Cash flow modelling is an important part of the financial planning process. it helps you assess whether you can realistically reach your goals. Whether those be planning a secure retirement, repaying your mortgage or paying for university fees.
Broadly it’s a computer simulation which has a wide range and variety of data points including assumed rates of growth, income, inflation, wage rises and interest rates. It takes a detailed picture of your assets, debts, income, expenditure and projects it forward for example to retirement.
Cash flow modelling is appropriate for individuals who wish to become and remain financially well organised, determine and achieve financial lifetime goals, create a lifetime plan and manage their tax liabilities.
We fully involve our clients in the cash flow modelling process and get to know and understand their goals and aspirations for themselves and their family. We don’t make assumptions or rely on guesswork when it comes to our clients’ aspirations for lifestyle and spending.
A cash flow model is only as good as the information available. That’s why we take the time and care to fully understand our clients’ needs. We make sure that we are kept updated about inevitable changes to a client’s circumstances. Our experts review and update the model accordingly.
There are of course assumptions to be made regarding projected inflation and growth rates. We clearly explain these to our clients and continually review.
The client’s individual cash flow model demonstrates to the client their current position relative to their preferred position and their goals and helps to put plans in place to achieve those goals.
Cash flow modelling is particularly useful when we model different scenarios based on decisions that clients may make. This can help to understand the potential financial impact of investment, lifestyle and spending choices.
You will receive a clear and in-depth summary of your financial arrangements. You’ll also get an analysis of your personal expenditure planning assumptions, balancing your cash inflows and their desired cash outflows. We can estimate future cash flow based on realistic assumptions.
The process will help you focus on your goals and aspirations.
Be aware that the value of your investments can go down as well as up. You could get back less than you invested. If you want to know more about in investing your money, please get in touch. Our independent financial advisers in York are here to help.
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