 Personal finance practice problem using OneNote. Life insurance using personal financial statements. Prepare to get financially fit by practicing personal finance. You're not required to, but if you have access to OneNote, would like to follow along when the icon on the left-hand side, practice problems tab and the 10140 life insurance using personal financial statements tab. Also take a look at the immersive reader tool or practice problems are typically the text area to with the same name, same number, but with transcripts, transcripts that can be translated into multiple languages, either listened to or read into them. Informations on the left-hand side, we're trying to calculate how much life insurance we may need with a more comprehensive practice problem, noting that in prior presentations, we looked at online life insurance calculation tools often offered by life insurance companies. We saw that they ask for different data input, often have different data output, which is not unusual given the fact that we can approach this question from many different angles. What we would like to do is get an understanding of the tools in order to calculate, which we've looked at in prior presentations and then apply those tools to our particular circumstance, possibly using then the online calculators to help give us an idea that we are in, in essence, the bull park. So information on the left-hand side, we're gonna assume we have a couple with five kids, funeral expenses at the 8,500, nanny cost 3,600, which we're gonna tack on if someone, if the primary wage earner was to die. We've got the life insurance for the higher earning spouse. So we're imagining a couple here, the higher earning spouse, we're trying to think about what if that individual dies. We've got information that we're gonna construct the financial statements from, balance sheet income statement, including assets, liabilities, income, and then the income statement, information, income and expenses. So let's keep it there for now. First of all, we might first wanna construct our personal financial statement that would make it easier for us to make a more informed calculation on terms of what our needs would be for the life insurance calculation. The personal financial statements include a balance sheet and an income statement. You might do this by getting say, software for example, such as a QuickBooks, which is a counting software or any other kind of accounting software, which could help you to pull this information, say in from the bank, using bank feeds, but it will not give you the ending balance in QuickBooks. It'll give you the transactions in order to get to the ending balance, the balance sheet basically being the ending balances as of a point in time. Income statement then being the activity. You can also use other software, such as for example, a personal capital has a software that pulls in the ending balances, which you could use to construct a balance sheet, but it's not as useful to construct then the income statement. So keeping that in mind, let's think about the balance sheet. We might wanna break out our assets. We could also get this information from just basically pulling our financial statements together, checking account. You could get this from a personal capital software, for example, or from by actually creating it using QuickBooks and checking it to the ending balance, same with the savings account because it's from a financial institution, same with an emergency fund. These are the more liquid type of things that you can tap into if necessary. The total current assets then are gonna be the 39,500. And I'm gonna go through this pretty quickly because we've seen the creation of financial statements in the past. So I'm gonna just do this, go through this fairly quick. Other assets could be like an IRA. We might put that in separate because an IRA or a pension plan are gonna be things that they might not have access to as readily when we die. And note, that's another thing that you could consider because if you have a substantial amount in an IRA or a 401K plan, it's possible that if they're in your IRA or 401K plan and you were the one that died, they could have access to it. So you wanna take into, or is it in the other person's IRA or 401K plan, do they have access to it? And is that important that they get access at the point of death in your kind of calculation? And there could be tax consequences just taken to consider tax consequences. So fixed assets then are gonna be things like the home. Now, notice something like the home is a big asset, but it's not something that you can pull in from like just a financial institution because the value of the home might say hopefully increase over time. So you'd have to kind of get an estimate of what the value of the home would be. Same with a car, which you may or may not put on kind of the balance sheet in terms of because it's something that will depreciate over time, that's gonna go up over time. But we'll put those two cars in place. The total fixed assets then are gonna be the 235, which are these three. Our total assets include the current assets, the other assets and the fixed assets at the 298.5 on the liability side, things that we owe. Current liabilities, credit card, car loans, these are things that we're gonna say are gonna be due fairly soon. Usually within a year, for example, at the 11.3, we need the current cash flow in order to pay those things off. And then we've got the more long-term liabilities, which is typically the mortgage. Noting, however, that the mortgage is something we pay off monthly. Therefore, a year's worth of this mortgage is still something that you would need cash flow for in the current time period. So if we then take the total liabilities are at the 161.3, that gives us the net assets, which if we were constructing the balance sheet by just taking your assets minus the liabilities, we would be