Risk modelling your life – assets and maintenance

Graeme Keith and I went on a quest to model our lives by applying state of the art risk management techniques. In the previous article we covered income and the associated risks, as well as basic living expenses and the risks associated with expenses growth. In todays article we will talk about the costs associated with owning a property and the risks associated. We modelled the uncertainty around annual maintenance costs and the risks of significant but rare events that would require up to 200% of an annual maintenance budget. Since one of our hypothesis was to keep existing property and invest in a new house, we do this risk analysis for both assets.

Read the first part here and second part here 

Maintenance
Fluctuation taken as Gamma distributed
Fluctation mean as percentage of base 10% k 1,56
Fluctuation std. dev. as percentage of base 8% theta 0,06
Maintenance existing property 1818 Mean           2 000
P90           2 193
Maintenance new proprerty 2727 Mean           3 000
P90           3 290
Risks: Maintenance existing property
Unexpected large expenses up to 200% of annual Frequency period (years) 5 lambda 0,2
Uses exponential distribution for impact of simple then
analytical result to aggregate multiple impacts P90 simple imact 4000 mean           1 737
Risks: Maintenance new property
Unexpected large expenses up to 200% of annual Frequency period (years) 5 lambda 0,2
Uses exponential distribution for impact of simple then
analytical result to aggregate multiple impacts P90 simple imact 6000 mean           2 606

 

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Управление рисками

В этом коротком и очень увлекательном курсе, Алексей Сидоренко расскажет о причинах внедрения риск менеджмента, об особенностях принятия управленческих решений в ситуации неопределенности и изменениях в новом стандарте ИСО 31000:2018.

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