Strategic decision-making often requires you to estimate current and future quantities. Here’s a quiz to see how good you are at it. For each quantity below (2009 data unless noted otherwise), make your best guess. Don’t try to find the answers, just guess. World camel population Annual consumption of popped popcorn in the US (quarts) GNP … Continue reading How good are you at estimating?
Can you get fooled by random events? You bet you can. Here’s an interesting example, recounted by Daniel Kahneman in his book Thinking Fast and Slow. A survey of average student test scores at over 1600 schools focused in on the top 50. One item stood out. Of the 50 best schools, 6 were small. … Continue reading Are small schools better?
Excel’s pivot tables reorganize, categorize, and summarize your data dynamically however you want. Look at it one way, then in seconds, look at it another way. It has a lot of features, but the basics alone are powerful. Today I’ll show you how to use it on a simple example. Let’s take the example from … Continue reading A new view on your data: Pivot Tables
Have you ever been overwhelmed with data? How can you organize it? How can you make sense of it all? I’ve tried a lot of databases, and I keep coming back to Excel. The main reason is that databases are designed to give you fixed reports, and the whole thing is structured to give … Continue reading Dealing with data: Sort and Filter
I have $10,000 to invest over the next six years. I have a chance to buy equipment that will save me $2000 a year for five years and after that I could sell it for $3000. Looks like $3000 ahead! But before I jump into this, I should compare it with other investment opportunities. Maybe … Continue reading Which investment is better?
Once in a while I find myself with a lot of really good information that I'd like to use. Great! Put it into Excel. Not always so easy, even if it's already computerized. I ran across this recently in looking at Medicare payments for doctor visits. The mymedicare.gov site tells you everything about each of … Continue reading There’s a lot of data here, but how can I make sense of it?
Happy new year! This is a time for looking back and for looking ahead. How did you do financially this past year? Was it what you expected? What do you expect in the coming year, and the years ahead? If you could magically produce a spreadsheet that could help you look ahead, what would you … Continue reading What if you could visualize your financial future for the coming year?
When you can visualize your financial future using one of the spreadsheets I’ve included recently, it’s fun to put in some really high rate of return and watch your future self get rich. Before the great recession a few years ago, there were a lot of people touting 18% returns, and a lot more people … Continue reading Volatility is not your friend
Well, yes. Spending during retirement, or saving for retirement (or anything else, for that matter) is fraught with uncertainty. In my last post I featured a spreadsheet that randomly shows you possible year-by-year outcomes of a spending plan. If you invest $2 million at 4% with a standard deviation of 2.5%, it seems you can spend … Continue reading Welcome to Monte Carlo. Is retirement a gamble?
A couple posts back, I looked at how much you could spend each year if you retired with 2 million dollars invested at 4%. (Answer: About $80,000, increasing each year for inflation). But how do you know you can get 4% year-after-year for 30 or 40 years? You don’t. Any investment has good years and … Continue reading Investment returns are uncertain. How much savings do I really need to retire?