saying, okay, if I have 298.5 of assets minus the liabilities of 161.3, that means the net assets are at the 137.2. If you were to do this using accounting software, then it would record every transaction in balance, and we would see it as assets equal liabilities plus equity or net assets, the 298.5 and the 298.5 here. Now, if we just look at the balance sheet, notice again, a lot of this you can get from like a personal capital software that will pull the ending balances in from the financial institution. That includes the credit card, possibly the car loan, and most likely the mortgage. The thing that it will not pull in are things like the fixed assets, the home value, the being the big one. Now, when I look at this net assets, then that's kind of our net value. And although we're looking pretty good here, we've got the net assets, notice a large part of it is being eaten up by the home, and the home is not liquid. So when we die, then even though we have a net asset positive, we've got this big fixed asset, which we can't really use to pay off the current liabilities. So oftentimes we want to be comparing then the more liquid assets, the 39.5 here for example, for sure, and possibly if they have access to the thing under the IRA, the 24,000, 24,000 to the liabilities that are gonna be coming due, which would be the 11.3 for sure. And yearly speaking, you'd have to take each year's worth of the mortgage, which would be done, don't do on a year by year basis. The other way we can look at this is we might say, well, if I was to die, I'd like to be able to have them just pay off or wipe out the 161.300, the full liabilities or possibly just pay off the mortgage. And then see how much they would need after the liabilities were paid off. So those are a couple of approaches we might take when we try to construct how much life insurance we need. Do we want to calculate the imagining they're just gonna wipe out the liabilities and then how much would they need to cover the current expenses and so on. So we'll use that in future calculations. Let's look at the income statement. The income statement's important because that'll show us how much we need from a cost perspective. So we could use on an income statement, let's calculate it, we'll do it a couple of different ways. Note that if you use accounting software, you can't use like an easy software like personal capital or something to just make your income statement from the ending balances because it's a timing statement and therefore the QuickBooks or something like that is good to make the income statement or you can try to pull in from your checking account. If you pull in from the checking account or use something like QuickBooks to construct from the checking account, the income side is often a little confusing because the amount that's gonna hit the income statement will be the net amount, not the gross amount. So you gotta take into consideration the withholdings that we're taking out at least for taxes. So we can do it a couple of different ways. Let's look at this income statement using the gross amount, the full amount that would be shown on a pay stub minus the expenses which we might take from say our checking account that we spent but categorizing not by who we paid but what we paid for such as property taxes, homeowners insurance, utilities, food, gas maintenance, entertainment and so on giving us the total expenses. If I take then the gross income minus those expenses we get the net income before taxes and withholdings and then I'm gonna take out the taxes and withholdings because I put this amount up here at gross. The taxes and withholdings are my gross income 25,000 plus the 60,000 minus the 21,250 minus the 51,000. So that's gonna be the 12,750 which could be taxes. It could also include benefits. Those things complicate the calculation of your income statement because they're pulled out. They never hit the checking account. So you can't really account for them as easily by just using your cash basis method or connecting to the bank, right? Because it got taken out by the employer or if you use your cash basis method, more of a cash basis method, you're connected to the bank in something like QuickBooks and you don't record the gross amount you record the net amount up top. You might record it this way because it would be easier to do and that would be the 72,250 and then the expenses would look similar but now I'm gonna add the cash flow expenses including the mortgage. Now the mortgage usually on a cruel accounting system you would record the interest portion as an expense and then the principal portion would decrease the loan balance up here. Your loan balance would be going down. So that complicates the calculation if you tie into something like a QuickBooks and tie into the bank account but let's do the cash basis here and we'll use either one of these when we do our actual calculation for our life insurance. We'll see how that kind of works. Property taxes still, homeowners insurance. We've got the utilities, the food, the gas and then the credit card and the loan payments. Again, these two right here because they're debts that we're paying off may be something that we would be that we would be putting on the interest only here if it was an accrual basis and then we would be paying down the debt. So that would be complex. So we're gonna assume we're paying these off for more of a cash flow basis. So here's what we have on a cash flow basis. And so the difference then is the 72, 250 minus the 41, 220. So we've got the 31, 30. So now you can see these two are different. We could say, okay, if I was to take the difference between those two, it's 19, 380. If I wanted to reconcile the difference, it's the mortgage here that we put in on the cash flow. It's the credit card that we added and it's the car loan. So that's basically the difference between these two on kind of a cash flow. Now the reason