What makes a good business? Part 3 of the IRR trilogy

This post was inspired by reading a Quora response where the child of a top 1% family says that one of the advantages of his upbringing is that his parents taught him about how business works. “Business” is a somewhat broad term that some schools say takes two years and $120k in tuition to “master”. However, as we typically do in this blog, we can educate ourselves on some of the central concepts of business on our own through spreadsheets!

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Our hope is that anyone with internet access can find this page and play around with spreadsheets to begin to think about what makes a good business. Now if only this site could also provide the exotic travel experiences, connections, and the ability to take risks with a safety net that growing up in the 1% also provides… Continue reading “What makes a good business? Part 3 of the IRR trilogy”

Make a Buy vs Rent calculator spreadsheet

Is it better to buy or rent a house? Advice on this problem comes in all shapes and sizes, from the dogmatic idea that homeownership is the American dream, to some more nuanced methods like calculating the price to rent ratio. What would you do if you found a great house and are deciding whether to buy it or keep on renting? *Note: We’ve updated this analysis and spreadsheet, given changes in the economics of housing due to the Tax Cuts and Jobs Act from late 2017. For the latest, please see A 2019 update of our House Rent vs Buy IRR Spreadsheet

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Is medical school “worth it”? An introduction to Internal Rate of Return (“IRR”)

Finance hiring is down, law school grads are having a tough time finding real law jobs, so what is an ambitious but risk averse college student to do with his or her life these days? Okay, right now the answer is computer science. Yes seriously, do computer science. But let’s pretend it is the year 2001 and the only other option respectable option is medical school. But doesn’t med school take a lot of time (4 years school plus 3-7 years residency/fellowship) and cost a lot of money? How can we figure out if going to med school and not earning doctor money until 7 years from now is worth it financially relative to just entering the workforce and working for those 7 years? Continue reading “Is medical school “worth it”? An introduction to Internal Rate of Return (“IRR”)”

How to analyze a nonprofit Form 990 with a spreadsheet

“The more you give, the more you get, that’s being alive” – The Money Song, Avenue Q

Charitable giving serves a valuable purpose  in  our society. It allows organizations in health, education, social services and others to provide benefits to people who otherwise couldn’t afford them. It allows people who have built up wealth to give back and make a difference. The federal government even subsidizes charitable giving by allowing donations to be deducted from income reported for taxes (effectively kicking in up to 39.6% of each donation). It’s a great system that is meant to fund those people and organizations in need. At least that is how it should be. Continue reading “How to analyze a nonprofit Form 990 with a spreadsheet”

Build a Spreadsheet to help you choose a healthcare plan

Will you save more with standard PPO or a high-deductible PPO Saver plan with a Health Savings Account?

It is currently Open Enrollment season at many workplaces, which is when employees choose their medical insurance and other benefits plans for the upcoming year. It’s also the time of year when people grumble “why is the US healthcare system so complicated” and just elect whatever plan they had in the prior year. Building a spreadsheet can help someone compare the costs and benefits of each of the plans under a variety of different assumptions about tax rate and healthcare expenditure. Continue reading “Build a Spreadsheet to help you choose a healthcare plan”

Top 3 Spreadsheets You Need (but Never Knew!)

TechsmithWorAEA6.pngLook no further! Whether you are a traveler, student, teacher, parent, or coach, here are our top 3 spreadsheets that can benefit you. Select any choice below to access both our spreadsheet and video tutorial.

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Improve Decision-Making with Spreadsheets

Spreadsheets are a framework for evaluating choices! Which brand of jeans should I buy? Which restaurant should we go? To which colleges should I apply? In our tutorial video and post, let’s discover how to create a model-based decision-making process with spreadsheets!
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Should schools adopt B.Y.O.T?

A new trend across schools has emerged:  B.Y.O.T for Bring Your Own Technology.   Recently, an article in the New York Times describes the debate of whether schools should adopt B.Y.O.T.   Are you a fan or a critic of B.Y.O.T?  Do the advantages of adopting this policy outweigh the drawbacks, or do they not?  How can we think about this?  Before you answer our poll, let’s first discover how we can use a spreadsheet to develop a logical framework to better inform our opinion!

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Coin-flipping Life Experiment

© Photographer Dana Rothstein | Agency: Dreamstime.com

What if life’s major choices are to be decided by the flip of a coin? Interestingly, the Freakonomics Experiments project – a collaboration between Freakonomics and the University of Chicago –  is enlisting volunteers to do just that to study human behavior of decision-making. Intriguing, right?

An essential feature of this experiment is generating a truly random toin coss. While the Freakonomics Experiments team ensured coin toss randomness by using the Swiss-based Fourmilab’s True Random Number Generator (more info here), we can create our own coin toss using spreadsheets!  Really? You bet!

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