACTION Now return to the MAIN MENU and choose the LOAD FILE option again. This time choose EXAMPLE2, and find your way to the UPDATE PROFILE screen again. You will find the original SALARY transaction but in addition you will see an expense $28,000 that starts in 1988 and runs until 2035. For this example we use one expense item but it could be broken down into: living expense; mortgage payment; taxes; college for the kids; the list (unfortunately) is endless, all starting and stopping at different years. The expense grows at an average rate of 3.0%. This could be a result of inflation or developing more expensive tastes. Now move to the BUILD GRAPH screen, touch CREATE A GRAPH and enter 1985 again when asked. You will now see three lines. The original SALARY line plus a new EXPENSE line, that reflects the transaction we just reviewed. However, you will notice that the NET WORTH line has changed. It now reflects an annual increase of only about $2,000 a year. Also notice that the line eventually falls below zero at about year 2009 (we ran out of money). Depending on how old we are we may need to update our retirement plans. After reviewing the graph return to the LOAD PROFILE menu and choose EXAMPLE3. SAVINGS PLAN TRANSACTION After choosing EXAMPLE3, return to the UPDATE PROFILE screen. We now find a SAVINGS PLAN transaction has been added to the FINANCIAL PROFILE. We do this because in the above EXPENSE transaction we did not spend all the money we made, but then again we did not invest it. In a sense we kept it in our checking account. The SAVINGS PLAN transaction puts $2,000 in some investment or other until the year that the SALARY stops, 2008. The amount added does not change (however, it could), but an interest rate of 8.5% is projected. The interest is planned to continue until 2035, which is the last year of the period being graphed, unless all the money is spent first. Now move to the BUILD GRAPH screen, select CREATE A GRAPH and enter 1985 when asked. You will notice several things. The NET WORTH line has changed, due to interest being calculated for the $2,000 being added each year. We also see a little bit of an INTEREST line which also indicates that interest is earned on the money in the SAVINGS PLAN. Also notice that the EXPENSE line has changed. Since we are putting some money into an investment we have incurred an expense, in a sense we are spending more money. This shows up as an increase in the EXPENSE line. The SALARY line and the EXPENSE line now are now mirror images of each other. CURRENT INVESTMENT TRANSACTION Again, return to the LOAD FILE screen and this time select EXAMPLE4. Now display this transaction on the UPDATE PROFILE screen. You will find a CURRENT INVESTMENT transaction has been added to the FINANCIAL PROFILE that we have been building. This represents an amount of money that we already have. It could be savings or the equity in your house. This could be broken up into several types of investments, but to keep things simple we have used only one. Our example shows a "nest egg" of $25,000, growing at a rate of 10.0%. It is planned to continue to earn this rate until 2035 or until it is all spent. Now return to the BUILD GRAPH option and again enter 1985 when asked. Notice that there is now a higher INTEREST line on the graph. This shows MORE interest earned. Note that the NET WORTH line now starts at a higher point on the graph, and grows a little more quickly than before. It also takes longer to cross the zero line. However, depending on our age we may still run out of money too soon. Here is where the modeling process becomes exciting (and sometimes scary). TAX TRANSACTION Now, return to the LOAD FILE screen and choose EXAMPLE5 and then display this transaction on the UPDATE PROFILE screen. We have made three changes. We reduced the living expenses by $6,000, this is the estimated tax at a rate of 20%. We have also indicated that the SALARY, SAVINGS PLAN, and CURRENT INVESTMENT are taxable. You will also notice a TAX transaction has been added which uses a general rate of 20%. This is a judgment call, depending on who you voted for in the last election. Graphing this PROFILE will show minor changes in the chart. If you call going broke two years earlier minor. However, a TAX line now appears on the chart. This allows a more detailed handling of taxes and will show the effect of taxes better on the graph. CHANGING THE MODEL We have left two obvious consideration out of this example. Lets play with the model a little bit and put them in. First, we have overlooked Social Security and employer retirement benefits. Lets add a retirement pension of $15,000 a year, which will start when the SALARY stops in 2008. To do this we will use another SALARY transaction and name it Social Security. Lets also change the EXPENSE transaction to reflect a house payment of $8,000 a year, that is paid off in the year 2005. To accomplish this we will reduce the EXPENSE transaction by $8,000. and create another EXPENSE transaction of $8,000 that starts in 1988 and runs until the