this is gonna be useful is because you might first think, well, I can put my life insurance together by saying, I'm gonna first pay off the liabilities if I were to die and then think about how much expenses, maybe like using this 21, 840 as a baseline that they would need after that point in time after I pay off the liabilities. Or I might say I'm gonna keep the liabilities on the books and see how much they need from a cash flow basis, including the yearly mortgage payments and the credit card, for example, and use that 41, 220. So those are two ways you can try to construct or think about how you might put together how much you might need. Okay, so now we could do a couple of methods for the life insurance calculation. So first off, let's say, and notice what we wanna know here is that you could look at this from a couple different categories. So the first category would be how much, if I was to die, how much would the spouse need and how long would they need it in order to meet the cash flow obligations? So we might say, well, we might base it on my income. So let's say that the person whose dies income was the 60,000, we don't have to use that because we might use an extents method. We might use the 21, 8, for example, or the 41, 220, but let's base it on the income, which hopefully is higher than what is actually needed for our practice problem, noting that, again, you could use those other kind of methods. And then I'm gonna multiply that times the number of years. The number of years as we've seen in the past might be how many years until I get to retirement, how many years the spouse reaches retirement, how many years the kids get until they reach 18, for example. So there's, or you can use a heuristic of seven or 10, for example, if I multiply that out, I'm getting 600,000. So like I say, this is one static example we could get more complicated because we might say that we get closer to that 10 and take into consideration time value of money, which we'll see shortly. So this is the first kind of just general quick estimate. So we could have estimates about daily living costs for dependents, so we could then also have the college tuition, which is a goal-oriented thing. So we might calculate that, and we might basically just calculate it based on the current cost of college. We might say, well, the cost of college is currently at the 35, and if I was to die, hopefully they can invest the money and get revenue on it in order to pay for the college in the future. Now, we might do a more complicated goal-oriented calculation and use time value of money, which we'll do shortly. We might add other costs after we were to die, such as if they had to add nanny costs, and this might be something that you would include up top, like as a yearly cost, they're gonna need another 3,600 until the kid is so old or something like that, but we're gonna put it as a lump sum here for now, and then retirement goal. So this is another kind of goal-oriented one. You might be saying college tuition, maybe you wanna help with the spouses' retirement in some way, so you put whatever we think the goal is for that as well, and again, we might get more complicated with time value of money calculations in order to reach those goals. How much would they need to reach them? We'll do that shortly. So the total added cost, we're gonna say are the 5,38, 600. Notice that these two calculations act differently. That's why we have to kind of put them in different categories. And then we might also have an emergency fund. So this is like a one-time cost. So we might say that if we have yearly expenses and the nanny costs, total yearly expenses, we're gonna take half of that and say that we would like to have an emergency fund of 22,410. So that's different than the cash flow up top. It's not a goal-oriented thing either. It's a one-time kind of expense that we would like to have as well. So that's why it's gonna be calculated differently. And then we also have the other one-time expense, 8,500 of the funeral costs, which would be the cost if we were to die. So then the estimated family needs, we're gonna add this up, the 600, the 5,386, the 22,410, the 8,005 to get to the 1,169,510. Now that's all the needs that we've calculated, but we already have assets. So we can say, let's take a look at what we currently have. We've got the checking account. We've got the savings account. We've got the emergency fund. Those are gonna be our liquid assets that they can use to meet those kind of needs. And so those are the 39. And then you might take into consideration the IRA, depending on whether they have access to it and whether you think it's relevant to have access to it at that point or possibly when the spouse reaches retirement, depending on whose IRA or retirement account it is. So I'm gonna add that in here. So that's gonna be our liquid assets that they can use to meet these needs. I'm gonna subtract that out then and we get to the 1,10610. Now we do this in more detail in Excel if you wanna do it in Excel. Another method you might use, you might say, okay, let's start off by saying I would like to basically pay off the liabilities. So I've got the 161,350,300 in the liabilities up top. So right there, I'd like to, if I die, just pay that thing off up top and let's start there. And I currently have in the liquid assets, the 63.5, which is the 39.5 and the 24, assuming they have access to that at the point of debt to do it. So that means just to wipe out the liabilities, we would need 97.800. So we can use that as the starting point possibly instead of trying to figure out how much cash flow they would need in order to pay off those liabilities in accordance with the normal, whatever our agreement is at that point. So then we could say the yearly cash flow needs then. Current yearly cash flow, we're gonna take the 24.8. The reason I'm taking that now is we're gonna use a needs-based approach now