This application offers budgeting and financial planning services to customers by generating reports that links to their banking and investment accounts and automatically refreshes the data and charts on login. However, some of the calculations are tricky, To connect the accounts and simulate the retirement investment projections. I have generated a Plaid API and Alpaca API to obtain account transactions and fetch retirement portfolio prices.

Included in this repo is a budgest analysis with Plaid, a retirement planner and a financial report summarizing the results.

The budget analysis uses the Plaid API to obtain transaction and account data. The following steps outlined below were performed to produce the report

1. Generate a Plaid access token to access the Developer Sandbox.

2. Use the Access token to fetch account transactions from the sandbox. Fetch the last 90 days of transactions from the sandbox.

3. Perform basic budget analysis on the sandbox transaction and generate plots for the following:

   • Spending Categories Pie Chart.

   

   • Spending Per Month Bar Chart.

   

4. Use the API to fetch income data from the sandbox and print the following:

   • Last Year's Income Before Tax.

   • Current Monthly Income.

   • Projected Year's Income Before Tax.

In this section, the Alpaca API was used to fetch historical closing prices for a retirement portfolio. Then I ran a Monte Carlo simulations to project the portfolio performance at 30 years. The following steps outlined below were performed to produce the report

1. Use the Alpaca API to fetch historical closing prices for a traditional 60/40 portfolio using the SPY and AGG tickers to represent the 60% stocks (SPY) and 40% bonds (AGG).

2. Run a Monte Carlo simulation of 500 runs and 30 years for the 60/40 portfolio and plot the results.

   

3. Select the ending cumulative returns from the Monte Carlo simulation and calculate the interval values for a 90% confidence interval.

4. Using the ending cumulative returns, plot a histogram of the results and plot the 90% confidence interval as vertical lines on the histogram.

   

In the Financial Planner .md, you will find the following sections:

1. Budget Analysis: A Summary of the transaction data from the budget analysis and images for each chart and table produced.

2. Retirement Planning: A Summary of the retirement portfolio analysis and the charts for the Monte Carlo simulation.

Using the Monte Carlo simulation we are able to answer the following questions. You can view the answers in the Financial Planner Summary .md

1. What are the expected cumulative returns at 30 years for the 10th, 50th, and 90th percentiles?

2. Given an initial investment of $20,000, what is the expected return in dollars at the 10th, 50th, and 90th percentiles?

3. Given the current projected annual income from the Plaid analysis, will a 4% withdrawal rate meet or exceed that value at the 10th percentile? Note: This is basically determining if retirement income is equivalent to current income.

4. How would a 50% increase in the initial investment amount affect the 4% retirement withdrawal? In other words, what happens if the initial investment had been bigger?

5. (Optional Challenge +5 bonus points) Use the Monte Carlo data and calculate the cumulative returns at the 5%, 50%, and 95% quartiles and plot this data as a line chart to see how the cumulative returns change over the life of the investment.

   

Harold is impressed with your work on this planner, but thinks that 30 years seems like a very long time to wait to retire! Harold wants to know if the retirement plan could be adjusted to retire earlier than normal. Try adjusting the portfolio to either include more risk (a higher stock than bond ratio), or to have a larger initial investment and then rerun the retirement analysis to see what it would take to retire in 5 years, instead of 30!

• Plaid API Docs

• AlpacaDOCS