How do I model recurring purchases that happen every 5 or 10 years, such as a car?
You may have some large recurring purchases that recur on a regular basis throughout your life and therefore, your ProjectionLab plan. For example, you plan to buy a new car every 10 years.
If you already have a car purchased within Current Finances, follow the steps in this section.
Let’s say you plan to sell your current car and buy a new one immediately, then you plan to purchase another new car every 10 years starting in June 2028.
First, create a Milestone in your plan by going to Settings > Milestones > scroll down to + Add Milestone > rename this New Car Purchase > set date to Jun 2028.
For this example, we will name your current vehicle, Car. If you are on the Plan page, scroll down below the graph > go to the Real Assets section > click on your Car > at the top of the pop up Expand Sections by clicking on the up and down-facing arrows. Scroll down to the Sale section and set Timing to Next Car Purchase.
The next step will also take place on the Plan page, scroll down below the graph > go to the Real Assets section > + Add Real Asset > click Car > rename to Next Car Purchase > set Purchase Date to Next Car Purchase milestone > go to Sale, Timing and set to Next Car Purchase then click the dot to the left of the down facing arrow and choose 10 years after Next Car Purchase.
Scroll down to the section called Recurrence and toggle Repeat on to create a pattern of similar events at regular intervals. Once you toggle this on, a few other inputs will appear.
- Years Between – input a number for years after sale before the next begins. If you plan to buy a car as soon as you sell your previous car, put 0.
- Scaling – adjust the amount up or down with each recurrence. For example, let’s say you’re going to buy a slightly more expensive car with each purchase you could increase this by 5%. Note that the 5% will be in addition to any inflation adjustment. Scaling would be a great way to denote a material change in the quality or value of the replacement vehicle.
- Until – when to stop creating new instances. This can be attached to a Milestone, such as your retirement, your life expectancy or a specific month and year.
- Keep the Last One – this will allow you to keep the final purchase instead of selling it
Note
Recurrence patterns can currently only be defined for “new” items added to your plans, rather than items you already own as part of the starting conditions within the plan. The simulation engine needs to know exactly how future instances should be financed.
Related
Disclaimer: The content, tools, and resources on ProjectionLab.com are intended solely for informational and educational purposes and should not be construed as professional financial or investment advice. Our materials are designed to provide general guidance and are based on the input and data provided by users. ProjectionLab makes no guarantee of the accuracy, completeness, or applicability of this content to individual circumstances. Effective financial planning and investment involve comprehensive consideration of a wide array of personal financial factors. The tools and resources available on ProjectionLab are aimed at helping users develop an understanding of their financial trajectory. However, they should not be solely relied upon for creating a complete financial plan. We strongly recommend consulting a financial services professional who can provide personalized advice based on your unique financial situation before making any significant financial decisions. While we endeavor to keep the information on ProjectionLab current and accurate, the content may differ from that found on other financial institutions, service providers, or specific product sites. All content and tools on ProjectionLab are provided without any guarantees or warranties of any kind.