FROM MODELS TO MINSETS: LIFE LESSONS FINANCIAL MODELLING CAN TEACH YOU

At first glance, financial modelling is all about assumptions, revenue projections and formulas. But if you dig deeper, it’s a mirror reflecting some of the life’s profound lessons – about structure, resilience and the art of making decisions in uncertainty.

I’ve come to realise that life is like a financial model: uncertain and deeply influenced by the assumptions we choose to make. Through this post, I want to share what financial modelling has taught me so far – not just about numbers, but about the life itself.

FAULTY ASSUMPTIONS = FAULTY MODEL, MISGUIDED PATH

The primary goal of a financial model is to enable informed decision making, and it all starts with defining the right assumptions. Assumptions play a crucial role. Just as flawed assumptions in a model can lead to inaccurate outcomes, the beliefs we hold – whether about ourselves, others, or the world – shape our experiences. Faulty assumptions can cloud judgement, impact decisions and influence how we navigate challenges and opportunities alike.

The lesson? Question your assumptions regularly, both in spreadsheets and in life.

THE REVENUE BUILD: DON’T BE SO OBVIOUS

In many businesses, the revenue drivers extend far beyond just price and quantity. It involves hidden factors such as customer behaviour, product differentiation, market trends etc. Life works the same way – building something meaningful takes more than focusing on surface level results – it takes research, introspection and often more than one approach (to estimate).

Success, like revenue, is rarely straightforward.

COMPLEX MODELS ≠ GREAT MODELS

Complexity does not equal sophistication. Using endless formulas, multiple tabs or unnecessary layers can lead to confusion, redundancies and inaccuracies. A model and a mind with too much noise does the same thing – it takes you away from what truly matters.

Simplify. Declutter your thoughts and focus on essentials.

CIRCULAR REFERENCES: STOP GOING IN CIRCLES

Circular references in financial models often cause chaos—disturbs calculations, creates confusion, and makes the model unreliable. You spend endless time trying to fix them, only to realize they’re rooted in flawed logic or a lack of clarity. In life, these circular references come in the form of emotional loops of overthinking, self-doubt or holding onto people or situations that drain your energy (~toxicity). They prevent you from moving forward.

Break free from repetitive negative patterns.

TEMPORARY FIXES AREN’T FIXES: AVOID PAINKILLERS

Using a temporary fix like hardcoding numbers or ignoring critical assumptions might seem like a shortcut but usually leads to chaos down the line. It makes the model unmanageable. Similarly, in life – indulging in short-term comforts, whether it’s an impulsive decision, a fleeting distraction, or a situationship – may offer immediate reliefs but can side-track you from long-term goals and even cause lasting damage.

Beware of the danger of short term relief at the expense of long term stability.

SET, GO, GET: THE POWER OF GOAL SEEK

The "Goal Seek" function in the model is a lifesaver – it helps you determine exactly what inputs you need to achieve a desired outcome. It forces you to get specific, realistic, and actionable. In life, when you’re building (or rebuilding) yourself (after a setback), it’s important to know what your "goal" is and what it will take to get there. Whether it’s an emotional healing, career growth, or personal happiness, clarity about your destination and the steps needed to reach it – makes all the difference.

GET, SET, GO? No.

SET your goal. GO act. GET your results.

THE DANGER OF TEMPLATES

When starting a valuation exercise, I almost never begin with a fixed model template - thanks to the variety of target companies we get to work with. Why? Because templates can limit critical thinking and the ability to tailor the model to a specific situation. They tempt you to copy-paste without giving any time to question. Just like a blank Excel allows you to design a model perfectly suited to a specific business, a blank slate in life gives you the freedom to redefine yourself, explore options, and create something uniquely yours.

Accept the challenges, because sometimes, starting with a blank canvas is the only way to uncover new possibilities.

CONCLUSION: LIFE AS THE ULTIMATE MODEL

Financial modelling is more than just numbers; it’s a mindset. Just like a good model, life requires thoughtful assumptions, adaptability, and the courage to face uncertainty. Mistakes will happen, but the key is to learn from them and not repeat them.

In both spreadsheets and life, it’s not about perfection – It’s about progress.