VeriPlan Overview 1: Personal Finance Decisions
VeriPlan Overview: Part 1 of 7
Improving personal finance decisions with VeriPlan
VeriPlan gives you significant personal insight into your most important personal finance and investment portfolio decisions. Through comprehensive and customized lifetime projections, VeriPlan’s integrated financial calculators and investment calculators model your particular financial situation across your adult lifetime. VeriPlan projects fully integrated scenarios about your income, expense budget, debts, investment portfolio assets, investment returns, and investment costs within the context of the U.S. federal, state, and local income taxes that apply to you. VeriPlan presents all your personal lifetime financial modeling information in clear graphics and data tables.
You can easily customize any of your personal data and settings in VeriPlan. After you make any modification, VeriPlan’s financial calculators and investment calculators automatically and instantaneously revise your complete lifetime projection. As you use VeriPlan’s rich set of fully integrated “what if” financial modeling tools, you take control of your own financial, investment, and retirement planning.
Personal Users: VeriPlan helps self-directed personal users to understand the possible future implications of current financial planning behaviors. VeriPlan projections model the lifetime finances of one or two adult users and their dependents. Any family member who resides in the same household may use VeriPlan.
Advisory Users: VeriPlan is a valuable tool for financial advisors who serve the fiduciary interests of their financial planning clients. Advisors can obtain a right-to-use VeriPlan on behalf of their clients, when they provide VeriPlan to their clients.
VeriPlan can help you to analyze important personal finance decisions, including:
- What tradeoffs are associated with accelerating mortgage loan payments or other debt repayments?
- Will I be have enough college savings to pay for my children’s education?
- How could my savings rate and investment strategy affect the size of my estate?
- After my living expenses, how much could I give or bequeath to family and charities?
- How large might my exposures to insurable financial risks be over time?
- How might different budgets for insurance premiums affect my lifecycle financial plan?
Investment Cost Reduction:
- What investment returns might I earn net of investment costs?
- How much could I waste on unproductive investment costs?
- How might I optimize my investment returns, while keeping costs to a minimum?
- How does my current investment strategy compare with a scientific strategy focused on long-term, risk-adjusted returns net of investment costs and capital gains tax?
Investment Risk Management:
- What returns might I expect from the balance of expected investment returns and investment risks that I have chosen?
- Am I saving enough to stay in my investment risk and return comfort zone and still reach my financial planning goals?
- If I were to lose income in the future, how long would my liquid investment portfolio assets cover my projected expense budget?
New Business Ventures:
- What are the likely long-term benefits and risks, if I fore-go current income to start a business?
- Could I self-fund my business venture or would I need external capital?
Personal Career Planning:
- What are the long-term economic benefits of changing positions or employers?
- Would returning to school to improve my career skills make economic sense?
- Could starting a business lead to both entrepreneurial and financial success?
Real Estate Planning:
- When will I have sufficient capital for a real estate purchase?
- How would increased mortgage debt affect my investment portfolio and other financial goals?
- Would I have sufficient investment assets to retire early?
- Would my investment assets be adequate to cover my expenses, if I live a very long time?
- What is a relatively safe asset portfolio withdrawal plan?
- Am I saving at a sufficient rate to fund all our future financial planning goals?
- How much benefit might I expect from increasing my income and/or reducing my expense budget?
- What is the long-term value of saving most of my bonus?
- Am I managing my investments from an income tax efficiency standpoint?
- How much should I put into either taxable, traditional retirement accounts, or Roth retirement accounts?
- Would my retirement portfolio assets be adequate after my income taxes and other taxes are paid?
Personal Financial Planning Software for Individuals
- Personal financial planning best practices (VeriPlan helps you to learn about scientifically valid personal financial planning and investment portfolio management practices
Personal finance and investing can be baffling. You can try to learn what works and what does not work from the media or from the financial services industry, but this effort is largely futile. The media reports the financial news [...])
- Buy investment funds through low cost channels (Do not buy mutual funds and ETFs through high cost vendors
All mutual funds and ETFs are not created equally. Most are created to serve the business interests of the financial industry rather than to deliver investment vehicles that are likely to serve the best interests of individual investors.
Do not purchase any mutual funds or ETFs through [...])
- Asset Allocation Calculator (Understand how your lifetime investment asset allocation strategy would affect the growth of your financial asset portfolio
Your tolerance for investment risk is a relative concept -- rather than an absolute concept. Your tolerance for investment risk is relative to the investment risk tolerance of all other investors. Few people like investment risk, but some can [...])
- IRA, 401k, and Roth IRA Retirement Planning (Deciding between traditional retirement plan contributions and Roth retirement plan contributions
Whether or not to make investments into "traditional" tax-advantaged employer accounts and IRAs versus investing in "Roth" tax-advantaged employer accounts and personal IRAs is never a straightforward nor simple financial planning decision. The decision on the trade offs happens to be one of the most [...])
- Best Investment Strategy (Personal investing seems incredibly complex, but the best investment strategy also tends to be a more simple investment strategy
The complexity of personal investment management is driven by the nature of investing in securities that have uncertain and unknowable future values. Nobody -- amateur or professional -- has a working crystal ball that can predict future [...])