and say if they paid off the liabilities, then I'm not taking the 24.220. I'm not taking my personal income. I'm taking the 21.840, not including the mortgage payments, cash flows that are needed, right? Because I'm paying off the mortgage. So we could calculate that and then say the nanny costs. So we're adding in the nanny costs as time, assuming that if I was to die, maybe they need more in costs related to them. Estimated yearly cash flow, 25, 440, the years that they need it. Once again, just like this year's could be based on how many years till retirement, how many years till the kids reaches 18, for example. So the yearly cash flow, the 254.4 then. So the estimated cost above the daily costs. So we got the goal-oriented costs, 35,000. Same thing with the college tuition, the retirement same thing, care for the parent. That's another goal-oriented thing we might add in. So we've got the 535. So then we've got the emergency. These are the one-time kind of fees. So if the yearly expenses are the 21.8, and we add in the 3.6 for the nanny fees, we're gonna take half of that. So the general idea being, we want half a year's worth of expenses as an emergency fund that comes out to the 12.7.20 here. So then if I tack on the funeral cost, the one-time cost of the 8,005, we're now at the 908.420 for that kind of calculation. So a little bit different on them too, because we're paying off the liabilities in this case. Now again, notice these are static calculations. You might say, well, like if I lived more, then the loan should go down. That would be the major cost I wanna have go down. And it might be cheaper if I can take into time value of money and buy term policy that decreases over time after as I pay down the loan, for example. So you might do some time value money. I'm not gonna go into the loan calculation here, but we'll do this in the practice problem if you want, recalculate your amortization table, and then possibly convert it to a year by year. So if I had a loan, 150,006%, 20 years left payments, 1,075, I can break out the amortization table on a month by month basis, how much I'm gonna owe. But what I really wanna know is to break that out on a year by year basis. And then I can figure out how much I owe each year, and I can figure out the loan balance at the end of each year. You can see then that when I'm looking at the second calculation, based on the loan balance by liabilities, it will decrease each year. So we could try to set up our liabilities or our term policy to actually decline as time passes, which would be nice, be cheaper, right? So if I go down and say, okay, now let's take our financial statements and think about a time value of money. And I'll do this fairly quickly. We'll do it in Excel if you're interested in flushing this out more. But we've got the yearly cash flows that would be needed. So we've got the mortgage, so expenses not including, we got the 21,840. Those are the expenses not including the mortgage that we said were from the income statement over here, 21,840. So we're taking the costs here for the cash flow. And then we're gonna say the nanny costs, we're tacking that on, assuming that if we died, there's gonna be another 3,600 per year. Now the mortgage, notice I probably shouldn't have added the mortgage here if it was fixed, because if it's a variable mortgage and it can change over time, then the mortgage would increase over time when you take into account time value of money with inflation, possibly. But if you're locked in the mortgage rate, then the mortgage, although time value of money will increase the other stuff, the mortgage will still stay what it is if you're not planning to pay off the mortgage, meaning we're planning at the point of death that our spouse just takes the cash flow and pays off the mortgage in accordance with the terms that we have set up already, instead of paying it all off at the point of death. So the yearly cash flow needed would be the 38,336, and so we can then calculate the future value, meaning if I died at this point in time, that's the cost at this point in time. So obviously there is no future value difference right now because I'm in the current period. If I was to drag this out into the future periods, this whole top part is basically based on current value dollars. But if I was to say what would be the future value of this, I could do a future value calculation, assuming that we have inflation, I'm gonna say at 2.5% inflation, often between zero and 3% if the Fed is on target, but it could be more than that at times. So I'm gonna then say that we've got, so the future value costs then for each of these would be the 39,294, the 40,277, these would be the cash flows needs we would need in the future to buy the same basket of goods. And again, remember that this 12,896, if you locked in the mortgage, then you might wanna have another column down here that would break it out separately because it would not be going up. We wouldn't be paying more on the mortgage if we had the rate locked in, for example. So you might just do this future value based on everything not included in the mortgage and the nanny because those things would go up with inflation. And if the mortgage had a flexible rate, then you might include that, for example, or you might break out the mortgage separately and say it's not gonna go up with inflation because you've locked in the rate. Okay, so now we've got these future value needs here. So then we can say, well, the lump sum then, if I was to die, for example, here would be the lump sum of basically, if I just look at the cash flow, it would be the sum of everything out up until that 10 year timeframe. So it would be the sum, this number is the sum of all this stuff. And this number is the sum of all this stuff up until 10. This number is the sum of all this stuff. And you can see, obviously, as I get closer to year 10, then that sum, that amount that I'm