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Question: Incorporating inflation in monte carlo model
Old 05-03-2017, 06:16 PM   #1
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Question: Incorporating inflation in monte carlo model

Question for the collective...

I've developed a personal spreadsheet over the last few years that uses monte carlo simulation to model different return scenarios and variance assumptions. I used monte carlo as part of the engineering design process while I was working, so I have experience with it...and I'm a spreadsheet nerd.

My question is how do I include inflation and assumed variance in my model?

- Do I include it simply as another variance that erodes my overall returns assumption?
- Do I include it as an erosion to portfolio withdrawal only? OR
- Do I include it as an inflation added to my returns calculation only? OR
- Some combo/something else I'm missing...?

Hopefully that makes sense. Thanks.
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Old 05-04-2017, 03:44 AM   #2
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Here is a wealth of "Gummy Stuff" that might interest you. He covered a lot of ground in his Excel models.

https://www.gummy-stuff.org/Excel/
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Old 05-05-2017, 11:02 PM   #3
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Quote:
Originally Posted by target2019 View Post
Here is a wealth of "Gummy Stuff" that might interest you. He covered a lot of ground in his Excel models.

https://www.gummy-stuff.org/Excel/
Holy crap, where do I start? Thanks I guess...
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Old 05-06-2017, 11:47 AM   #4
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Originally Posted by Hexanova View Post
Holy crap, where do I start? Thanks I guess...[emoji23]
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