year 2005. To view the results of these changes LOAD EXAMPLE6 and look at it in the update screen. Then GRAPH it and see the results. WOW! big difference, we may be able to retire after all. But be careful, notice that the NET WORTH value starts to fall in the year 2031. Also we haven't sent the kids to college for 4 years at 10 grand a year (Try it, it will knock your socks off). Well now you have a feel of how FINEGRAF works and what it can show you. Now create your own model and play with it. We hope that it helps you plan your financial future. ********************** END OF DEMONSTRATION EXAMPLE ************************* TRANSACTION DEFINITION The following is a discussion of the five transaction types. SALARY TRANSACTION Is a transaction to represent income. It could be Salary, Pension or any regular income source. TYPE - Enter the letter "S" and touch enter NAME - Any words that describe this salary transaction. It could be the name of your employer, "Social Security" or "Pension". START YEAR - This is the year that this income is planned to start. If it is a salary it would usually be the current year. If it is a pension it would be the year the pension starts, usually the year after you retire. STOP YEAR - This is the year that this income is planned to stop. If it is a salary it would usually be the year that you retire. If it is a pension, it could run until the end of the graph, or until the pension might otherwise stop. ANNUAL - This is the annual amount of income that you estimate you will receive from this source. It is reflected in the SALARY line on the graph. FINEGRAF assumes 12 equal monthly amounts. ANNUAL GROWTH - This is the estimated percentage increase that you think will occur each year. TAXED - This indicates if the income is taxed or not. "Y" is yes it is taxed, "N" is no it is not taxed. The tax rate is determined in the TAX transaction. EXPENSE TRANSACTION This represents any expense that you may have. It could be living expenses, mortgage payments or car payments. TYPE - Enter the letter "E" and touch enter NAME - Any words that describe this expense transaction. It could be "Living Expense", "Mortgage Payment", "Taxes", "College" or "Ex Spouse". The list is endless. START YEAR - This is the year that this expense is planned to start. If it is a living expense it would usually be the current year. If it is tuition it would be the year the tuition starts. STOP YEAR - This is the year that this expense is planned to stop. If it is living expense it would probably be the year that you retire and you expect your expenses to be reduced (You would build another EXPENSE transaction starting the next year to reflect the new expense rate). If it is tuition it would be the year your student finally graduates. ANNUAL - This is the annual amount of expense that you estimate you will pay. It is reflected in the EXPENSE line on the graph. This amount is subtracted from the SALARY amount. When SALARY is less then EXPENSE, the EXPENSE amount is subtracted from CHECKB first, then SAVINGS PLAN or CURRENT INVESTMENTS, thereby reducing your NET WORTH. FINEGRAF assumes 12 equal monthly amounts. ANNUAL GROWTH - This is the estimated percentage increase for this EXPENSE that you think will occur each year. SAVINGS PLAN This transaction describes a program that you are contributing money to. It could be a company stock program or an investment program of your own. TYPE - Enter the letters "SP" and touch enter. NAME - Any words that describe this savings plan transaction. It could be the name of your mutual fund, "Company Stock Plan" or "Bank Account". START YEAR - This is the year that contributions to this savings plan are expected to start. If it is currently being done it would usually be the year the graph starts. If it is planned for the future it would be that year. STOP YEAR - This is the year that contributions to this savings plan are expected to stop. If it is a Company Stock Plan it would usually be the year that you retire. ANNUAL - This is the annual amount that you estimate you will contribute each year. The program assumes this annual amount is deposited in 12 equal monthly installments. This amount is added to WORTH and to EXPENS. ANN. INCR - This is the estimated percentage increase that you think will occur each year. TAXED - This indicates if the savings plan interest is taxed or not. "Y" is yes it is taxed, "N" is no it is not taxed. The tax rate is determined in the TAX transaction. INT. - This is the rate of interest you estimate you will receive on the balance in this account. Interest is calculated monthly. STOP INT. - This is the year that you estimate interest will stop being accrued on this account. Interest will be calculated until this year or until there is no longer any money in the account. Usually the last year graphed will be used here. CURRENT INVESTMENT This transaction describes an amount of money that you already have in some investment, savings account or it could be the equity in your home. It is the "nest egg" you have accrued so far. TYPE - Enter the