Understanding the Cash Reserve Goal
What is a Cash Reserve Goal?
The Cash Reserve Goal in the context of Conquest Planning is a financial target that helps clients maintain a liquid financial buffer to cover unexpected expenses or emergencies. It is designed to provide stability and flexibility in a comprehensive financial plan. The cash reserve ensures that clients have funds available to handle unforeseen financial needs without disrupting long-term investment plans or taking on debt.
Navigating to the Goal
This is the Client's Dashboard which will be displayed at the beginning. The Current Overview in Conquest is your go-to section for reviewing the most recent data on a client’s financial situation. It provides a summary of all key aspects, including accounts, liabilities, goals, and current strategies.
To navigate to the Cash Reserve Goals, the user can select the client's name in the top-left corner, which will take them to the "Current Data - Client" page. From there, the user can scroll down to find multiple goals, with the Cash Reserve Goal located third from the left.
Adding the Goal
The Save to replace dropdown allows for three different kinds of goal calculations:
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Monthly salary
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Monthly expenses
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Custom amount
The salary and expenses combine the shared revenues and expenses of the clients regardless of how the ownerships of the different cash flow items are set up in other cards.
By default, the plan recommends saving the equivalent of 3 months of salary or expenses. This amount can be changed according to clients' needs. You can increase the number of months to change the Goal amount.
Features and Functionality
When a Custom amount is selected from the Save to replace dropdown, the field How many months of salary is disabled, and the Goal amount field can be modified directly.
The Cash reserve goal can be indexed to inflation as well as to any additional yearly percentage. The cash reserve does not grow at a portfolio's growth rate, so the only way to make up for the additional indexed needs is to initially overfund the goal, or to allocate funds annually.
The Allocation section of the Cash reserve goal allows you to fund the goal using whichever mix you see fit between a line of credit and the available bank accounts. There must be a bank account in the plan for it to appear as an option on this page.
If the cash reserve goal is not fully financed, SAM will suggest some strategies to achieve the final amount on the Planning page. Any cash available in the bank accounts that are checked off in the Allocation tab will be considered eligible to finance the goal.