Stress test

Open Stress test from the portfolio's menu. Stress scenario lists what you can change. Each change lasts the whole projection.

• Portfolio-wide changes: an Interest rate increase in percentage points, added to every loan's rate, and a Living expense increase in percent, added to every recorded living expense.
• Income reductions: a % reduction for each income. Each shows what it pays a month now, such as Daniel Mitchell salary, $11,787 a month now, after withholding.
• Rent reductions: a % reduction for each rented property, such as Armadale house, $2,600 a month now.
• Structure funding reductions shows when a person regularly pays into a company or trust. Reducing it leaves the person with more cash and the company or trust with less. Total cash does not change.

Select Run stress test. With no change entered, the page says Enter at least one change to test, such as an interest rate increase of 2 percentage points.

Three closed panels follow the changes. Select one to open it.

• Projection basis: Years to project, 10 to start, and the yearly growth in income, rent, expenses, average weekly earnings and CPI, each 3% to start. They work as on Cash forecast.
• Cash accounts: the account each legal owner pays from, as in Cash routing to start.
• Cash reserve: the least cash each legal owner must keep, $0 to start. Each owner keeps it on their own. With a reserve of $0, the answer names owners whose cash falls below $0.

After a result shows, the button reads Update stress test. Change a field and the results stay with a note, Stress scenario changed, until you run it again.

Stress outcome sets the average month of this financial year beside the same month under stress. Pay counts after the tax withheld from it.

The answer names each owner who falls below the reserve, earliest first. Here it reads Mitchell Family Trust's cash falls below the $10,000 cash reserve under this stress on 5 Oct 2026, and would need $4,850 more. A second sentence says the same of Mitchell Holdings Pty Ltd, from 13 Nov 2032, with $13,359.

• Additional cash is the reserve less the lowest cash: $10,000 less -$3,359 is $13,359.
• Needs cash from is the first day the cash is below the reserve.
• Lowest cash and Greatest need are the least cash on any day and that day. Each payment counts on the day it falls, so the lowest can fall between month ends.
• An owner who never falls below the reserve reads $0, Never and None.

The trust starts with $13,000 and pays $7,850 on 5 Oct 2026, which leaves $5,150. That is below the reserve with or without the stress. How to read a stress test says which figures answer whose cash runs out, and when.

What changed splits the monthly change by each stress. Together the two make the -$2,379 monthly change.

• Monthly change by property gives each property's change before tax. Frankston unit moves -$520, and Glenorchy house, with no loan, moves $0.
• Monthly change by legal owner gives each owner's change, which adds up to the monthly change. Emma Mitchell's is -$1,187 and Daniel Mitchell's is -$758.

Change under stress by tax line shows what the stress does to the year's tax. Interest on a rental loan is deducted, so higher rates lower the estimated tax. Pay withheld does not change, so the settlement after 30 June moves in your favour.

Monthly cashflow after tax is the average month with a twelfth of that settlement: $9,658 before the stress and $7,682 under it.

Cash by legal owner draws each owner's cash path, before and under the stress. Owner outcomes gives each owner's cash on 3 Oct 2036: Mitchell Holdings Pty Ltd ends with $6,076 under stress against $45,626 without it.

Download PDF saves the result with its basis. A Business account can also send it to the client.

Property sale response tests selling up to three properties as a response to the changes. Add property sale, then choose the Property, its Contract date and its Settlement date. The contract date starts a year from today, with settlement 30 days later. Remove property sale takes one out. A sale with no property, or a date outside the years to project, shows Each property sale needs a property, a contract date and a settlement date inside the years to project.

Each sale uses the property's saved value growth, selling cost and capital gains settings. It repays the property's loans at settlement and leaves the rest of the cash with its legal owner. Choosing the main residence asks for Replacement rent after the home settles, with its frequency.

Say the Mitchells sell the Frankston unit with a contract on 4 Oct 2027. Its recorded $558,000 grows 3.5% a year, and selling costs are 2.5%.

Emma owns it, so the cash stays with her. Her cash on 3 Oct 2036 is $638,841 after the sale, against $387,052 under stress without it. A sale adds a third line to each cash path, and a Runs out after sales column, the date cash falls below $0 with the sales. A sale does not help another owner. Mitchell Holdings Pty Ltd's cash still falls below $0, on 13 Nov 2034.

Selling an investment property before retirement looks at the same question over a longer time.

• When the cash forecast itself cannot run, the page reads Stress test unavailable and lists the records to add, each with its action.
• If the stressed run fails, the page says the stressed projection did not complete and your scenario is unchanged. Select Try again.

Setup lists every record a result is waiting on.