Personal/Family Net Worth Projection Model (Excel XLSX)

A Personal/Family Net Worth Projection Model is crucial for financial well-being. It assesses assets, liabilities, and income over time, offering insights for informed financial decisions. It aids in setting financial goals, managing debt, and tracking progress toward wealth accumulation. By forecasting future net worth, it encourages savings and investment strategies. This tool ensures that personal finances align with long-term objectives, enhances financial stability, and supports retirement planning. It provides a clear picture of one's financial health, enabling individuals and families to make sound financial decisions and achieve their financial aspirations.

PURPOSE OF MODEL
Highly versatile and user-friendly Excel model for projecting the net worth of an individual or family on an annual basis for a period of up to 50 years.
The model allows the user to project asset and liability balances and cash flows resulting from income streams, ongoing living expenses, income generating assets, loans and other assets and liabilities across a 50-year timeline which can have a mix of actual and forecast periods.

The model follows good practice financial modelling principles and includes instructions, line item explanations, checks and input validations.

KEY OUTPUTS
The key outputs include:
•  Projected Cash flow, and net worth projection statement containing splits for each income, expense, asset and liability category presented on an annual basis up to 50 years.
•  Dashboard with:
Summarised projected cash flow and net worth statements;
Compounded Annual Growth rate (CAGR) for each summarised cash flow and net worth line item
List of key ratios including average income, savings and net worth growth, average % of expenses to income and average % of liabilities to assets;
Bar charts summarising projected savings and net worth across the projection period.

KEY INPUTS
Inputs are split into Income Statement and Balance Sheet Inputs. Most inputs include user-friendly line item explanations and input validations to help users understand what the input is for and populate correctly.

Setup Inputs:
•  Name of individual or family;
•  Currency;
•  Timeline start year;
•  First projection year;
•  Naming for income streams, ongoing expenses, income generating assets, loans, other assets and liabilities and tax rate types.

Actuals Inputs:
•  Opening balances for individual income-generating assets, loans and other assets and liabilities.

Projection Inputs:
•  Income stream inputs including pre-tax income by year and tax rate type for each category (10 in total);
•  Ongoing expenses by year for each category (15 in total);
•  Income generating asset additions and reductions by year, total return per annum, cash flow portion of return and tax rate type for each category (10 in total);
•  Loan additions and reductions by year, starting year, ending year, interest rate, grace periods for interest and principal for each loan (5 in total);
•  Other assets additions and reductions by year, appreciations/depreciation rates per annum and transaction cost and taxes for each category (10 in total);
•  Other liabilities additions and reductions by year and interest rate per annum for each category (5 in total)
•  Other cash flow movements per year for each category (5 in total);
•  Effective tax rates for each tax rate type (5 in total).

MODEL STRUCTURE
The model comprises of 8 tabs split into input ('i_'), calculation ('c_'), output ('o_') and system tabs. The tabs to be populated by the user are the input tabs ('i_Setup', ‘i_Actuals' and 'i_Assumptions'). The calculation tab uses the user-defined inputs to calculate and produce the projection outputs which are presented in 'o_Statements, and ‘o_Dashboard'.

System tabs include:
•  A 'Front Sheet' containing a disclaimer, instructions and contents;
•  A Checks dashboard containing a summary of checks by tab.

KEY FEATURES
Other key features of this model include the following:
•  The model follows best practice financial modelling guidelines and includes instructions, line item explanations, checks and input validations;
•  The model contains a flexible timeline that allows for a mix of Actual and Forecast period across a 50-year period. This allows projections to be easily rolled forward;
•  The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
Income streams – 10 categories;
Ongoing expenses – 15 categories;
Income generating assets – 10 categories;
Other assets – 10 categories;
Loans – 5 categories
Other liabilities – 5 categories
Other cash flow movements – 5 categories.
•  Apart from projecting asset and liability balances the model includes cash flow projections which increase or decrease the bank balances;
•  Individual/family Name, currency, starting timeline and projection year are fully customisable;
•  Income, expense, asset and liability descriptions are fully customisable;
•  The model includes instructions, line item explanations, checks and input validations to help ensure input fields are populated accurately;
•  The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors.