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When to determine spending level?

Submitted by wbwinchell@frem... on 11 February 2008 - 12:31pm

12 months ago I entered my data that was current at the time and the program told me that I could spend ~200K per year. Just last weekend I entered my updated financial data and the new calculation is that I could spend ~150K per year. This change was due to the change in my investment asset values over the last 6 months. My question is - how can I use this program to determine my spending level when the my asset values can flucuate significantly?

Thank you,
Steve

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Submitted by Dick Munroe on 12 February 2008 - 9:31am.
1

Steve,

Monte Carlo to the rescue.

You can have many portfolios (up to 12) and many assets (up to an additional 12 on top of the 13 we already define). Define a portfolio for your current asset allocation and another (or many more) for what you believe your asset allocation will be in the future. Use the Implement Portfolio tab to say when these portfolios will be in effect. Then run your reports. This will tell you what you can expect your future to look like.

Best,

Dick Munroe

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