Methodology
Tepuy Solutions is an assumption-driven financial modeling platform focused on Australian personal finance decisions.
This page documents the modeling approach used across Tepuy calculators. It is intended to make assumptions explicit and explain what the calculators do—and do not—represent.
Outputs are scenario-based simulations and do not constitute financial advice.
Modeling principles
- Assumptions first: key drivers (rates, returns, costs, taxes, timing) are inputs, not hidden defaults.
- Cash flow + balance sheet together: affordability and long-run outcomes are modeled in the same run.
- Opportunity cost is explicit: capital tied up in one choice is capital not compounding elsewhere.
- Mechanics over narrative: the model tracks flows and frictions (fees, taxes, transaction costs) across time.
- Sensitivity over certainty: the primary output is “what changes when assumptions change.”
A Tepuy model is deliberately designed to be inspectable: if you disagree with an assumption, you can change it and re-run.
Scope
Tepuy calculators focus on Australian personal finance decisions (e.g., property vs shares, rent vs buy, offset vs shares, retirement feasibility). Where tax treatment is included, it is implemented as a modeling component rather than advice.
What Tepuy does not attempt
- Forecasting property prices, market returns, inflation, or interest rates.
- Optimizing portfolios or constructing recommended asset allocations.
- Personal advice based on your circumstances, risk tolerance, or goals beyond what the inputs encode.
Cash-flow modeling
The core unit of analysis is a time-series of cash flows. Depending on the calculator, this may include contributions, repayments, rent, dividends, expenses, and tax impacts. The model then tracks how cash flows affect:
- Net cash position: the cumulative cash burden or surplus over time.
- Asset values: property value, share portfolio value, and associated equity.
- Liquidity constraints: whether a scenario remains feasible under the chosen assumptions.
Timing conventions
Tepuy uses consistent timing rules (e.g., year 0 vs year 1 treatment). Where relevant, the calculators avoid “free money” artifacts such as charging interest or earning rent in periods where the model states those cash flows should not yet apply.
Tax-aware components (where applicable)
Some calculators include tax-aware logic to avoid structurally biased comparisons. Examples include:
- Capital gains tax (CGT): modeling sale events rather than assuming assets can be liquidated frictionlessly.
- Income tax interactions: where negative gearing or deductions are modeled, they are treated as cash-flow effects.
- Dividends / distributions: modeled as cash flows that may differ from capital appreciation timing.
Tax rules are complex and change over time. Tepuy treats tax as an explicit scenario assumption; users should verify details independently.
Opportunity cost and comparability
Many comparisons are biased because they unintentionally give one option “extra capital” or “extra cash flow.” Tepuy aims to compare options under the same economic constraints by making these quantities explicit:
- Upfront cash: deposit, stamp duty, legal fees, and other acquisition frictions.
- Ongoing cash burden: net costs after rent/income, maintenance, fees, and tax effects.
- Alternative investment return: what the forgone capital could earn elsewhere.
In practice, “fair comparison” means tracking both options with explicit cash constraints, not only comparing terminal wealth.
Sensitivity and interpretation
Tepuy outputs should be read primarily as sensitivity analysis: they show which inputs dominate outcomes. In many scenarios, a small number of parameters drive most of the spread (e.g., interest rates, rent yield, growth rates, time horizon).
Recommended usage
- Run a base case with conservative inputs you are willing to defend.
- Run stress cases (rates higher, vacancy higher, costs higher, returns lower).
- Look for break-even regions rather than a single “winner.”
Definitions (common outputs)
- Equity: asset value minus liabilities (where modeled).
- Net cash position: cumulative cash outlay/surplus over time.
- NPV: present value of a scenario under a chosen discount rate (where included).
- IRR: discount rate that makes NPV equal to zero (where included).
If a specific calculator implements a definition differently, that calculator should be treated as the source of truth for that context.
Disambiguation
Tepuy Solutions is not affiliated with thetepuy.com or other non-financial brands using the name “Tepuy”.