Family Financial Application

Calculate future cashflow via time value of money

• Build Excel table (pandas DataFrame) base on expense and income
• Run optimization on the rate of return from investment porofolio and the raising rate of salary
• Estimate and set the Family Financial Goal in a Financial Statements(.xlsx)

Algorithm

1. Inflation and Investment

   All of our money will deflate, meaning that 100 unit of currency will worth less in the future.

   To prevent the deflation of our money. we need to invest our money into different baskets to gain excess yield, such as bond, stock, bank deposit, insurance and etc. And we call those baskets to be your investment portfolio.

    Here we discount all the future cashflow to now 
    with inflation rate of 5% 
   

2. Expense

   Calculate the future expenses with escalation rate

    Besides necessary living expenses (food, housing), 
    we also introduce unavoidable expenses like:
    recreation, wedding, car, house and etc.  
    
    But the living expense is not fixed, 
    we always want a more quality life, 
    hence we also set a annual escalation rate of 5% 
    to represent the "upgrading" of our life.
   

3. Income

   Fix income coming from work

   There will always be a ceil for fix income coming from work,
   so we set a ceiling income.

   The remainging question is, when will we meet the ceiling?

    We Calculate the raising rate of salary 
    using COBYLA optimazation algorithm 
    (same for rate of return from investment portfolio)