Cashflow Modelling
Planning for financial peace of mind
In simple terms, a cashflow model is a projection of income and expenditure alongside your present and anticipated asset base.
The modelling exercise is personalised for you and should incorporate events that are likely to happen, as well as those that may be aspirational.
The modelling exercise is personalised to the individual and should incorporate various events likely to happen, as well as any that might be aspirational.
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What is considered in a Cashflow Model?
As with any projection, there will be assumptions made in the modelling.
Economic factors like the potential effects of inflation and interest rates in the future need to be factored in, as well as the continuation of present tax policies; additionally, the potential returns from investments need to be considered, which will of course be dependent on your attitude to risk.
The construction of the model will enable your Financial planner to present a visual representation of your finances throughout time. Using scenario analysis, this can inform decisions such as:
- Will I be able to retire as planned, or possibly earlier than expected?
- Do I need to take as much investment risk to meet my financial objectives?
- Can I afford to make a contribution towards the purchase of a property for a child or grandchild, or perhaps a contribution to their further education?
- Can I afford to pass on assets to my family whilst still being able to fund my own lifestyle, possibly including paying for private care when necessary?
- Given my objectives, what is a realistic level that I need to achieve when realising my business assets?
Cashflow modelling can also be used to inform matters involving litigation and Courts, such as with decisions relating to the separation of assets on divorce or to ensure continued medical care can be funded.
Our Planners will frequently utilise cashflow modelling to form the basis of their advice and as a method of reviewing the progression of your financial plan.
Interested in finding out about how your long-term financial success could look from utilising cashflow modelling? Why not get in touch today.
Useful Guides
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Guide to Building Wealth
Investing is a formidable tool for pursuing financial goals and building wealth. Whether you aim to grow your wealth, generate income or achieve a balance of both, creating the right investment strategy is paramount to success.
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Guide to Successful Investing
Investing serves as a mechanism for amplifying your wealth. It can assist you in expediting the repayment
of your mortgage, augmenting your retirement savings or safeguarding your child’s financial future. However, before you invest your money, be ready for a long-term engagement.
