Cashflow modelling is essentially designed for people who are settled and have an end goal in mind. “For example, they may have children – who are perhaps in private education or at university, so costs are known – and they’re on their glide path to retirement. They’ll have an idea of when exactly they want to retire. They’re not sure how much money they’ll need, but they’ve got the earning capacity to make additional payments into their pensions if needs be,” Ben explains.
"What we don’t want is a lot of assumptions,” he adds. “Individuals in their 20s or 30s, for example, may not know if they’re going to have any children or how many. They may not know what path their career will take. They’re unlikely to know what they’ll be earning at the age of 50 etc. As a result, there are too many unknown costs to be guessed at.”
As an expert in cashflow modelling, Ben knows exactly when to employ the software to best effect. He recalls a client who knew little of how it worked. As he explains: “Some of the questions he had and things he was talking about – such as income being squeezed, expenditure rising, being asset-rich and cash-poor, and changes in personal circumstances – called for the program to be brought into play. It provided answers to his questions, brought them to life and got them down on paper. Now his family have peace of mind about the affordability of certain decisions.”