Secure what matters.
Grow the rest.Plan for outcomes,
not forecasts.

01

Start with a balance sheet, not a portfolio

Traditional planning looks at your investment accounts and asks how much risk you can stomach. We start with your whole economic balance sheet, the way an institution would: everything you have, including the present value of your future earnings, and everything you owe your future self.

Early in a career, human capital usually dwarfs the portfolio. Later, Social Security and pensions carry more of the load. Leave either out and a plan ends up quietly wrong.

02

Turn every goal into a liability with a price

Each goal is a stream of future cash flows: $90,000 a year in retirement, $160,000 for a down payment in four years, tuition starting in 2040. We discount those cash flows to today using market interest rates: a Treasury zero-coupon yield curve, and TIPS for goals that rise with inflation.

That gives every goal a real, present-day cost instead of a guess.

03

Measure your funded ratio

Funded ratio = resources you can count on ÷ present value of your goals

Above 100% on your needs means they're covered even if markets disappoint. Everything above that is your surplus, and the surplus, not a questionnaire, sets how much investment risk makes sense. Try it in the calculator above.

04

Hedge the needs, grow the surplus

Money for needs is invested to match the timing and inflation sensitivity of those goals: bond ladders and duration-matched Treasuries and TIPS, so assets and liabilities move together when rates change. Wants get a balanced mix. The surplus, for wishes and legacy, is invested for long-term growth in a diversified, low-cost equity portfolio.

Your overall stock and bond mix becomes an output of your goals, not an input.

05

Treat the portfolio as a completion portfolio

Your liquid investments should fill the gaps in the rest of your balance sheet. A tenured teacher's career behaves like a bond, so their portfolio can lean toward growth. A tech employee paid in RSUs already carries a big, concentrated equity bet in their paycheck and their stock, so their portfolio should diversify away from it.

Same age, same risk score, very different right answers.

06

Let the plan set the risk factors

The plan's output goes deeper than a stock-and-bond split. It's a set of target exposures to the factors that drive returns: the overall market, company size, value, and on the bond side, interest-rate and credit risk. How long each dollar has to work decides how hard we lean on each one.

Money with a long runway leans toward small-cap and value stocks and adds credit on the bond side, where patient investors have historically earned higher returns for sitting through long dry spells. As a goal gets closer, its growth money moves to a globally diversified core equity portfolio that stays close to the market, so one factor's bad decade can't derail a near-term goal.

07

Why small and value should pay more

Value companies are cheap for a reason, and small companies are fragile in ways big ones aren't. Investors demand a discount for owning that risk, and the lower price is what raises the expected return. Because it's payment for risk, it can take years to show up.

The research: Nobel laureate Eugene Fama and Kenneth French showed that small and value stocks share common risks diversification can't remove, and that value companies tend to have persistently weaker earnings. Their data goes back to 1926.

08

Pick the right vehicle for each exposure

Once the plan sets the targets, we choose the lowest-cost, most tax-efficient way to own each one. The plan picks the tools, not a product shelf.

That might be an ETF in one account and a mutual fund in another, a separately managed account where owning individual securities helps at tax time, or private assets when the time horizon and your eligibility allow.

09

Be choosy about alternatives

In our view, most alternatives no longer add real diversification or excess return. After higher fees, extra taxes, and years of locked-up money, investors often come out behind.

We see two exceptions: a truly diversifying alternative, and backing something, or someone, you care about, sized from the surplus so the plan never depends on it. After all, getting joy from what you invest in is the whole point.

10

Keep more of what you earn

Where it makes sense, we try to hold each investment in the type of account where it's likely to be taxed least, an approach called asset location. It can't always be perfect, though. Keeping some bonds in both taxable and retirement accounts can make rebalancing easier and keep money within reach when you need it, so we weigh the tax savings against that flexibility.

Then we rebalance with a light touch. New contributions, withdrawals, and dividends do most of the work, and we trade only when a holding drifts outside its band, with an eye on taxes when we do. Fewer trades, fewer realized gains.

11

Manage the risks a portfolio can't

Some of the biggest threats to a plan aren't market risks at all. They're handled directly, with the right tool for each, so the portfolio doesn't have to carry them.

12

Why we don't lean on Monte Carlo

A Monte Carlo simulation runs thousands of hypothetical markets using assumed returns and volatility, then reports a "probability of success." Small changes to those assumptions swing the answer dramatically, and the number says little about what happens in the scenarios that fail.

Funded-ratio planning uses today's market prices instead of forecasts, so the plan is anchored to something observable.

13

Keep it current

Interest rates, markets, and your life all move. When rates rise, the present value of your goals falls and your funded ratio improves. When you get a raise, have a child, or buy a home, the balance sheet changes.

We re-measure regularly and rebalance toward the plan, locking in progress as goals become fully funded.