Build a plan around an individual's specific goals and propose ways of meeting them

Start by listing goals, classifying them by importance (essential needs through to aspirational wishes), time horizon and the probability of success the client requires. Each goal is costed in present-value terms, discounting at a return consistent with that required probability: a goal of 1,000,000 in ten years discounted at 4% needs 1,000,000 ÷ 1.04¹⁰ = 675,564 today. Assets are then assigned to goal-based sub-portfolios, with essential goals funded by low-risk assets and aspirational goals by riskier ones; wealth left over is discretionary surplus. If assets fall short, save more, defer or trim goals, or take more risk where capacity allows. The trap is discounting at the portfolio's expected return, which understates the capital needed and leaves essential goals underfunded.