I made a simple spreadsheet recently to help project my future net worth based on market returns and expenses. It takes as input your current net worth (the asset class breakdown is just informational), recurring expense categories and predicted inflation rates for those categories, predicted one-off expenses, predicted future year income, and S&P 500 history, and simulates potential outcomes based on simple models like “if I earned 8% yearly” or “if I started in 1980 and owned the market.”
The main reason I did it instead of using existing tools (e.g.) is that most existing tools seem to think I will constantly work until time T and then “retire” and never work again, which makes zero sense to me unless you assume there is some time T where I suddenly get a giant windfall of money, or unless you assume that I value each marginal dollar at infinity until I am unemployable or dead. I want to be able to play with questions like “what if I don’t work until my kid is 10 years old, and then resume working.”
I made a simple spreadsheet recently to help project my future net worth based on market returns and expenses. It takes as input your current net worth (the asset class breakdown is just informational), recurring expense categories and predicted inflation rates for those categories, predicted one-off expenses, predicted future year income, and S&P 500 history, and simulates potential outcomes based on simple models like “if I earned 8% yearly” or “if I started in 1980 and owned the market.”
The main reason I did it instead of using existing tools (e.g.) is that most existing tools seem to think I will constantly work until time T and then “retire” and never work again, which makes zero sense to me unless you assume there is some time T where I suddenly get a giant windfall of money, or unless you assume that I value each marginal dollar at infinity until I am unemployable or dead. I want to be able to play with questions like “what if I don’t work until my kid is 10 years old, and then resume working.”