No financial planning software and no investment growth calculator can predict the future – Part 2
The future in not predictable, even with automated financial planning software.
The future is fundamentally not predictable. The future of personal financial planning and investing is similarly unpredictable. The Skilled Investor’s approach with VeriPlan is different. As a lifetime financial planning and investment modeling tool, VeriPlan fully embraces the uncertainty of the future. VeriPlan is an automated and fully customizable decision support tool for lifetime personal financial planning decisions. VeriPlan makes no claims whatsoever to be predictive. VeriPlan is not a crystal ball. You should not develop any false comfort that you can predict the future by yourself, nor should you expect that VeriPlan can predict what will happen. (See these articles: Executive Summary of VeriPlan and VeriPlan’s 10 Financial Planning Tools and Financial Calculators)
VeriPlan is a sophisticated and individually customizable do-it-yourself financial planning spreadsheet software product. Developed at the outset to serve as a personal decision application for advisory clients, almost a decade ago a standalone configuration of VeriPlan was released, which home users could use themselves. It has been enhanced and updated every year since then.
The VeriPlan financial planning software for individuals is now the most automated and personally customizable home personal financial planning software which is available on the market — for much less than the price of competitors’ financial planning software applications.
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VeriPlan intentionally avoids any assessment of probabilities about the future. Instead, based on your inputs and assumptions, VeriPlan projects internally consistent scenarios about your particular financial and investment affairs projected across your lifetime. VeriPlan’s future value calculator functionality automatically projects these hypothetical illustrations based on the very long-term historical securities market trend lines. To understand their impacts, you can adjust to these historical rates of return, as you wish. (See this article: What have average investment asset class risk premiums been over long periods?)
VeriPlan creates fully customizable projections that model your particular financial affairs and your financial planning intentions about the future. VeriPlan’s personal financial planning software incorporates your potential earnings, expenses, savings, debts, and investment growth. VeriPlan’s future value calculator incorporates the historical market risk premiums that have been paid on various asset classes, plus current federal taxes, state taxes, and local tax rates and limits. VeriPlan’s lifetime cash flow analysis capabilities automatically develop a customized series of annual net worth projections for you. These net worth projections also automatically reflect the impacts of your investment taxes and your investment costs. (See: VeriPlan Overview 4 — Your investment portfolio assets in VeriPlan)
VeriPlan’s embedded documentation details how VeriPlan develops your customized lifetime projections. VeriPlan allows you change any assumption and to adjust return on investment rates both scientifically and arbitrarily so that you can analyze a wide range of more pessimistic and more optimistic projection scenarios. VeriPlan’s fully automated scenario planning capability helps you to evaluate how you might manage over the long term, if the future were to deviate substantially from the long-term historical trend.
Despite VeriPlan’s extensive features, the bottom line is that you cannot, VeriPlan cannot, and no other tool can predict the future. Measuring your current financial situation and using your financial planning inputs, every VeriPlan projection provides 21 standard graphics that summarize and illustrate key financial planning metrics through age 100. However, you should not get too enamored with any of VeriPlan’s graphics regarding your future financial affairs.
VeriPlan’s graphical scenarios can be useful to your thinking and planning. Nevertheless, they cannot and do not provide a map into the future for you. Throughout your life, the ongoing financial decisions that you make as your financial circumstances change is the only way that you can actually know your personal financial map.
You can prepare for the future, but not predict it. As an evolving toolkit, VeriPlan can help you to role-play about what you may need to do in the present to get to your future goals. For most people, VeriPlan will act as a wake up call, because most people have not done enough to plan financially for their futures.
VeriPlan Is Simply the
Best Financial Planning Software for Individuals
that You Can Buy!
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