Am I on track to meet my goal of having a six figure net worth by the end of 2014? Simply taking the amount of money saved in the most recent month or even over a few months and extrapolating isn't ideal because the monthly numbers fluctuate a lot leading to very different predictions.
The most interesting idea I've come up with for predicting whether or not I'm on track to meet the goal is to fit a linear model.
Here are the data I'm working with:
Code: Select all
date net_worth
10/1/2013 $68,000.00
11/1/2013 $68,341.84
12/1/2013 $72,722.15
1/1/2014 $74,990.98
2/1/2014 $74,702.66
3/1/2014 $78,528.71
4/1/2014 $81,976.40
Code: Select all
Call:
lm(formula = net_worth ~ date, data = nw_data)
Residuals:
1 2 3 4 5 6 7
740.5 -1264.3 845.1 767.3 -1867.6 -161.1 940.0
Coefficients:
Estimate Std. Error t value Pr(>|t|)
(Intercept) -1.142e+06 1.256e+05 -9.093 0.000269 ***
date 7.570e+01 7.817e+00 9.684 0.000199 ***
---
Signif. codes: 0 ‘***’ 0.001 ‘**’ 0.01 ‘*’ 0.05 ‘.’ 0.1 ‘ ’ 1
Residual standard error: 1253 on 5 degrees of freedom
Multiple R-squared: 0.9494, Adjusted R-squared: 0.9393
F-statistic: 93.78 on 1 and 5 DF, p-value: 0.0001994
Note: this is just for fun. I haven't had any coffee yet this morning so let me know if you see errors or have better ideas for how to do this. Can you think of any additional predictors to put in the model?
Without giving too much away, they work 10 days per year robbing banks so they can surf the rest of the time.
Thanks for the criticism, that's just the sort of thing I need.
