Methodology
Our tools are built on transparent, assumption-driven simulations—not black-box outputs. You see the inputs; you see how results are generated. This page explains our approach so you can use the numbers with confidence.
Core principles
- Real-world modeling. We model decisions the way money actually moves: income, expenses, and time.
- Your inputs, your scenario. Results are driven by what you enter—we don't hide or guess your situation.
- Scenario comparison. Where it helps, we let you compare options side by side (e.g., rent vs. buy, before vs. after).
- Clarity over false precision. We'd rather show a clear, understandable range than pretend to predict the future exactly.
- Assumptions in the open. Defaults (returns, inflation, taxes) are stated so you can adjust or question them.
- Explore, test, and challenge. We give you tools to explore scenarios, test your own assumptions, and challenge conventional wisdom—so you can decide what makes sense for you.
How the calculations work
We don't use heavy formulas or proprietary engines. High level, here's what's going on under the hood.
Cash flow modeling
Money in and money out over time. We add income, subtract expenses, and track what's left. That "leftover" can be saved, invested, or used to pay down debt—depending on the tool.
Growth and compounding
When a tool projects savings or investments into the future, we apply inflation-adjusted growth period by period. Returns compound over time the way real accounts do—no magic, just consistent math.
Event modeling
Big one-off events (e.g., a down payment, a raise, a move) are modeled as happening at a point in time. The simulation then continues with the new numbers so you can see the impact.
Time-based simulation
We step through months or years, applying your inputs and assumptions at each step. That gives you a timeline of outcomes—not a single number that hides how you got there.
Key assumptions
Every simulator needs assumptions. Ours are grouped below. We're transparent about simplifications—real life is messier than any model.
Investment returns
We use real (inflation-adjusted) return assumptions by default. That keeps long-run projections in today's buying power. Where a tool lets you change the rate, it's clearly labeled.
Inflation
A single inflation rate is applied to costs and (where relevant) income over time. We don't model spikes or deflation—just a steady, stated rate so you can see how it affects outcomes.
Taxes
Tax treatment is simplified. We use representative rates (federal/state) or brackets where the tool supports it. We do not replicate every deduction, credit, or edge case—so treat tax-related results as illustrative, not a substitute for a tax pro.
Real estate (where applicable)
Tools that compare rent vs. buy or model homeownership use assumptions about appreciation, maintenance, and transaction costs. Those defaults are disclosed in the tool; you can usually adjust them to better match your market.
Income growth
When we project income over many years, we may apply a default growth rate (e.g., cost-of-living bumps). You can often override this so the scenario reflects your own expectations.
What these tools are (and aren't)
Not financial advice
Our tools are for education and exploration. They are not a substitute for professional financial, tax, or legal advice tailored to your situation.
Not exact predictions
The future is uncertain. We show plausible outcomes based on your inputs and our assumptions—not guarantees. Use the results to compare options and see tradeoffs, not as forecasts.
Decision-support tools
They are designed to help you think through decisions: "What if I get a 5% raise?" or "How does rent vs. buy look over 10 years?" Clear inputs and transparent logic so you can stress-test and compare with confidence.
Tool-specific notes
The same philosophy applies across tools, but the mechanics adapt. A few examples:
- Pay raise calculator
Pure arithmetic: your current pay plus a percentage or flat raise, then broken out by pay period. No assumptions—just your numbers.
- Rent vs. buy (and similar simulators)
Cash flow and time-based: we model rent payments, ownership costs, appreciation, and opportunity cost over a horizon you choose. Assumptions (rates, growth, taxes) are listed in the tool.
- Retirement / FIRE-style tools
Savings and withdrawals over time, with growth and inflation. Often include scenario bands (e.g., optimistic vs. conservative) so you see a range, not a single line.
Each tool's UI calls out the main assumptions it uses. When in doubt, open the inputs and adjust them to match your view of the world.
A bit more detail
Why we prefer transparency over "smart" defaults
It's tempting to hide assumptions and show one "best" number. We'd rather you see the knobs. When you change a return rate or time horizon, you learn how sensitive the result is—and that's more valuable than a false sense of precision. Our defaults are reasonable starting points, not recommendations.
How we handle "real return" in projections
Real return means we subtract inflation from nominal growth so dollar amounts are in today's purchasing power. That way a "$1M in 20 years" result is comparable to today's dollars, not future inflated ones. Tools that use nominal returns say so and often let you switch to real for clarity.