Budgeting Project Proposal Dakota Wixom Quantitative Finance - - PowerPoint PPT Presentation

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budgeting project proposal

Budgeting Project Proposal Dakota Wixom Quantitative Finance - - PowerPoint PPT Presentation

Feb 18, 2024 9 likes •207 views

DataCamp Introduction to Financial Concepts in Python INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON Budgeting Project Proposal Dakota Wixom Quantitative Finance Analyst DataCamp Introduction to Financial Concepts in Python Project Proposal

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DataCamp Introduction to Financial Concepts in Python

Budgeting Project Proposal

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

Dakota Wixom

Quantitative Finance Analyst

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DataCamp Introduction to Financial Concepts in Python

Project Proposal

Your budget will have to take into account the following: Rent Food expenses Entertainment expenses Emergency fund You will have to adjust for the following: Taxes Salary growth Inflation (for all expenses)

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DataCamp Introduction to Financial Concepts in Python

Constant Cumulative Growth Forecast

What is the cumulative growth of an investment that grows by 3% per year for 3 years?

In [1]: import numpy as np In [2]: np.cumprod(1 + np.repeat(0.03, 3)) - 1 Out [2]: array([ 0.03, 0.0609, 0.0927])

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DataCamp Introduction to Financial Concepts in Python

Forecasting Values from Growth Rates

Compute the value at each point in time of an initial $100 investment that grows by 3% per year for 3 years?

In [1]: import numpy as np In [2]: 100*np.cumprod(1 + np.repeat(0.03, 3)) Out [2]: array([ 103, 106.09, 109.27])

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DataCamp Introduction to Financial Concepts in Python

Let's build it!

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

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DataCamp Introduction to Financial Concepts in Python

Net Worth and Valuation in Your Personal Financial Life

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

Dakota Wixom

Quantitative Finance Analyst

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DataCamp Introduction to Financial Concepts in Python

Net Worth

Net Worth = Assets - Liabilities = Equity This is the basis of modern accounting A point in time measurement

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DataCamp Introduction to Financial Concepts in Python

Valuation

NPV(discount rate, cash flows) Take into account future cash flows, salary and expenses Adjust for inflation

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DataCamp Introduction to Financial Concepts in Python

Reaching Financial Goals

Saving will only earn you a low rate of return Inflation will destroy most of your savings over time if you let it The best way to combat inflation is to invest

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DataCamp Introduction to Financial Concepts in Python

The Basics of Investing

Investing is a risk-reward tradeoff Diversify Plan for the worst Invest as early as possible Invest continuously over time

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DataCamp Introduction to Financial Concepts in Python

Let's simulate it!

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

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DataCamp Introduction to Financial Concepts in Python

The Power of Time and Compound Interest

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

Dakota Wixom

Quantitative Finance Analyst

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DataCamp Introduction to Financial Concepts in Python

The Power of Time

Goal: Save $1.0 million over 40 years. Assume an average 7% rate of return per year. What if your investments only returned 5% on average?

In [1]: import numpy as np In [2]: np.pmt(rate=((1+0.07)**1/12 - 1), nper=12*40, pv=0, fv=1000000) Out [2]: -404.61 In [1]: import numpy as np In [2]: np.pmt(rate=((1+0.05)**1/12 - 1), nper=12*40, pv=0, fv=1000000) Out [2]: -674.53

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DataCamp Introduction to Financial Concepts in Python

The Power of Time

Goal: Save $1.0 million over 25 years. Assume an average 7% rate of return per year. What if your investments only returned 5% on average?

In [1]: import numpy as np In [2]: np.pmt(rate=((1+0.07)**1/12 - 1), nper=12*25, pv=0, fv=1000000) Out [2]: -1277.07 In [1]: import numpy as np In [2]: np.pmt(rate=((1+0.05)**1/12 - 1), nper=12*40, pv=0, fv=1000000) Out [2]: -1707.26

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DataCamp Introduction to Financial Concepts in Python

Inflation Adjusting

Assume an average rate of inflation of 3% per year

In [1]: import numpy as np In [2]: np.fv(rate=-0.03, nper=25, pv=-1000000, pmt=0) Out [2]: 466974.70

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DataCamp Introduction to Financial Concepts in Python

Let's practice!

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

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DataCamp Introduction to Financial Concepts in Python

Financial Concepts in Your Daily Life

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON

Dakota Wixom

Quantitative Finance Analyst

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DataCamp Introduction to Financial Concepts in Python

Congratulations

The Time Value of Money Compound Interest Discounting and Projecting Cash Flows Making Rational Economic Decisions Mortgage Structures Interest and Equity The Cost of Capital Wealth Accumulation

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DataCamp Introduction to Financial Concepts in Python

Congratulations!

INTRODUCTION TO FINANCIAL CONCEPTS IN PYTHON