In order to provide a meaningful cash flow plan we need specific relevant detail. The modelling tool we use needs to know what you are thinking. So if you are planning on retiring at a certain age, is that part retirement or full retirement, what are your core expenses like now and how do you envisage these to change when you retire or when your children leave college? An accurate cash flow model can also indicate if there’s a possibility of you running out of money before you die and demonstrate what you need to do to negate that possibility.
Financial & Cash Flow Modelling
What You Know
What You Know
Many of our clients have good knowledge at a higher level of their financial assets, be they fixed property assets, investment portfolios, direct share portfolios, pension assets, deferred pension arrangements or severance payments that may be in the offing.
However, for most identifying their long term income flows from these assets is a very important part of making big decisions such as when to stop or reduce working hours, predicting college expenses and associated costs, pension funding levels, savings and the repayment of debts and mortgages.
What is Cash Flow Modelling?
What is Cash Flow Modelling?
Cash flow modelling in its simplest form is the processing assessing your current and forecasted wealth, along with inflows (income) and outflows (expenditure) to enable Navigation Wealth to create a picture of your finances both now and in the future.
Preparing a cash flow model is a fundamental step in building towards milestones in life and key to sound financial planning and investment.
Cash flow modelling measures your current and future financial worth based on your income and expenditure over your lifetime. The model also takes into account possible financial outcomes that might occur in your lifetime.
How Does It Work?
How Does It Work?
Based on certain assumptions we can illustrate what your current financial position is, relative to your preferred position and your long term goals. We can essentially help you look at options.
For example, what if you wanted to retire at 60 but were concerned about the impact of education costs if you have one or two children just entering college?
What if you have a number of properties and want to know the impact from a cash flow, income flow (from rent) and tax perspective should you sell one or a number of these properties at varying points in time (eg. 62, 68, or 75).
The Questions Our Clients Ask
The Questions Our Clients Ask
What if you have an ARF and want to know if it can sustain you in the long term?
What if you want to know what the potential inheritance tax bill would be like should you die at a certain age?
What if you want to spend 20k per annum on holidays from the age of 60 to the age of 70, what affect will this have on your assets?
Through the use of highly reputable software we can work through a cash flow model for you leading to better savings, investment and life changing decisions.
Accuracy
Cash Flow & Investment
A particularly useful benefit of cash flow modelling relates to your investment strategy. If for example you require a relatively modest lifestyle in retirement and have some years away, then why adopt a high risk investment strategy when a more cautious strategy will achieve your objectives? Cash flow modelling will allow you to ask the question, why should I take any more risk that what I need to? On the flip side of the coin, you may want a very comfortable way of life in retirement; expensive holidays, travel, family that may be living abroad, hobbies or even trigger happy on Amazon! In those circumstances, it may be necessary to consider more adventurous investment strategies to sustain your assets and income in the longer term.
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