I've been playing a lot with Excel lately. And by a lot I mean, it seems suck about 2 hours of my day every day for 3 days. And its nothing really constructive or impressive. I'm number crunching how I'm going to survive the next year or two given my questionable cash flow problems.
I do this via what I like to call a monthly cost schedule. On the vertical, I place the months-years. The first column after that is the events (for example build house, get renter, get salary increase. The next few are opening bank balance, salary, rental, tax, repayments and expenses. Finishes with net income and the closing cash balance. Sounds reasonable right? Seems to cover what I need to know...right?
The problem is I don't necessarily know whats correct or not, and whats reasonable and whats not. The great thing is Excel can tell me exactly what I want to believe based on the information I give it. The house will be built EXACTLY in six months like they say. Sure lets bring the rental and tax relief forward a few months. The car will cause 150$ in tax relief, sure lets cut tax by that much. I love it! I WANT to believe I can afford this, and this plan won't leave me scraping for the remaining out of a can of spam spam spammity spam spam
SHUTUP!
Diversion aside, the reality is this seriously a pile of crock. The reality of things is never that straight forward. When one is living on the bread-line as it maybe, its a dangerous game. I could be always solvent and on several grand by Oct 08, or be on -13,000$ by Oct 08, all depending on what happens. The latter isn't really that impossible to envisage. All you need is shitty tax relief and a bad renter and you've got an situation where there isn't really an easy way out.
However... using sensitivity analysis which I ALSO did in Excel, I should be perfectly right due to the relative spread of probabilities. After all, excel doesn't lie...
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