Financial Models

Most of the complex data that we see around us can be simplified to fit into simple models. These models are long-term, predictive, simple and can help us make useful decisions. As simplistic as this may sound, this is very significant. Imagine you want to save a million rands, this is actually achievable, if you follow a simple model, and you're disciplined enough to stick to it.

In the financial sense, the most useful model of getting rich is the one that revolves around setting aside 10% of all gross income that you make in a year. If you take this amount, say from the age of 13 years, and deposit it in a bank account that earns you at least more than 10% per annum, the resulting balance, if you do this every year, is staggering. Assuming you can do this for 27 years, up until you turn 40 years old, you get a large balance. A balance that's large enough to allow you to retire handsomely.

The point is with simple enough models you can model any financial goal (or problem) and achieve it (or solve it).