Wealth Simulator

A Python-based personal finance simulation tool that helps project future wealth based on various income, expense, and investment parameters. It accounts for inflation, taxes, major life events (buying a home, having children), and market returns.

It is designed for a similar-age couple living in California, United States, currently renting their residence.

Requirements

• Python 3.x
• numpy
• matplotlib

Install dependencies using:

pip install -r requirements.txt

How to Run

1. Open config.py.
2. Edit the CONFIG dictionary at the top of the file to match your personal financial situation and assumptions.
3. Run the script:

python wealth_simulator.py

4. The script will generate a plot showing your projected wealth over time, named `wealth_simulation.png' in this directory.

Configuration Guide

The CONFIG dictionary in config.py contains all the tunable parameters for the simulation:

Basic Information

• start_age: Age at the start of the simulation.
• end_age: Age at which the simulation ends.
• retire_after_years: Number of years from start until retirement.
• current_wealth: Total initial liquid assets (cash + stocks).
• current_annual_salary: Current gross annual income.

Economic Factors

• annual_raise_percent: Expected annual salary increase percentage.
• annual_inflation_percent: The annual inflation rate applied to costs and tax brackets.
• stock_annual_return_percent: Expected annual return on stock investments.
• savings_annual_return_percent: Expected annual return on safe savings.

Asset Allocation

• wealth_in_stock_percent: Percentage of portfolio allocated to stocks.
• wealth_in_saving_percent: Percentage of portfolio allocated to savings (should sum to 100 with stock %).

Expenses

• current_annual_cost: Base annual living expenses (excluding rent and specific items below).
• current_rent_monthly: Current monthly rent.

Family Planning

• add_child_in_x_years: List of years from now when a child is born (e.g., [1, 4]).
• child_duration_years: Number of years a child is a financial dependent.
• annual_child_cost: Annual cost per child (adjusted for inflation).

Real Estate

• buy_x_dollar_home_in_y_years: List of tuples (Price, YearsFromNow) representing planned home purchases.
• annual_home_price_increase_percent: Expected annual appreciation of home value.
• property_tax_base_percent: Property tax rate as a percentage of assessed value.
• prop13_assessment_increase_cap: Cap on annual property tax assessment increase (relevant for California prop 13).
• mortgage_rate_percent: Annual mortgage interest rate.
• mortgage_term_years: Length of the mortgage in years.
• home_down_payment_percent: Down payment percentage.
• home_maintenance_percent: Annual maintenance cost as a % of home value.
• home_insurance_percent: Annual insurance cost as a % of home value.
• home_transaction_fee_percent: Costs associated with buying/selling property.

Vehicles

• current_car_value: Current market value of your car.
• current_car_age: Age of your current car.
• annual_car_value_decrease_percent: List of tuples defining depreciation rates based on car age.
• buy_x_dollar_car_in_y_years: List of planned car purchases (Price, YearsFromNow).
• car_insurance_maintenance_annual: Annual cost for car insurance and maintenance.

Retirement & Taxes

• retirement_medical_annual: Estimated annual out-of-pocket medical costs in retirement.
• capital_gains_tax_fed: Federal capital gains tax rate.
• capital_gains_tax_state: State capital gains tax rate.