##### CHOOSING WEALTH® CALCULATOR USER MANUAL

##### INTRODUCTION

In this user manual you will learn about the Choosing Wealth^{®} Calculator layout, data entry, and color-coded keys. Some basic calculation examples are included.

For more examples please see **some tutorials here** or login at **WealthLiteracyInstitute.com** for premium content.

We believe these things are worth repeating.

**Our mission – To promote and enhance your wealth literacy.**

**Our motto – Learn and Do.**

**Our slogan – Wealth Literacy for All.**

**Our vision – That choosing wealth becomes your lifestyle.**

Wealth or being wealthy is defined by you, for you. If you want to be wealthy, then choose it.

##### DISCLAIMER

- The Choosing Wealth
^{®}Calculator only uses what you enter. - It will not reject, correct or analyze what you enter.
- It does not predict the future. Your real-life experiences will likely be different.
- Inaccurate, unreasonable, or unrealistic data or assumptions will lead to inaccurate, unreasonable or unrealistic results.
- Rounding occurs.
- We expressly disclaim all representations and warranties of any kind, whether express or implied, with respect to the Choosing Wealth
^{®}Calculator, including, without limitation, warranties of merchantability and fitness for a particular purpose.

We urge you to use this calculator wisely as a tool to help you make informed wealthy choices.

*Wealth begins in your mind. Invest your wealth. Reward your life.*

##### CALCULATOR LAYOUT

When viewed on a PC or Mac screen the calculator looks like the image below. (Note: The calculator will rotate and size responsively on mobile devices held in portrait or landscape orientations.)

The calculator has three major sections and the display bar. On the left is the numeric keypad that operates like a traditional calculator. In the middle section are the variable keys. The right section contains the calculation keys. The Toggle Help key turns on and off help bubbles. The Results Table key displays a table of yearly values for GREEN and YELLOW Future Amount calculations.

*Choose to conquer ignorance, fear and guilt about money. They fill an empty wallet.*

##### HOW TO ENTER DATA AND CALCULATE RESULTS

The steps for using the Choosing Wealth^{®} Calculator are like those used with a traditional calculator. On the Choosing Wealth^{®} Calculator you enter numbers, then select color-coded variable keys to enter values, and then select calculation keys to calculate results. Depending on your device, you can enter numbers and select color-coded keys with your keyboard, with mouse-clicks, or touch your screen with your finger or stylus/pen device. If you want to change a value in a variable, enter the new numbers (keyboard, click or touch), then select the appropriate variable key, then select the appropriate calculation key to recalculate. You can change variable values and recalculate at will.

*Seek knowledge of wealth as your first step toward a future of wealth.*

##### COLOR CODED KEYS AND WHAT THEY CAN BE USED FOR

The color-coded keys are more than meets the eye. Once you learn and understand the fundamental mechanics and basic uses, you will be able to employ the calculator for a broad array of real life circumstances.

For basic uses, start with what you know and what you want to know. Typically, you will enter a number, then select the appropriate color-coded variable key; then enter another number and select its appropriate color-coded variable key, etc. Finally, you will select the appropriate color-coded calculation key.

Use a single set of color-coded keys to calculate a result. Each color-coded key is explained below.

**Rate of Return (ROR)**

Used with RED, GREEN and BLUE calculations. Enter the assumed annual investment rate of return or annual inflation rate, then select this key. Ex: 6=6%.

**RED keys** – You know a future value and want to know what it would be worth at some number of years __before__ you will receive it.

- Future Amount – Enter the amount of money you know or want in the future, then select this key. Ex: 20000 for a $20,000 balloon payment or 100000 for a $100,000 inheritance.
- Years Until Received – Enter the number of years into the future, then select this key. Ex: 30.
- Current Amount – Select this key to calculate the amount of money to begin with based on values in RED and ROR keys.

**GREEN keys** – You want to know how much you would need to invest to replace two or more years of future income. Or, you want to know how much money invested each year for two or more years would be worth in the future.

