Is it possible to predict your financial future?

Jennifer Duncan

Jennifer Duncan

Financial Planner

There is evidence indicating that forms of fortune telling have existed since 4000 BC. How these fortunes are divined can be done through various mediums by reading someone’s palm or use of tarot cards, or my personal favourite of having your future determined by watching a rooster picking grain (known as Alectromancy).

Whilst I myself am wary of putting too much faith in my future being accurately foretold by the eating habits of a chicken, I understand the appeal of gaining a little insight into what might lie ahead.

Cashflow modelling is the financial planners equivalent of a crystal ball.

Now whether you believe in fortune telling or not will largely be a matter of faith, so in the world of finance where facts and figures reign supreme our forecasting must be based on a bit more than your financial planner’s divine ability to interpret the signs. To this end we draw on a wide-ranging use of historic data, from inflation, earnings, historic returns of asset classes and so on, to draw conclusions about what your financial future might look like.

In the same fashion that psychics do not seem to be able to pick this week’s lottery numbers, the exact figures will almost definitely not match this forecast and they are not the important part of this analysis. What is important is the overall pattern your finances are set to follow.

It can highlight periods of shortfall between income and expenditure, it can show whether your expenditure is sustainable over the long-term, it can gauge your capacity to cope with a market crash, it could tell you the long-term implications of making a large financial gift and almost all other conceivable financial outcomes.

By establishing the expected pattern of what your finances are likely to follow, it will then let us build hypothetical scenarios to see if any shortfall could be bridged through investment, address any protection gap in case of early mortality, establish whether you could afford to retire a bit earlier or any other myriad of hypothetical scenarios. The best part of this forecasting is that it is personal to you, there is no daily financial forecast for every Scorpio, Capricorn or Virgo telling you that whether you can retire early will be answered ‘when someone from your past unexpectedly gets in touch’. You get a personalised outcome that can be mapped through charts and graphs that will evolve over time with you as you continue along your financial journey.

This human desire to gain more insight into what the future might hold has been ongoing for the past 6,000 years, so by undergoing a fully interactive cashflow analysis and establishing a financial plan which is personal to you, you can be given a tangible hard-copy outcome for this financial future and offer you peace of mind about the long-term consequences of your financial decisions – Mystic Meg eat your heart out.

Get in touch

If you'd like to discuss any of the options discussed in this blog, please don't hesitate to get in touch with myself, a member of our Wealth team or your usual Johnston Carmichael adviser.


The content in this article is for information only and should not be seen as advice. Remember investments can go down as well as up and you may not get back the initial capital invested. Please seek independent advice prior to taking any action.