gonna need is gonna go down as time passes. Now that's just one way you can look at it. Another way you could look at it is you could say, let's say we're gonna take the lump sum and imagine that if I was to die here, let's just take this current value, the 38336 times 10, right? So they would need 10 years at that current cash flow value, which would be the 3383360. If I was to die here, then let's start it now at this number, the 39294, which would be my starting point. So now I'm gonna take the 39294 times nine, because there's nine years left, and that gives us the 3533646. And then I could say, this one now I need the 40,000. I need the 4277, because that's how much they would need to purchase the same amount of goods, remembering that that mortgage possibly would be fixed, and you can account for that if you, but in any case, I'm gonna take that times now eight years. So that's another way you can come up and so you notice you get a slightly different number. On those two methods, and then you can also say, let's use this method, this is the one we'll actually use. Another method that we can look at is say, let's say that they need the 38336 for the 10 years, I wanna use this as the starting point, but then I'm gonna use the fact that they have inflation of 2.5 and the rate of return is 5%. So we've got this 2.5 real rate of return. So let's see how much would they need in order to have an annuity of payments basically to cover the cash flow needs based on this current value of the 38336. So to do that, I would be taking, this number would be basically the present value of an annuity for annuity loss. So present value with a rate of the 2.5% over the 10 years using this number. And then on year two, I'd start, here's the starting point at year two, and we would take the present value for the 2.5% real rate of return over now nine years using this starting point and then here we would take the present value using this starting point, the 400277, 2.5% over now eight years and so on and so forth. Now I know I'm saying that pretty quickly, but we'll do it in Excel if you wanna kinda get into it in more detail. And so that would give us our cash flow. So I'm gonna be using this number, not these two columns, these are two different ways you can kinda think about it if you wanted to, but we're using this number now for the cash flow needs. So that's the one group of flows that are behaving the same. Remember it again that that mortgage insurance, that mortgage payment may not behave the same because it may be fixed if you fixed the rate in which case you'd have to break that out and pull that down here separate because it's not gonna be going up with inflation if you fixed the rate. Okay, so then we've got the emergency fund which acts differently. So we're gonna say the emergency fund, we're gonna calculate it was half of our cost. So it was half of like a year's cost. We want that as a one time kind of emergency fund. But again, the emergency fund, if I was to die next year, half of next year's expenses would be going up in future value terms. So this number, the 19168, I'm gonna say is a one time cost which is half of this 38,000. So the 38336 divided by two, we're gonna say we have an emergency fund of half of one year, right? And then this one, if I died here, we're gonna say now the future value would be at the 39. So I'm gonna take the 39294 divided by two. So the emergency fund would be half of that. It's a one time calculation, but we're gonna say it's gonna be whatever half of the year's worth of expenses for whatever year of death happened. So then we've got the college fund. So the college fund calculation is gonna be the 27505 we calculate. And for that, I'm gonna say over here, that's a goal oriented cost. So now I've got the 35,000, let's say that's the current calculation for college funds, the future value then 10 years out because we're assuming it takes 10 years before the person reaches 18, which is college age, we're gonna say. So we're gonna need 44803 based on inflation, right? We're gonna say, okay, if it's 35,000 now, 10 years at the point in time that they're gonna need it. Future value of money for 10 years at inflation rate 2.5 is 44803. So if I died today, then I'm gonna say, well, they could invest the money if they died today and get a, let's say a 5% rate of return. So we're gonna say, now we're gonna try to do a present value calculation for a 5% rate of return for 10 years, present value of one, not an annuity. And that means they would only need 27,505 if they invested it, got a 5% return on it in order to meet the college tuitions after 10 years of 44803. And then in year two, notice this is kind of going opposite direction. It's going up as opposed to these calculations which are going down because it's a goal oriented one. If I died a year later, then they would need $28,880 to invest, assuming 5% rate of return in order to reach the goal after nine years to get to the 44803. And then in year two, they would need, I'd do a present value calculation for it at the 2.5% rate of return over eight years. They would need 30,324 for it to grow at a rate of 5% to reach that targeted goal. We have the same kind of calculation for like a retirement. So any target goal could also be an elderly parent. For example, we would say, okay, the retirement fund, if we're trying to get to 500,000, how much would they need in order to be able to invest it at the 2.5% to reach the 500,000 at the point in time that they're gonna retire, which we're gonna say is 10 years again. So again, the 500,000, where did I come up with that? You'd have to do some kind of calculation which is gonna be a targeted retirement necessity. How much do you wanna help out with that if you were to die for life insurance? And then we could do the same approach here and say, when I die, how close am I to that point? And then do my present value calculation. And then we've