For those of us that strive to control our finances and get ahead in life, being able predict what a potential portfolio will be worth in the future is absolutely essential. If I save $100/month for the next 10 years, what will the value of my portfolio be? More importantly, what will my purchasing power be? What if I increase that $100 per month by 10% per year? What if I only make quarterly deposits to my account? These are all questions that effect real people every day.

The problem is that projecting an investment portfolio into the future requires many assumptions. The most important of which is the rate of return you expect to earn on your investments. The second most important is what the inflation rate will be during that same time frame. While most people track stock market returns like a hawk, they don’t look at the other side of the coin. If the stock market returned 10% in one year, that’s great right? But what if inflation was 12%? Congratulations, your purchasing power decreased by 2%. Dammit!!!

In searching for high quality investment calculators online, I found that the majority are just too simple. They either don’t allow you to input a recurring payment (such as monthly or quarterly), or they don’t take into account inflation, or they don’t allow you to differentiate what your returns would be between stocks and bonds, etc. Most of these online calculators just don’t have enough customization options to truly get a picture of what an individual’s future portfolio could look like. Therefore… they’re useless! Plain and simple! These calculators are about as good as a large pile of mierda.

So I wrote my own portfolio and retirement spreadsheet, and I made it customizable. Take a look at the input screen below. You’ll notice that it allows you to specify a payment frequency, as well as a growth rate. It will take into account your allocation between stocks and bonds, and the corresponding returns. It allows you to input an inflation rate. And best of all, it allows you to build up a projected portfolio value, and then analyze it using three different retirement approaches.

Hey all you financial fanatics!! By this point I hope you’ve read the first two parts of my little Getting Your Financial House in Order segment (Renegotiate/Cancel Everything and Budgeting). I hope you’re running a good and tight budget, scrutinizing all purchases, and learning to handle money like Yoda handles a light saber! Yeah…I just made a Star Wars reference. Don’t act like you don’t love it.

As you do start to build up savings, knowing what to do with the money is as important as initially saving it. For example,

• In the late 1990’s, you could have rushed out and invested in Beani Babies. That’s right!  Those plush little things were the biggest damn craze since sliced bread. What a debacle that was!
• Maybe you just love tigers and boxing. So why not follow in the footsteps of the Former Heavy Weight Ear Eating Champion Mike Tyson, and pick yourself up a few Bengal Tigers? That’s a great investment…..right?

If you read part I of the series, congratulations! It was seriously long; longer than I was envisioning as I wrote it. Apparently, the ideas just kept flowing, and you readers out there got to enjoy the rambling magic spewing forth from my mind. I promise, this post will be significantly shorter.

                                       So what do you do now that you’ve:

• Made the cable company cry by outright canceling (my preference) or renegotiating your rates?
• Verified that your cell phone plan is appropriate for your needs, and switched as necessary?
• Put the stake in any annual / monthly subscriptions not crucial to your long term financial independence?
• Began building a little disposable income to start working with?