I want to calculate my retirement based on my whole net worth, not just a portfolio at a brokerage. For the Portfolio Value section, where do I enter the values of cash, gold, crypto, real estate, and classic cars? I realize these don't go up and sometimes go down. Should I just use this tool for stocks and bonds only and leave real estate out? Then do I calculate real estate gains manually outside the tool and enter specific sale dates in the additional inputs section?
Many people retire from business income and sales, real estate rentals, collectible sales, metals and crypto savings, or inheritance without stocks at all. Can this tool help them too?
cash, gold, crypto, real estate, cars
Re: cash, gold, crypto, real estate, cars
For what you'd like to do, it may be possible for you to get some insights using this tool, but it's tough to say. What you're trying to do is definitely not part of what the tool was designed to handle so it may make sense to look for other options.
If you decide to tinker some, this would definitely be an advanced way of using the tool so you'll need to do pretty extensive testing and rechecking to make sure the tool is doing what you expect it to do with every aspect of your plan. This wouldn't be for beginners or folks not comfortable doing a bunch of side research to be sure the plan they ultimately create actually tracks reality.
The core Monte Carlo engine underneath this tool is designed to model an investment portfolio, its returns, and its growth over time while supporting withdrawals to fund retirement expenses. Most people model all of their investment assets as one overall portfolio and choose a return/standard deviation that's appropriate for the overall combined portfolio.
Your combined portfolio could include non-traditional investment assets, in which case you'd need to choose appropriate custom settings for your portfolio return and standard deviation based on the mix of assets in the overall portfolio. Also, there is an embedded assumption in the model that assets in your portfolio can be made liquid and used to fund retirement expenses when needed, so you'll want to consider that as well.
Some people model real estate by treating the future sale of a property as a future income cash flow. With this approach, you'd set up a one-time (single year) income cash flow in the year you plan to sell the asset. For example, if you plan to downsize your home at age 75, you could model this as a single-year income cash flow at age 75 with the cash flow amount equal to the expected net income you'll get from downsizing your home. With this approach, it's important to set up the cash flows "COLA Type" appropriately. The COLA type and COLA percent (for fixed cola) can be used to control the growth rate of the asset during the period before it gets sold. Of course, this approach bypasses the Monte Carlo feature of the tool and doesn't capture the true variability of returns for any assets that are handled this way.
If you decide to tinker some, this would definitely be an advanced way of using the tool so you'll need to do pretty extensive testing and rechecking to make sure the tool is doing what you expect it to do with every aspect of your plan. This wouldn't be for beginners or folks not comfortable doing a bunch of side research to be sure the plan they ultimately create actually tracks reality.
The core Monte Carlo engine underneath this tool is designed to model an investment portfolio, its returns, and its growth over time while supporting withdrawals to fund retirement expenses. Most people model all of their investment assets as one overall portfolio and choose a return/standard deviation that's appropriate for the overall combined portfolio.
Your combined portfolio could include non-traditional investment assets, in which case you'd need to choose appropriate custom settings for your portfolio return and standard deviation based on the mix of assets in the overall portfolio. Also, there is an embedded assumption in the model that assets in your portfolio can be made liquid and used to fund retirement expenses when needed, so you'll want to consider that as well.
Some people model real estate by treating the future sale of a property as a future income cash flow. With this approach, you'd set up a one-time (single year) income cash flow in the year you plan to sell the asset. For example, if you plan to downsize your home at age 75, you could model this as a single-year income cash flow at age 75 with the cash flow amount equal to the expected net income you'll get from downsizing your home. With this approach, it's important to set up the cash flows "COLA Type" appropriately. The COLA type and COLA percent (for fixed cola) can be used to control the growth rate of the asset during the period before it gets sold. Of course, this approach bypasses the Monte Carlo feature of the tool and doesn't capture the true variability of returns for any assets that are handled this way.
Who is online
Users browsing this forum: No registered users and 3 guests