Quantitative Transparency

Calculation & Scoring Methodology

We believe you deserve to know exactly how every metric on this website is computed. Here is our complete, unedited mathematical framework and set of baseline assumptions.

1Financial Health Score (0–100 Scale)

Our 0–100 Financial Health Score measures your current financial resilience, investable surplus, and compounding runway based on your 5 answers:

Baseline Foundation (50 pts): Standard neutral starting point.
Investable Capacity (Up to +18 pts): Evaluates your monthly surplus as a percentage of your stated income bracket. Higher regular capacity yields higher scores.
Existing Wealth Cushion (Up to +15 pts): Measures whether you have built an initial capital base to survive market drawdowns.
Time Horizon & Goal (Up to +10 pts): Long horizons (7–10+ years) score higher due to the mathematical dampening of equity volatility.
Risk Resilience (Up to +7 pts): Evaluates whether market drops trigger panic selling or opportunistic compounding.

Score brackets: 30–55 (Needs Immediate Foundation), 56–75 (Moderate Readiness), 76–95 (Optimal Compounding Posture).

2Emergency Fund Sizing

Formula: Target Reserve = Essential Monthly Outflows × Target Months

Essential monthly outflows include rent/home loan EMI, utilities, groceries, and debt obligations. Discretionary spending (entertainment, luxury shopping, dining out) is excluded.

3 Months: Dual-income salaried families with high job security.

6 Months: Standard single-earner salaried households (Recommended).

12 Months: Freelancers, commission-based professionals, or business owners.

3Savings Rate & Financial Independence (FIRE)

Formula: Savings Rate = [(Take-Home Income - Living Expenses) / Income] × 100

Our freedom timeline projection uses the 4% Safe Withdrawal Rule (Target = 25x Annual Living Expenses) assuming a conservative 4% real rate of return above inflation.

4Standard Macroeconomic Assumptions

Indian Equity Long-Term CAGR: 12.0%Based on 20-year rolling returns of the Nifty 50 Total Returns Index (TRI). Equities do not deliver 12% linearly every year.

Headline Retail Inflation (CPI): 6.0%Standard long-term consumer price inflation in India. Healthcare and education assumptions are modeled higher at 8–10%.

Post-Retirement Portfolio Return: 8.0%Assumes a conservative hybrid asset allocation (50% Debt/Arbitrage, 35% Large-Cap Equity, 15% Liquid/Gold) during distribution years.

Methodological Limitations

• Projections are mathematical models based on constant inputs and historical averages. Real market returns fluctuate cyclically with volatility and economic shocks.

• Our 5-question snapshot provides an educational diagnostic, not individual financial advice. It does not replace a comprehensive review by a SEBI-registered fee-only financial planner.

• Tax laws, LTCG exemption slabs, and indexation rules change over time with Union Budgets and should be validated for your personal tax filing status.

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