letters "CI" and touch enter. NAME - Any words that describe this current investment transaction. It could be the name of your mutual fund, "Nest Egg" or "Bank Account". START YEAR - This is the year that this investment is expected to be received. It will usually be the year the current year, if it is planned for the future (an inheritance) it would be that year. STOP YEAR - This is the year that interest on this investment is expected to stop. This would normally be the last year being graphed. Interest will be calculated until this year is reached or the balance is zero. AMOUNT - This is the amount that you have in this account at the start. INTEREST RATE - This is the amount of interest you estimate you will receive on the balance in this account. Interest is calculated monthly. TAXED - This indicates if the principle is taxed or not. "Y" is yes it is taxed, "N" is no it is not taxed, "I" means interest only is taxed. The tax rate is determined in the TAX transaction. TAXES This transaction loads a tax rate to be used by the other transactions, in calculating taxes. This will only be used by those transactions that have a "Y" or "I" in the TAXED field. While more than one TAX transaction may be entered, they can not be stacked on top of each other. I.E. for years where a TAXES transaction overlaps another, the percentage of tax will be that specified by the transaction that was entered later in the sequence. TYPE - Enter a "T" and touch enter. NAME - Any words that describe this transaction. START YEAR - This is the year that you want this tax rate to start to apply. You may want different rates at different times in the graph. Remember, you may have different transactions but their years can't overlap. STOP YEAR - This is the year that you want this tax rate to stop being effective. TAX RATE - This is the percentage amount of taxes that you want to show on all income that is identified as TAXED. ************************* NOTES ********************************************* NOTE 1 - You can model a profile all you want and as long as you don't SAVE it, you will not change the original that is on the disk. NOTE 2 - Even though all dollar values are entered in annual amounts, the program assumes equal monthly values for purposes of adding to or withdrawing from an account. All interest is calculated on a monthly basis as well. NOTE 3 - Interest calculated on a SAVINGS PLAN or CURRENT INVESTMENT is credited to that account. Any SALARY that is not spent on an EXPENSE or a SAVINGS PLAN is left in the check book(CHECKB). This money does not accrue interest but is included in the NET WORTH. This check book balance is shown in the CHECKB amount in the DISPLAY $ AMOUNT on the BUILD GRAPH screen. NOTE 5 - Whenever EXPENSES are greater than SALARY the difference is subtracted from various accounts. Money is taken from the check book balance first(CHECKB). Any remaining negative balance is taken from a SAVINGS PLAN or CURRENT INVESTMENT as needed in the order that they appear on the TRANSACTION SCREEN. This is done at an assumed equal monthly rate and interest is calculated on remaining balances until it is spent. NOTE 6 - DISPLAY DETAIL WORTH - This is the total of the SALARY, EXPENS, INT., TAXES and INVEST items in the current year and the WORTH field from the previous year. It is the amount represented by the NET WORTH line on the graph. Your goal "Should you choose to accept it", is to keep this amount above the line. SALARY - The is the dollar amount represented by the SALARY line on the graph and is the total of the SALARY transactions in the profile. EXPENSE - This is the dollar amount of the EXPENSE line on the graph and represents the total EXPENSE transactions, and the ANNUAL fields in the SAVINGS PLAN transaction. CHECKB - This represents the SALARY amount that is not spent, saved(SP) or TAXed. It is the difference between SALARY, EXPENSE and TAXES. Therefore it is still in the checkbook. This money is always spent first when expenses become more than salary. No interest is calculated on this money. This amount should be kept as small as possible. It is accounted for in the WORTH field INT. - This is the dollar amount that is received as interest from various investments. It is represented by the INTEREST line on the graph. TAXES - This is the amount of money that is taken out of income or interest as tax when a transaction is TAXED and a TAX transaction is entered. This amount is NOT in the EXPENSE field and is represented in the TAXES line on the graph. INVEST - This represents money invested through a SAVINGS PLAN(SP) or CURRENT INVESTMENT(CI). This money is included in WORTH. NOTE 7 - PRINTING THE GRAPH You can print the graph using the "print screen" key if you have a graphics printer. Be sure that you load the proper codes using the "GRAPHICS" command from DOS before you start FINEGRAF. If you have an Enhanced Color Monitor (FINEGRAF prints the graph in color) you may have to manually configure FINEGRAF for a black and white graph. (at the INTRO screen touch -F1- and then select 1) END