By Dylan Parkes | August 8, 2025
Are We There Yet? – The time it takes to build a (great) financial model
This blog is part three in our series on time. If you missed the other two, you can read part one Are We There Yet? – The time it takes to be a financial modeler and part two Are We There Yet? – The time it takes to build a (good) financial model
So, how do we go from a good to a great financial model?
Our story opens in France… or in French at least.
“Je n’ai fait celle-ci plus longue que parce que je n’ai pas eu le loisir de la faire plus courte.” “ I have made this [letter] longer than usual because I have not had time to make it shorter.”
– Blaise Pascal (falsely attributed to Mark Twain, Oscar Wilde, Woodrow Wilson, etc.)
The quote above captures a fascinating concept that in order to make something shorter and more precise you need to give it MORE time. It is also one of the most misattributed quotes of all time. This phenomenon is likely due to the timelessness of the concept.
This quote gets to the heart of modeling: the simpler and clearer something looks, the more time it probably took to create.
But unlike timeless wisdom, our models are on deadlines. So:
- What makes a model good, great, or even perfect?
- How much time does it take to get there?
A Good Model
As stated in the second blog under this title, a (good) model is reasonable, flexible, and gives outputs that are defendable. I put good in ( ) any model that is built and used to make a financial decision should fit the definition above. Unfortunately (or fortunately for us, perhaps…) this is not always the case.
Striving to reach a good model is therefore an aspirational target. To achieve this goal, you need to have vetted and reviewed inputs so that any rational person would think they were reasonable. This reasonableness also includes being wary of incentives and bias in those delivering the information.
Flexibility is both a baseline requirement and a spur-of-the-moment action. A good model should be able to handle any and all calculations in its neutral form. Changes to inputs should be done easily and the results should be immediate. But flexibility must also cover a last second request from a principal party to overlay or amend something in the model. Thus flexibility is partly borne by the model and part by the modeler (See the first blog).
Defendable outputs are obvious. These numbers, ratios, calculations, and charts will be used to make expensive, complex decisions. Defendable means that you and others can trace the logic of these outcomes from the very beginning through to the number before you. It does not mean that you can spin or explain away illogical or unexpected answers. It is a measure of fidelity, not how well you can argue and ultimately should be an objective answer.
Thus, a (good) model will take patience, skill, and integrity to produce. So what about a (great) model?
A Great Model
A great model has all of the features of the good model above but it arrives there by the simplest, cleanest, most logically forward path for any and all calculations. This means that each calculation is scrutinized and revised until any excess is trimmed away.
It’s a product of craftsmanship. Think of it like a luxury car: it looks effortless, but every detail is meticulously crafted. A great model runs smoothly, adapts easily, and holds up under scrutiny.
The result will be a model that moves quickly and smoothly through complex calculations. The outcomes will be defendable as the calculations will be transparent and easy to understand. The simplicity of the structure should allow for maximal flexibility in changes. If you are a modeler who can produce such a model, you are certainly flexible enough to handle any emergency inputs. It is likely that these emergency changes are unlikely as a great model doesn’t just answer questions—it anticipates them.
This level of model is an investment. It is an investment of time, skill, and resources. As such, the effort and time is often reserved for a central model that will drive many investment decisions for a long time.
The False Illusion of a Perfect Model
While the model above may sound perfect, it is likely far from it. Perfect is an illusion. Even the best model can’t predict the future. Reasonable input data can ultimately be very wrong. Drastic and unpredictable shifts in markets, laws, climate, etc. can wipe out the best assumptions.
The cleanest excel code with the strongest logic may still deliver off results in a unique case. A phenomenal financial modeler is still a person and still fallible.
All financial models are wrong. Some are just more useful than others. And fundamentally, investing involves risk so even a great model can’t predict a poorly built or poorly managed asset.
So, chasing perfection isn’t the goal—getting to great is.
What it takes to make a Great Model
Great models take time, quite a bit of it. Not because they’re longer or more complex—but because they’re clearer and more efficient. That clarity takes effort. Effort here means time to parse out simplicity which means faster models with clearer answers for investors.
We are left with great models which do everything a good model does but in the simplest path possible. It gets to exactly the point without leaving the user to decipher thousands of nested IF statements and 3-page macros.
A great model isn’t a mythical creature and, on the surface, won’t be markedly different from a good model. The secret of a great model lies in the quote above. It is contained in the fact that to level up your financial model you need to take more, deliberately applied time to achieve it.
You may have a good model currently that needs refreshing to become great. You may need to apply some Bayesian thinking and allow new information to change your model at a fundamental level. A (good) model is where everyone starts. Time, skill, and patience can make that financial model great.
The Gettysburg Address lasted around two mins and was delivered after a rousing two-hour speech. The outcome is self-evident. As with a powerful speech or a moving letter, the real craft lies in the simplicity.
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