- Retirement Investment Calculator (Project your lifetime investment assets using a sophisticated, do-it-yourself retirement investment calculator
VeriPlan's lifetime compound investment calculator retirement software develops customized scenarios that are based on your current personal financial situation and on your goals and objectives for the future. VeriPlan is a sophisticated and fully integrated future value investment calculator that automatically projects the year-by-year [...])
- Long-term compounded real dollar and inflationary returns for the U.S. cash, bond, and stock asset classes (Long-term U.S. cash, bond, and stock asset class compounded returns
Many investors would like to have a better understanding of long-term historical investment returns, so that they can have a more realistic understanding of what investment returns might be in the future. This article informs interested investors about historical inflationary and real dollar returns for the [...])
- Asset Allocation Strategy (Post-financial crisis commentary on tactical versus strategic asset allocation
The best individual financial planning and investment rules and practices are enduring and should not change due to market cycles or a financial crisis. This article looks at asset allocation strategy in light of the recent credit crisis.
The credit crisis was a systemic, global financial event that [...])
- Going Back to College (Evaluate the financial trade-offs associated with mid-career education
VeriPlan's personal financial planning software helps you to evaluate the financial trade offs associated with mid-career education and going back to college. VeriPlan's personal finance software helps you to determine whether your current personal earnings, savings rate, and investment strategy could lead to a sustainable personal financial plan [...])
- Economic ETF trade size cost considerations (Economic ETF trading size considerations
This article discusses some considerations regarding efficient ETF trading and economic trade sizes. At the end of this section, you will also find two tables on ETF brokerage and trading cost amortization over 1, 3, 5, 10, and 20 year holding periods. There is one table on do-it-yourself ETF discount brokerage [...])
- Investment Risk Tolerance Questionnaire (Investors with different appetites for investment risk tolerance are more satisfied with investment portfolio risk exposures that are more in line with their ability to cope with investment financial risk and rewards.
Investors who are more risk-averse are more satisfied with a less risky investment asset allocation – regardless of lower expected investment returns or the [...])
- Concentrated holdings increase portfolio risk (Portfolio risk increases dramatically with concentrated holdings.
A significant portion of a portfolio may sometimes become concentrated in a single investment entity, which dramatically increases the overall risk of the portfolio. While generally undesirable, there sometimes are unavoidable reasons for investment concentration. Unavoidable reasons for lack of diversification can include owning a private business or being [...])
- Projecting the size of your future estate (VeriPlan's investment growth calculator helps you to project the size of your estate in future years
Your investment portfolio and other property assets are simply your evolving estate. These valuable assets could become your estate at any time. As you proceed through life and become more successful financially, you need to monitor the size and trajectory of [...])
- Diversification and the credit crisis (The best personal investment and financial planning practices are durable and should not change because of market cycles and financial crises.
Less diversified active strategies tend of be sub-optimal, involving greater portfolio volatility and risk accompanied by higher costs in term of expenses, taxes, time commitment, and stomach acid. The best investment strategy is to seek [...])
- What should your lifetime IRA, 401k, and Roth contribution strategies be? (VeriPlan helps you to decide what your lifetime IRA, 401k, Roth IRA, and Roth 401k contribution strategy should be
With IRA, 401k, and other tax-advantaged retirement investment portfolio accounts, you trade off the relative value of paying federal income taxes, state income taxes, and local income taxes now versus paying them either later or never. The [...])
- Traditional Versus Roth IRA Decisions (Roth retirement investment strategies have a long payback period
When financial planners, investment advisers, and brokers advise their clients to convert their traditional IRA assets into Roth assets or to make annual Roth contributions rather than make alternative tax-deductible retirement account contributions, are asking for a huge leap of faith. Such proposals suggest that it would [...])
- College Savings Calculator (College savings calculator software helps you to plan college savings and other education expenses for you and your children
VeriPlan's fully integrated and automated financial calculators and financial software tools help you to determine whether your current savings rate would lead to a sustainable financial plan across your lifetime.
In addition, the VeriPlan lifetime retirement planning calculator [...])
- Guard Your Credit from Financial Identity Theft (Guard Your Credit in the Event of Financial Identity Theft
Without becoming a victim of identity theft, you can get a free credit report from each of the three credit reporting agencies once a year. Federal law requires the three major credit reporting agencies to provide these free reports annually. To satisfy their obligations, Equifax, Experian, [...])
- ETFs are for experienced securities traders (ETFs are for experienced securities traders with open eyes
Some of my time, I work directly with paying clients to develop comprehensive lifetime financial plans and investment plans. I always explain the virtues of a globally diversified, fully passive, very low cost, index fund investment strategy. This is consistent with this website and with my other [...])
- Municipal Bonds and Marginal Income Tax Rates (Municipal Bond Investments and Marginal Income Tax Rates
Some investors hold municipal bonds in an attempt to reduce their tax burden. This article discusses the relationships between tax-exempt municipal bonds, marginal tax rates, and investment asset tax location.
An investor’s marginal tax rate is important, when making tax-related investment portfolio decisions. By combining your federal, state, and [...])
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