Cashflow modelling to show you the money

Cashflow modelling exists to literally ‘Show [you] the money!’ Remember that old film about the ethical sports agent, Jerry Maguire? He must get his only client a big new deal and yelling ‘Show me the money’ pumps him up to achieve that. (Spoiler alert: it all ends well). We think about this now and again because it’s not a million miles from what we do – with less shouting and a lot more financial modelling.

Working back to the start line

We sat down opposite one of our clients.

Early 30s. Entrepreneur. Introverted, impressive. At last finding time to think about money.

Client: “I want to have enough to retire comfortably.”

Us: “That’s great. Let’s think deeper.”

What we really need, always, is a detailed picture of what’s coming in and going out.

This is the start line. Our client’s imagined future is the finish line. And with those two poles mapped out, we can plan their wealth journey for them.

Financial cartography

The more specific you are about all this, the more we can help you.

That’s because the clearer the starting point, the more solid our platform to unleash all our modelling, all our experience and all our best ideas.

This modelling is the sort of financial plumbing you don’t really see as a client – until the final models are ready to present. But – like all good plumbing – you’d soon realise if it wasn’t working properly.

We call it cashflow modelling.

It helps as a financial planner to chart the route backwards from the future to now. It also helps you as a client to visualise what your journey looks like, rather than sit in the dark.

Bending with the wind

Bad things happen, unfortunately. You have a 50/50 chance of getting cancer. If you married in the last 15 years, you have up to a 16.8% chance of divorce. The business ‘death rate’ is about 11%.

All these and more will inevitably affect you and your money.

As you might expect, we use an application that plans your wealth journey around these real-life events before, during, and after they happen. It means your money is ready for every “what if?” scenario.

That’s why cashflow modelling is flexible – and we review it regularly, to make sure you’re on track.

So, if you want to look at the impact of an impending divorce settlement – or what might happen in the case of serious illness – we can adjust the model to see what might happen to your wealth.

Then you know if you can retire comfortably – or if you need to adjust the money you invest, the way you invest, or when you retire.

Of course, good things happen too. The process adjusts for that as well – if you want to retire early, buy a bigger house, or travel more.

Clarity and control

It’s worth saying that this is a model. It’s not a copper-bottomed prediction.

That’s why we review your money regularly, to consider any changes in your life and your wealth goals.

It also helps us to differentiate between what’s essential, and what’s nice to have.

Going back to our impressive client, we ended up with a detailed picture of what mattered most to her.

We devised a plan to achieve and protect what matters most. It’s designed to give her financial clarity and control.

It’s what Jerry Maguire craved when he declared “show me the money!”. And I think it’s what we all crave.

If you think we can help you set your goals and then move towards them with confidence, do get in touch. You can find us at hello@firstwealth.co.uk or 020 7467 2700.

[1] https://www.nhs.uk/conditions/cancer/#:~:text=Cancer%20sometimes%20begins%20in%20one,of%20cancer%20during%20their%20lifetime.

[2] https://ourworldindata.org/marriages-and-divorces

[3] https://startups.co.uk/analysis/small-business-statistics/#:~:text=How%20many%20UK%20business%20failures,death%20rate%20of%20almost%2011%25.

This document is marketing material for a retail audience and does not constitute advice or recommendations. Past performance is not a guide to future performance and may not be repeated. The value of investments and the income from them may go down as well as up and investors may not get back the amount originally invested.