In our last post, we discussed how you can now customize the color scheme of your Truth Concepts calculator. It’s important to be able to create an aesthetic you enjoy looking at, and that you feel is aesthetically easy to work with. In addition, it’s helpful to be sure that you can read all of the charts and graphs you create when using the software. We also recognized the value in having the color scheme of the numbered charts stay the same across every calculator so you can build a visual language as you use Truth Concepts.
The Importance of a Visual Language
When we say visual language, what we mean is that we want you to be able to look at any Truth Concepts calculator and be able to identify what you’re looking for easily. You build this visual language by making certain features look uniform across every calculator.
In older versions of Truth Concepts, we’ve had features that built toward this idea. For example, certain color fonts often represented certain outcomes. Now, every time you use a calculator, you can be sure that when you use Cash Flow, the column colors will represent the same concepts as the columns from Diversification, and so on.
We’ve done this so that as you become familiar with the software and use it more and more, your brain is going to make those connections and you’re going to get faster at interpreting what your calculators say. This also eliminates any room for error, because a yellow column in one calculator will mean the same thing as a yellow calculator in another. You don’t have to learn what each calculator means individually, because each color represents the same idea in every calculator.
Column Colors: What Do They Mean?
Below, you’ll see a Cash Flow calculator. We’ve left it blank so that you only have to consider the column colors, not the numbers. Let’s go over what they are and what they represent.
Blue Columns: Account Values
In every calculator, blue columns represent Account Values. These can be Beginning of Year values or End of Year values, and will usually be situated on the far left and far right of your Truth Concepts charts respectively. If you want to know how much is your client’s account in a particular year, keep your eye out for blue columns.
When life insurance is involved, Cash Value is represented in blue columns, since it’s a liquid account your clients can access.
You’ll also note that Deflated Account Values are included here if you add an inflation cost. While normally you would have to use a Financial Calculator from the Tools section to calculate the effect of inflation, several calculators now include it in the charts.
If you open Loan Analysis, you’ll see the columns are a bit different than you’d expect. Rather than blue being called “Account Value,” blue represents “Loan Balance.” This is strictly to represent that it’s meant to be a declining balance, though conceptually it’s still the same–it’s the value of the account being represented.
Yellow Columns: Cash Flows
If you want to see the money that is moving, look for yellow columns that represent Cash Flows. This can be money moving toward you, or money moving away from you (deposits or withdrawals).
In some calculators, “Cash Flows” may be represented by loan money that’s moving through someone’s personal economy.
Green Columns: Earnings
If you want to know what a particular account is earning, look for the green columns. It’s important to note that earnings include the Earnings Rate, which is a percentage, and Interest Earnings, which is your dollar figure. Both represent a change to the account based on an external earnings, not your personal cash flow.
Orange Columns: Fees and Taxes
If you’re looking for money that is being siphoned from an account, look no further than the orange columns. Orange columns represent any taxes that reduce the Account Values, as well as fees like management fees.
In a calculator like Loan Analysis, you’ll see that Interest Charged and Principal Payment are orange columns. Meanwhile, the full loan payment is in yellow. This is to represent the total Cash Flow of the loan payment (yellow), as well as the individual charges that make up that payment (orange).
You’ll also see that in some calculators, term insurance is in orange. This represents that term insurance is strictly a cost, since there is no guarantee of a death benefit.
Purple Columns: Legacy
Finally, there are purple columns. These columns represent legacy, in most cases, this means the Death Benefit, yet it can also more generally represent money designated for heirs. You’ll see this in calculators like Funding, shown below.
A Note About Column Colors
As this is integral to understanding the visual language we’re creating, it bears repeating: the colors of the columns represent certain concepts. The actual verbiage in each column heading may differ from calculator to calculator (such as green columns representing Interest Earnings, Earnings Rate, and Annual Cash Value Increase respectively).
Our hope is that the more you use and learn the calculators, not only will you be able to identify information more quickly, but you’ll also create correlations between certain actions within the charts. Changing how you view Cash Flows, Account Values, and more can be a powerful paradigm shift.
Other “Colors” in the Truth Concepts Visual Language
Apart from the colors of the columns, you should also be aware of the font colors used in the calculator. Primarily, the font color indicates the direction of money.
This is VERY important: red font does not necessarily indicate a loss, it indicates the direction in which money is flowing.
Money that is flowing away from you is represented by red font. For example, if you are paying a premium or making a contribution to an asset, that money is flowing away from your pocket and into your account, so it’s red. This is true even if the asset belongs to the person funding it because it indicates the movement, NOT a loss/gain.
However, you may also notice that negative interest rates, taxes, and other figures are represented in red. While these DO represent a loss, they also indicate money moving away from the account (and not into YOUR pocket).
Green font, on the other hand, is money moving toward you. So money you withdraw from an account is going to be green because it’s going from your account to your pocket.
Of course, it can also represent a gain, because it’s money moving toward your account (and not FROM your pocket).
Based on the Cash Flow calculator above, you can give it a quick glance and note that $10,000 is moving from your pockets to your account each year, and $2,000 is flowing back into your pockets from your account.
This simple shift in perspective is going to make it that much easier to interpret your Truth Concepts charts and start thinking about money in terms of Cash Flow rather than P/L.
Want to Get Your Practice In?
If you’re ready to build upon these concepts and really step up your calculator game, it’s time to consider attending a Truth Training. When you come to training, you’ll learn these tips that go above and beyond the average user’s software knowledge, and cement it in your practice. This can help you position yourself as an authority to your client.
Find out when our next Truth Training is, and we hope to see you there!