- First Year Amount – Enter the amount of money to be invested or withdrawn/paid the first year, then select this key. Ex: 10000=$10,000 annual investment or income from an annuity.
- % Increase Per Year – Enter the annual investment amount increase as a percent of the previous year investment amount, then select this key. Ex: 2=2% annual increase of the annual investment or income.
- Years – Enter the number of years into the future, then select this key. Ex: 30.
- Replacement Amount – Select this key to calculate the amount of money that would need to be invested at the start of year 1 to “replace” the annual amount of income for the years specified based on values in GREEN and ROR keys (this is also known as the Net Present Value (NPV) of specified annual amounts).
- Future Amount – Select this key to calculate the amount of money that would accumulate in the years specified based on values in GREEN and ROR keys.

**BLUE keys** – You know how much money you have available to generate income with and want to know how much you can withdraw in year 1, or you know how much money you want to accumulate in a time period and want to know what the initial investment would be.

- Available or Future Amount – Enter the amount of money you have or want to have, then select this key. Ex. 1000000 for $1,000,000 in retirement funds or a $1,000,000 financial goal.
- % Increase Per Year – Enter the annual withdrawal amount increase or annual investment increase as a percent of the previous year withdrawal or investment amount, then select this key. Ex: 2=2% annual increase of the annual spending or investment.
- Years – Enter the number of years you want your money to last or plan to invest, then select this key. Ex: 25=25 years during retirement or until a goal is achieved.
- Year 1 Spending – Select this key to calculate the amount of money that you can spend in year 1 based on values in BLUE and ROR keys.
- Initial Investment – Select this key to calculate the amount of money that you would need to invest in year 1 of the specified years based on the values in BLUE and ROR keys.

**YELLOW keys** – You know the current value or cost and want to know the future value or cost.

- Current Amount – Enter the desired income amount in today’s dollars or available investment amount, then select this key. Ex: 30000 for annual living expenses or lump sum investment.
- % Increase Per Year – Enter the increase in value or cost as a percent of the previous year, then select this key.

Ex: 2=2% annual increase in investment value or cost of living. - Years – Enter the number of years your money will be invested, or your cost will increase, then select this key. Ex: 15=15 years until retirement or investment maturity.
- Future Amount – Select this key to calculate the future value of a lump sum investment or future income needed to maintain purchasing power based on the values in the YELLOW keys.

**Results Table key** – Click this key to view and print a table of calculated values for GREEN Future Amount and YELLOW Future Amount calculations.

**Toggle Help key** – Click this key to toggle the appearance of help text bubbles when you hover-over a color-coded key.

##### RED KEYS WITH ROR KEY

CALCULATE THE PRESENT VALUE/COST OF A FUTURE INVESTMENT, BENEFIT OR EXPENSE. Example: You want to set up an account for your 2-year-old grandson that will be worth $250,000 when he is 21. You want to know how much you would need to invest now if you assume your investments will earn 7% per year.

1. Enter 250,000, then select | |

2. Enter 19 (years until grandson is 21), then select | |

3. Enter 7, then select | |

4. Select |

The value displayed, $69,127.08, is what you would need to invest now to be worth $250,000 in the specified 19 years, using the assumptions above.

*Plan and act for your future, you’re going to be spending a lot of time there.*

##### GREEN KEYS WITH ROR KEY (Future Amount)

CALCULATE THE FUTURE VALUE OF 2 OR MORE ANNUAL INVESTMENTS (The annual investment can remain fixed each year or increase by a fixed percentage.) Example: You can afford to invest $5,000 per year now, and plan to increase your investments 3% per year for 25 years. You want to know how much your investments would be worth in 25 years if they earned 7% per year.

