Personal Financial Planner

Executive Summary

The purpose of this project is to develop a personal financial model that allows a user to predict their future wealth based on a wide variety of information including salary, loans, real estate investments, and financial investments.  Being equipped with this model, a user can better make financial decisions.  For example, how much do I need to save each month to have enough money for retirement?  Or, how will having a mortgage payment affect my monthly liquid cash?  While financial decisions shouldn’t be made solely on the results of this model, the model does allow the user to become educated about their decision.

In order to give any reasonable credibility to the financial model, a large amount of information is required.  The following summarizes all data inputs:

• General Information: Birth date, expected retirement age, current salary, desired retirement income, approximate tax rate, inflation rate, and salary growth rate.
• Loan and Mortgage Information: Loan start date, beginning loan balance, interest rate, loan duration, expected monthly loan payment, updated balance, and updated balance date.
•  Real Estate Information: Property purchase date, purchase price, down payment, monthly property tax, monthly fee, updated property price, and updated property price date.
• Investment Information: Investment balance, date of investment balance, monthly personal contribution to investment, employer contribution, expected annual return, annual fees, and estimated contribution end date.

The results of the model are portrayed in five categories: liquid cash flow, loans, real estate investments, financial investments, and total wealth. 

The liquid cash flow results display a table detailing how much money is currently being paid to taxes, tithing, loan payments, property taxes and fees, and investment contributions.  A graph shows the user’s expected liquid cash through the age of 90.

The loan results summarize each loan by showing how many months remain on the loan and projected loan end date.  There are also two graphs that display properties of the loan over time.  The first graph shows accumulated principle for each loan.  The second graph show how much of each payment is going toward principle and interest for each loan.

The real estate and financial investment results show the growth of these investments over time.  In the case of real estate, a graph shows accumulated equity for each property based on the down payment, paid mortgage principle, and property value changes.  A graph also show financial investment growth based on an expected return rate and personal and employer contributions.  The real estate and financial investment summaries show how these investments diminish during retirement.

The final result is a total wealth graph.  This graph summarizes all accumulated wealth in real estate and financial investments.

Sean Smith