Financial Planning Program Automating Expense Derivation

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Solution Overview

Problem

Current financial planning programs are complex, time-consuming, and costly, requiring extensive data input from individuals, making it difficult for them to prepare detailed retirement plans, and often lack transparency in showing how financial components contribute to cash flow, leading to mistrust in report accuracy.

Innovation Solution

A computer program that simplifies data input by calculating monthly expenses from gross income, producing detailed year-by-year financial reports, and allowing adjustments, enabling individuals to prepare comprehensive financial plans efficiently and accurately, including identifying and correcting errors within a short time.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Reliability

If detailed financial data input is required to produce comprehensive retirement planning reports, then the reliability and completeness of the financial analysis is improved, but the time required for data entry and report preparation increases significantly

Engineering Contradiction:

Improveaccuracy of financial analysisVSAvoidreport preparation time

Core Design Contradiction:

ReliabilityVSLoss of time

Solution Approach 1:

The system performs preliminary calculations by working backwards from gross income to determine monthly expenses, eliminating the need for time-consuming manual data entry. This preliminary action establishes a baseline financial picture that can be quickly analyzed and adjusted, resolving the contradiction between comprehensive analysis and preparation time

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The invention extracts only the essential data element needed for financial planning - gross income - and derives all other financial metrics from this single input. By taking out the core necessary information and eliminating redundant data collection, the system maintains analytical reliability while dramatically reducing preparation time

Inventive Principle:

Principle #2Taking out (Extraction)

2Loss of information

If comprehensive financial details are provided in reports, then the transparency and believability of the analysis is improved, but the length and complexity of the reports increases

Engineering Contradiction:

Improvetransparency of financial breakdownVSAvoidreport length and structure

Core Design Contradiction:

Loss of informationVSDevice complexity

Solution Approach 1:

The report is segmented into clear hierarchical sections: summary-level metrics for quick understanding, followed by detailed year-by-year breakdowns of income, expenses, and cash flow. This segmentation allows users to access comprehensive financial transparency without being overwhelmed by a wall of text, maintaining both information completeness and report manageability

Inventive Principle:

Principle #1Segmentation

3Adaptability or versatility

If existing financial planning programs require extensive data input forms, then comprehensive financial coverage is achieved, but the ease of operation for individual users deteriorates

Engineering Contradiction:

Improvecomprehensive financial coverageVSAvoiduser input simplicity

Core Design Contradiction:

Adaptability or versatilityVSEase of operation

Solution Approach 1:

The system enables self-service financial planning by automatically calculating monthly expenses from gross income input, eliminating the need for users to manually complete extensive data forms. This self-service approach maintains comprehensive financial coverage while dramatically improving ease of operation for individual users

Inventive Principle:

Principle #25Self-service

Solution Approach 2:

Instead of requiring users to input detailed expense data and work forwards to determine retirement needs, the system inverts the approach by starting with gross income and working backwards to calculate expenses and retirement requirements. This inversion simplifies user input while maintaining comprehensive financial analysis

Inventive Principle:

Principle #13The other way round (Inversion)

Data Source

PatentUS7912771B2Financial planning document and process therefor

Publication Date: 2011.03.22 YOUNG ROBERT A

AI summary

A computer program that can be installed on a web server to assemble web pages that can be accessed over the Internet by password to prepare financial planning reports for a client. The program takes gross income, subtracts income taxes, subtracts all money put into savings programs, and whatever is left is what the client spends in a given year or month. It further itemizes and subtracts the monthly payments for debt service since these items will be fully amortized or paid off at some point in the future and should not be included in baseline living expenses that will continue through a person's lifetime. The balance left after these calculations are completed represents the individual's current annual living expenses or standard of living that needs to be sustained throughout their lifetime with adjustments for inflation. The program can produce three major reports: (1) an income and expense report; (2) an asset and liability report or balance sheet; and (3) a cash flow report that shows all of items that impact cash flow on a year by year basis throughout the rest of the individual or client's lifetime. If there are cash flow shortfalls in any year, the program uses a two step present value calculation to determine how much the individual would need in a lump sum today or contribute monthly or annually to provide sufficient funds in the year needed to fill the shortfall.