FireCalc = Monte Carlo simulator

DW · 11-14-2006, 11:47 AM

http://www.fpanet.org/journal/betwee...ays/071506.cfm

This article in the FPA Journal analyzes the results of FireCalc as an example of a Monte Carlo simulator. I guess I don't know enough about the inner workings of FireCalc. Does it actually perform a Monte Carlo analysis?

dory36 · 11-19-2006, 07:46 PM

The author points out that FIRECalc uses historical, not random data. But for all practical purposes, yes, it's a Monte Carlo calculator. The historical data is certain not to repeat, but it serves as a useful proxy for random numbers that are "realistic" because we don't have to make assumptions about year-to-year correlations (etc.) that are needed for a good monte carlo tool.

11-14-2006, 11:47 AM	#1
DW Dryer sheet wannabe Join Date: Oct 2005 Posts: 20	FireCalc = Monte Carlo simulator http://www.fpanet.org/journal/betwee...ays/071506.cfm This article in the FPA Journal analyzes the results of FireCalc as an example of a Monte Carlo simulator. I guess I don't know enough about the inner workings of FireCalc. Does it actually perform a Monte Carlo analysis?

11-19-2006, 07:46 PM	#2
dory36 Early-Retirement.org Founder Developer of FIRECalc Join Date: Jun 2002 Posts: 1,823	Re: FireCalc = Monte Carlo simulator The author points out that FIRECalc uses historical, not random data. But for all practical purposes, yes, it's a Monte Carlo calculator. The historical data is certain not to repeat, but it serves as a useful proxy for random numbers that are "realistic" because we don't have to make assumptions about year-to-year correlations (etc.) that are needed for a good monte carlo tool. __________________ Often uninformed, seldom undecided. Twenty years from now you will be more disappointed by the things you didn't do than by the ones you did do. So throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover. Mark Twain

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