This model uses Monte-Carlo simulation to project the performance of a college fund, taking into account a mix of various asset classes (stocks, bonds, cash), along with taxes. Cash is deposited in a savings account at a bank, which is considered to be the college fund. A separate money market holds money invested in stocks and bonds. You can vary the asset allocation over time, and see how it affects the likelihood of success.
When the student is attending college, tuition payments will be made from the college fund. Stocks and bonds will be sold from the money market to help pay the tuition. If all money has run out, the simulation is considered unsuccessful and the student goes into debt. If money never runs out (Fund > 0$) during the simulation, then it is a success as indicated on the dashboard.
Note that this model is only an example and has some limitations, so please don't use it to make critical decisions that affect your child's future! In particular, bond and money market returns over time are not realistic, nor are correlations between the various asset classes used.
To determine the likelihood that there will be money left over after your child does not accrue debt, use the probability distribution button on the dashboard to view the statistics on the account value at the end of the simulation.
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