got funeral costs at the 8,500. So if they're 8,500 today, you would expect they would go up by inflation by the 2.5%. So we're gonna say future value, if I died a year later, they would have to pay for the same funeral costs at 8,713, which costs 8,500 last year. Then they'd go up to 8,930. So there's a future value calculation. And then we've got the life insurance before assets are considered. So that's what they're gonna need, we assume. But we currently have current assets of the 63,500. And that is on our balance sheet, which is the 39,500 and the 24,000. So that would mean if I subtract that out, that we're left with the 6,34147. And you can see this way, we can also think about it declining over time and possibly be putting money into a retirement account that declines over time. This one doesn't decline as much because we had that huge retirement thing that we put in here. But sometimes it'll decline substantially if your major thing is the mortgage that you're taking into consideration, for example. So that's one way you can kind of think about it. Again, be careful with that mortgage one because I probably could have broken that out so it shouldn't be static over time. But those are the general tools, the ideas that you can use. Now the other method that you might use just real quick here is the same kind of idea, but you might start by saying, so I'm gonna say the expenses, the expenses not including the mortgage because I'm gonna assume here off the bat that we wanna pay off the mortgage. We're gonna pay the 151 at the point of death. So what do they need after we pay off the mortgage? It's just gonna be the 21840, which if I look at after we pay the mortgage on the income statement, I'm no longer picking up the mortgage number, which includes this number, I'm just picking up the 284840. And then we've got the nanny costs. So now my yearly costs are the 25,440. And we can do our same calculation here. So now we've got the future value of those cash flows are gonna be going up due to inflation. And then we've got the lump sum calculation. So this is a couple of ways we can calculate it. I could sum up everything after that point to get my cash flow. I could do it this way. I could take wherever I am at this point in time. At that point, they would need 25,440 times 10, which would be that. I could take it here and say now they would be starting at 26076 times nine years, which would be the 234. Or I could try to say, let's do my same calculation we did up top. So I won't spend a lot of time on it, but we could say then that I'm gonna say wherever we started at, we're gonna do a present value of an annuity at that point in time using once again, the 2.5, the real rate rate of return minus inflation. And so then we would come up with these numbers. So these are three methods you can do for that cash flow need kind of calculation. It's different here because I didn't include the mortgage in the cash flow. And again, you might, if you were trying to pay off the mortgage as you go, you might get to this number in this example and then try to pay off the mortgage and used it as one number per year because it's not gonna go up with inflation if you lock the rate. But here we're gonna assume we're paying off the full liability. So whenever I die, now I'm gonna assume that we pay off the liability of the mortgage, which at the point, at point one is 150. And this is where you'd need the amortization table, right? On a per year basis, which is way up here to see the balance after each year. So if I died a year later, it would be at 145,990. I died a year later, 141,744. So it will go down substantially as I get closer to the endpoint here, whatever the timeframe is. So notice we're gonna put the full liability and assume we're gonna pay off the full mortgage based on whatever the amortization table says. That's the big difference between these two calculations. So then we've got the emergency fund, which is the same kind of thing we did before, which goes up with inflation because we would assume the emergency fund would have to be increasing if I died later to buy the same basket of emergency goods, college, same calculation we did before with a targeted amount, retirement, same calculation we did before with a targeted amount, funeral expenses, we would expect to go up with inflation in the same fashion. So the life insurance needs then would be here. And then once again, we'll take into consideration the liquid assets we have, 63.5. So now we're coming up to 664834. So the difference between these two methods is this one, we're thinking about paying off the liabilities at the point of death, whereas this one up top, we're thinking about keeping say the mortgage in place and just paying the payments as they become due. And again, noting that if it was a fixed mortgage, it wouldn't be going up with inflation. If it was variable, subject to variability, then you might have it increasing then with the rest of things as inflation goes. Now, of course, you can get more detail than this even because the mortgage you saw wasn't just 10 years, the mortgage was 20 years, so we used this 10 years out so you could try to map it out for a longer timeframe than the 10 years for the fact that and the 10 years that you might be calculating might be your retirement, which might be different than how many years it'll take for the college tuition and so on. So, but these are just some tools, you can see how you can kind of put them together and the basic idea would be you want to be categorizing by need and the behavior of these kind of things. So the cash flow needs will kind of, you'll need a different kind of calculation or approach than the needs for like a goal oriented type of thing or a one time kind of thing such as paying off the funeral costs. And then again, you could take an approach based on cash flow needs or based on paying off the liabilities at the point of death.