/biz/ - Business & Finance

[Anonymous No.57504023]

t. mathematical retard need help.

I need a calculator or excel formula to a quick calculation.

Initial investment: $1 million
Return on Investment: 8%
Withdrawal rate: 2%
Horizon: 10-15 years

How can I plot this on excel and play with the withdrawal rate to determine what's best for my financial situation?

[Anonymous No.57504059]

>>57504023
Certainly! You can use Excel to create a simple model to analyze the impact of different withdrawal rates on your investment over a specified horizon. Here's a step-by-step guide:

Create a Time Column:

In column A, create a time series ranging from 1 to the maximum horizon (15 in this case) to represent each year.
Initial Investment:

In cell B2, enter your initial investment amount: $1,000,000.
Return on Investment:

In cell C2, enter the formula to calculate the investment value for each year based on the return rate. In C2, enter the formula: =B2*(1+8%). Then drag this formula down for all the years in the time series.
Withdrawal:

In column D, you can calculate the withdrawal amount. In D2, enter the formula: =B2*2%. Drag this formula down for all the years.
Remaining Balance:

In cell E2, calculate the remaining balance after withdrawal: =C2-D2. Drag this formula down for all the years.
Conditional Check for Negative Balance:

In cell F2, check if the remaining balance is negative: =IF(E2<0,"Negative","Positive"). Drag this formula down.
Graph:

Create a line chart with the time series on the x-axis and the remaining balance on the y-axis. This will visually represent how the investment changes over time.
Now you can play with the withdrawal rate by changing the percentage in cell D2 and observing how it affects the remaining balance over the specified horizon.

Please note that this is a simplified model and does not consider factors like inflation, taxes, or fluctuating returns. Adjustments can be made based on your specific financial scenario.

[Anonymous No.57504065]

>>57504023
Simply substract the withdrawal rate from growth rate (ROI)

[Anonymous No.57504101]

>>57504065
I understand, I want it visualized with three different scenarios to compare over a 10-15 year horizon.

[Anonymous No.57504158]

https://www.thecalculatorsite.com/finance/calculators/compoundinterestcalculator.php

There are plenty of Excel tutorials on Youtube and elsewhere online. I'd suggest going through at least one of them.

[Anonymous No.57504159]

Question: Is it financially smarter to adjust your withdrawal rate down as you age or up?

Let's say you just entered your 30s and imagine to live until 70. The less you withdraw, the more the money will grow but you will be required to wage slave longer and live below your means. What would /biz/ do with a NW of $2 million in this scenario given a ROI of 8%/year?


>Scenario 1
You start with a "high" withdrawal rate of 4% and go down 1% every decade until you're at 1%.

>Scenario 2
You start with a "low" withdrawal rate of 1% and increase up to 4% every decade until you're at 4%.


How do I compare these two scenarios and which is better?

[Anonymous No.57504213]

>>57504159
Is /biz/ Fiver now? You'll figure it out, Anon. I believe in you.

[Anonymous No.57504231]

>>57504159
Rudimentary math, Watson. The more you have the more you get in return

[Anonymous No.57504382]

>>57504023
Just google “savings distribution calculator”. There are websites that do this for free, anon.

[Anonymous No.57504391]

why dont you just use a chatbot tardo