Method, system and computer program for auditing financial plans

• US 20020082965A1
• Filed: 07/27/2001
• Published: 06/27/2002
• Est. Priority Date: 11/05/1998
• Status: Active Grant

• Current Assignee: Wealthare Capital Management IP LLC
• Original Assignee: David B. Loeper
• Inventors: Loeper, David B.
• Granted Patent: US 7,562,040 B2
• Time in Patent Office: Days
• US Class Current: 705/36
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/06 Asset management; Financial planning or analysis

Abstract

A method for evaluating a financial plan, including a predetermined initial values of investments and one or more contribution or withdrawal amounts corresponding to selected times after the commencement of the financial plan, includes the steps of calculating the change in a predetermined initial value of an investment over a time interval based on changes in value over a randomly-selected first historical time interval to obtain a changed investment value, updating the changed investment value based on the selected contribution or withdrawal amount corresponding to the length of the time interval in accordance with the financial plan to obtain a further changed investment value, calculating the change in the further changed investment value over a second time interval based on changes over a randomly-selected second historical time interval to obtain a further investment value, repeating the steps of calculating, updating and again calculating with respect to a randomly-selected third historical time interval and a randomly-selected fourth historical time interval, respectively.

Claims

1. A method for evaluating a financial plan including predetermined initial values of investments and one or more contribution or withdrawal amounts corresponding to selected times after the commencement of the financial plan, comprising the steps of:

calculating the change in a predetermined initial value of an investment over a time interval based on changes in value over a randomly-selected first historical time interval to obtain a changed investment value;

updating the changed investment value based on a selected contribution or withdrawal amount corresponding to the length of the time interval in accordance with the financial plan to obtain a further changed investment value; and

calculating the change in the further changed investment value over a second time interval based on changes over a second historical time interval, said second historical time interval being randomly-selected independent of said first historical time interval, to obtain a second changed investment value, and

repeating said steps of calculating, updating and again calculating with respect to a third historical time interval and a fourth historical time interval, respectively, said third historical time interval and said fourth historical time interval being selected randomly.

2. The method of claim 1, further comprising the step of presenting the result of said steps to an individual.

3. The method of claim 1, wherein said investments are categorized in more than one asset category, and distinct historical data is employed in calculations for each of said asset categories.

4. The method of claim 1, wherein the results of said calculation are compared to a selected financial goal.

5. The method of claim 1, wherein, after each calculation relative to historical data, an adjustment of the investment value to simulate tax effects is made.

6. The method of claim 1, further comprising the step of prompting a user to enter the intial investment value, and allocations to asset categories.

7. The method of claim 1, wherein the steps of calculating results over a first historical interval are repeated for at least twenty randomly-selected historical intervals.

13. The system of claim 7, further comprising means for prompting a user to enter the intial investment value, and allocations to asset categories.

8. A system for evaluating financial plans including predetermined initial values of investments and one or more contribution or withdrawal amounts corresponding to selected times after the commencement of the financial plans, comprising:

means for calculating the change in a predetermined initial value of an investment over a time interval based on changes in value over a randomly-selected first historical time interval to obtain a changed investment value;

means for updating the changed investment value in accordance with contribution or withdrawal amounts from based on said selected amount and time to obtain a further changed investment value;

means for calculating the change in the further changed investment value over a second time interval based on changes over a randomly-selected second historical time interval to obtain a further investment value, and

means for further calculating, updating and again calculating with respect to a third historical time interval and a fourth historical time interval, respectively; and

means for after at least one of the calculations, adjusting the investment value based on at least one of a contribution amount and a withdrawal amount.

9. The system of claim 8, further comprising means for presenting the result of said steps to an individual.

10. The system of claim 8, further comprising means for categorizing said investments in more than one asset category, and for employing distinct historical data in calculations for each of said asset categories.

11. The system of claim 8, further comprising means for comparing the results of said calculation to a selected financial goal.

12. The system of claim 8, further comprising means for, after each calculation relative to historical data, adjusting the investment value to simulate tax effects.

15. The storage medium of claim 14, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the further step of presenting the result of said steps to an individual.

16. The storage medium of claim 14, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the further step of, for investments categorized in more than one asset category, employing distinct historical data is employed in calculations for each of said asset categories.

17. The storage medium of claim 14, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the further step of comparing the results of said calculation to a selected financial goal.

18. The storage medium of claim 14, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the further step of, after each calculation relative to historical data, adjusting the investment value to simulate tax effects.

19. The storage medium of claim 14, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the further step of prompting a user to enter the intial investment value, and allocations to asset categories.

14. A storage medium having stored therein a plurality of instructions, wherein the plurality of instructions, when executed by a processor, cause the processor to perform the steps of:

calculating the change in a predetermined initial value of an investment over a time interval based on changes in value over a randomly-selected first historical time interval to obtain a changed investment value;

updating the changed investment value based on one or more contribution or withdrawal amounts set forth in a financial plan corresponding to selected times after the commencement of the financial plan to obtain a further changed investment value; and

calculating the change in the further changed investment value over a second time interval based on changes over a randomly-selected second historical time interval to obtain a further investment value, and

repeating said steps of calculating, updating and again calculating with respect to a randomly-selected third historical time interval and a randomly-selected fourth historical time interval, respectively.