The Expected Net Return on Capital is an attempt to establish a reasonably achievable total return over a long term (net of taxes and fees) on the aggregate portfolio of household assets that are available to meet a desired cash-flow.
In many ways, it is the household minimum hurdle rate for making new investments. Or, for businesses, it is the cost of invested capital required in order to make a new investment.
It is important to note that "net" refers to the gain after costs associated with the return. "What you have" figures make an assumption that the returns are net of investment related expenses and ongoing taxation in order to use one singular portfolio rate across all investment types, strategies and vehicles.
The Expected Net Return on Capital can be set globally in Target-Map Preferences and is used on all Target-Maps generated.
It can be adjusted manually, live and on the fly during presentations, while discussing a specific Target-Map.
Tags: present, value, discount, rate, conversation, risk, return, long, term, deficit, surplus
12/2019