Most financial plans give you a single projected number — and that number is almost certainly wrong. Monte Carlo simulation shows you the full range of outcomes, so you plan for reality, not a spreadsheet fantasy.
Every financial plan you have ever seen works the same way: plug in your SIP, an assumed return of 12%, your timeline — and out comes a single number. ₹1.2 crore in 20 years. Done.
That number is almost certainly wrong. Not because the math is bad, but because it assumes the future is a straight line. Markets have never worked that way, and they never will.
Monte Carlo simulation replaces that single line with thousands of them. Instead of assuming equity will return 12% every single year, it draws from a realistic distribution of Indian market returns — some years up 40%, some down 30%, most somewhere in between. Each simulation is one possible future.
Run 10,000 of those futures, and you get a distribution: in how many scenarios did you actually hit your ₹1 crore goal? Say 7,400 scenarios. That is a 74% probability. That is a number you can actually do something with.
A 74% probability is not a guarantee — it is a compass. When markets drift or your SIP changes, you can recalculate and see exactly how your probability shifts.
The problem with point-estimate planning is not that the number is wrong — it is that it gives you false confidence. You see ₹1.2 crore in 20 years and you stop worrying. But that projection assumed markets cooperate every single year. They will not.
Monte Carlo does not just show you the median outcome — it shows you the bear case too. What happens if the first five years are bad? (They can be.) What if inflation runs hotter? What if your income takes a dip and you miss six months of SIPs? The simulation accounts for all of it.
Aurelian Capital draws from realistic Indian market return distributions — not global averages, not US equity data. Sensex and Nifty have their own volatility profiles, their own correlation with global markets, their own response to Indian inflation and RBI policy.
Each simulation runs your exact goal — your SIP amount, your current corpus, your target — across 10,000 randomly generated market scenarios. The output is a probability distribution, a fan chart, and a single number: your goal success probability. From there, you can move levers. Increase your SIP by ₹2,000 — the probability jumps. Add three years to your timeline — the probability jumps. The simulation shows you exactly what trade-offs matter.
Monte Carlo is not a magic tool that predicts the future. It is a tool that tells you the honest truth: the future is uncertain, and your plan needs to account for that uncertainty. A 74% probability with a clear lever to pull is infinitely more useful than a confident-sounding projection that assumes things will always go right.
Disclaimer
Not financial advice. Run your own numbers with Aurelian Capital.
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