*The Living Balance Sheet

*The Living Balance Sheet

How accurate is financial forecasting?  Many financial planners use both a past and future forecasting to design a financial plan for clients.  As a matter of fact, Monte Carlo simulations (computerized simulations designed to model various outcomes and risks) are run to supposedly add credibility to the financial plan outcome.  However, why do you need to forecast future results which may or may not happen?  Perhaps this allows people to sleep better at night? 
Life happens.  Therefore, why not just keep a personal balance sheet which is easily updated automatically from your existing checking and investment accounts?  These online accounts are very secure and can chart your progress 24 hours a day.  I use Mint (A Quicken Product) which recently was voted best personal financial service software by PC Magazine for 2017—and it is free.  Sure, it takes some time to get all your accounts set up but you will soon find out all this work is well worth the effort.   
Financial planning is evolving to include alternative investments into an already mixed portfolio for added diversification and to limit the total exposure to a stock and bond only investment portfolio.  In addition, alternative investments can offer increased yields which will propel your overall retirement investments.  Believe it or not, some of the most sophisticated financial planning software packages do a poor job including alternative investments into its mix of investments.  Keep life simple, just track your daily progress and set realistic goals for your financial future.   
As always, let me know if I can help
Gerald House
The Contrarian Investor
Prosperity Economics Advisor

* The title is copyrighted by Guardian Life Insurance Company but was a good lead-in to my blog post.  How did they get such a common name copyrighted anyway?

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