1. Enter 5,000, your first annual investment amount, then select | |

2. Enter 3, the increase in annual investment amount, then select | |

3. Enter 25, the number of years in your investment plan, then select | |

4. Enter 7, the annual rate of return you assume, then select | |

5. Select |

The value displayed $416,706.84, is what your investments would be worth in the specified 25 years, using the assumptions above.

*Knowing why you want wealth is fundamental to your plan.*

##### GREEN KEYS WITH ROR KEY (Replacement Amount)

CALCULATE THE INVESTMENT NEEDED TO GENERATE/PAY FOR 2 OR MORE YEARS OF FUTURE ANNUAL BENEFITS/EXPENSES (The annual investment can remain fixed each year or increase by a fixed percentage.) Example: When you turn 65 you want income of $80,000 per year from your investments to replace your salary. You want to increase your withdrawals 4% per year. You want to know how much money you would need at 65 if your money earned 6% per year and you wanted it to last for 20 years.

1. Enter 80,000, your first annual withdrawal amount, then select | |

2. Enter 4, the increase in annual withdrawal amount, then select | |

3. Enter 20, the number of years in your withdrawal plan, then select | |

4. Enter 6, the annual rate of return you assume, then select | |

5. Select |

The value displayed, $1,343,221.17, is what you would need to a) withdraw $80,000 in year 1, and b) increase your withdrawals 4% per year for the following 19 years (total 20 years), using the assumptions above.

*Pay yourself first. Control your expenses. Put savings to work.*

##### BLUE KEYS WITH ROR KEY (Year-1 Spending)

CALCULATE THE INITIAL ANNUAL WITHDRAWAL ALLOWED FROM A SPECIFIED INVESTMENT AMOUNT FOR A SPECIFIED NUMBER OF YEARS (This assumes the investment amount is fully depleted in the years specified.) Example: You have $500,000 invested for retirement. You want to know how much you can withdraw your first year of retirement without running out of money. You want to increase your withdrawal 4% per year for 30 years. You assume your investments earn 6% per year.

1. Enter 500,000, your investment, then select | |

2. Enter 4, the increase in annual withdrawal amount, then select | |

3. Enter 20, the number of years in your withdrawal plan, then select | |

4. Enter 6, the annual rate of return you assume, then select | |

5. Select |

The value displayed, $29,779.16, is how much you could withdraw your first year for your funds to last the specified 30 years, using the assumptions above.

*It’s not just wealth accumulation – it’s living a long life of enjoying it, too.*

##### BLUE KEYS WITH ROR (Initial Investment)

CALCULATE THE INITIAL ANNUAL INVESTMENT NEEDED TO ACCUMULATE A SPECIFIED FUTURE AMOUNT Example: You want to accumulate $1 million dollars in 35 years. You want to know how much you would need to invest in the first year if you plan to increase your invested amount 4% per year for 35 years. You assume your investments earn 6% per year.

1. Enter 1,000,000, your investment goal, then select | |

2. Enter 4, the increase in annual investment amount, then select | |

3. Enter 35, the number of years in your accumulation plan, then select | |

4. Enter 6, the annual rate of return you assume, then select | |

5. Select |

The value displayed. $5,347.60, is how much you would need to invest your first year for your funds to be worth $1 million in the specified 35 years, using the assumptions above.

“A penny saved is two pence clear.” Benjamin Franklin “Hints For Those That Would Be Rich,” *Poor Richard’s Almanac*, 1737

##### YELLOW KEYS

CALCULATE THE FUTURE VALUE/COST OF A CURRENT INVESTMENT/EXPENSE Example: You have $100,000 in your 401K plan. You want to know what it will be worth in 20 years if you assume your it increases in value by 6% per year.

1. Enter 100,000, your current investment value, then select | |

2. Enter 6, the increase in annual investment value, then select | |

3. Enter 20, the number of years in your plan, then select | |

4. Select |

The value displayed, $320,713.55, is what your $100,000 would be worth in the specified 20 years, using the assumptions above.

*If you had to choose one, which would it be?* *Look wealthy. Be wealthy.*