Modulus Financial Planning – What’s in the Name?

January 11, 2021
January 11, 2021 studio55

When we started thinking about starting our financial planning company, we struggled to come up with a name. We wanted a name which explained exactly what we do. It needed to have meaning. It needed to be simple. It had to be searchable. But we drew a blank.

One evening, I was throwing out ideas with my wife, and she concluded she thought a maths term would be good. She is a maths teacher after all. But this wasn’t exactly a new idea. There are loads of financial planning companies out there named after a maths term. But then that’s when I said Modulus. She liked it. I liked it. When I suggested it to John, he didn’t know what it meant. But when I explained it, it was a grower. It wasn’t immediately a no, but it wasn’t immediately a yes either. But it stuck.

I admit, 95% of people won’t know what modulus means, but let me try to explain.

A Confession – I used to be a Maths Nerd

All through school, I liked maths. I hated English. I hated writing. I didn’t really read that many books. I still don’t.

In my first year at Bangor Grammar, I was entered into a Northern Ireland wide mental maths competition, based on the game 24. It’s a simple game – you are given four numbers, and using all the numbers, you must make 24.

I found it a bit addictive. I’d find myself doing it using the 4 numbers on a number plate when we were on longer drives. If I couldn’t sleep, I’d use the four digits on the clock to do it. My clock projected the time in 24 hour format onto the roof – I’m not mad. But I went to the competition and made it to the final table of 4 players. And then I got disqualified in the final. My competitive streak came out. There was a girl who seemed to know all the answers before anyone else could see the numbers. So to throw her off her game, I jumped in before the card was down and tried to stall while I figured it out. You got 2 wrong answers before you were disqualified.  I might have been a bit of a nerd, but I’m competitive too.

So that was the beginning of my maths background. Which led to me being one of the four in the school who did a Further Maths A Level. Ironically, when the numbers disappeared, that’s when I stopped enjoying maths.

A Quick Maths Lesson

Bear with me. I know not everyone likes maths. And if my wife reads this, she’ll tell me my explanation is horrendous. But anyway, that’s why I’m not a teacher.

As part of the Further Maths A Level, we learned about things called i j and k vectors. Then we used the concepts in Mechanics modules to do with forces acting on an object. They used this concept known as the Modulus of a number. Basically, the modulus is the ABSOLUTE VALUE of a number, regardless of whether it’s a positive or negative number. 

Simply, the modulus of the number 2 and -2 , is the same – it’s 2.

And it’s written like this with square brackets   |-2| = 2   and  |2| = 2

Is our logo beginning to make sense now?   

What’s this got to do with financial planning?

It’s used in real life more than you might ever know. You use the concept of Modular arithmetic when you tell the time and have to cross into a new hour or between AM and PM. When you add 20 minutes on to 9.50am, we all get to 10.10am, not 9.70. 

But we used it mostly when we were drawing graphs or finding the overall magnitude of a number of forces. It is used in many different ways, including when someone is designing a rollercoaster. That’s the coolest use I know of.

But here’s how I equate it to financial planning.

This graph shows the general trend of your assets over your lifetime. It shows that as you begin working and climbing the career ladder or building your business, you start to earn more and your assets grow. They keep growing until you stop working, or retire. Then you maybe spend a large chunk straightaway, and then slowly deplete your assets as you draw an income and live off them, until you die. You could run out of assets before then, but hopefully our clients won’t.

It’s a simple concept. But simple doesn’t mean easy. It’s far more complicated than that. After all, Life is a Rollercoaster as the song goes.

Things happen. Different forces are at work. You might see them coming, or they can shock you. You get married. You have children. You move house. You get sick and can’t work for a while. You have to start paying for childcare. You move to a bigger house and your living costs skyrocket. You decide to start your own business. You get divorced. The stock market crashes and your investments lose 20% in a month. Then you retire. You have to give your children money to help them get on the property ladder. You want to travel in retirement so you spend more initially. Then in your final years, you have to pay care fees.

At the same time, your investments fluctuate every day as the stock market continues its march. Up and down, as it always has done. And it always will.

Now your financial plan isn’t so simple.

So Why Modulus Financial Planning?

Financial Planning is all about planning your life first. Then we arrange your finances to help with the cost of life. And finally, we’re there to make sure you can deal with each new force as it hits.

But when all is said and done, we figure out how much you need to retire, and we tell you the amount. You need to increase your assets by say £8,000 every year until retirement to get to your number. We can only do this if we know how much is enough for you. Then, we calculate how much they can decline for you not to run out. We’ll agree the number, and the direction is easy. You either save or you spend.

But regardless of the direction, you need to know the number (the Modulus!).

And we’ll keep on top of this to help when every new force hits you. Expected or unexpected. Good or bad. We’ll make adjustments, and keep going.

And that’s why the name stuck.

We’re Modulus Financial Planning. Helping our clients live the life they want, by delivering the absolute value of financial planning.   

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Modulus Financial Planning

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15 Church Square, Banbridge,
BT32 4AP, Co.Down, Northern Ireland

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Modulus Financial Planning Ltd is authorised and regulated by the Financial Conduct Authority. We are entered on the FCA Register under reference 965916. Registered in Northern Ireland, Company Number NI673772.
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