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This presentation consists of highlights from the interview with Moe Abdou,

founder & host of 33voices®.

Ashvin B. Chhabra is the author of The Aspirational Investor: Taming the Markets to Achieve Your Life’s Goals. He is widely recognized as one of the founders of goals

based wealth management and for his seminal work “Beyond Markowitz” which integrates Modern Portfolio

Theory with Behavioral Finance.

Ashvin ChhabraPresident of Euclidean Capital

The Aspirational Investor seeks a wealth management plan

that interlocks these three components:

Insight #1

The Aspirational Investor seeks a wealth management plan

that interlocks these three components:The need for financial security in the face

of known and unknowable risks

Insight #1

The Aspirational Investor seeks a wealth management plan

that interlocks these three components:The need to maintain a standard of living in

the face of inflation and longevity

Insight #1

The Aspirational Investor seeks a wealth management plan

that interlocks these three components:The need to pursue aspirational goals, be it for personal wealth creation, to create

positive impact, or to leave a legacy.

Insight #1

Insight #2

The challenge of investing is compounded by the fact that our brains are less equipped to

navigate the long term intelligently. Successful investing requires planning and discipline.

Insight #3

What do investment strategies that yield great wealth have in common?

They emphasize monetizing brain power, knowledge, and expertise (human capital)

through leverage and concentration:

Insight #4

When thinking about retirement, most people make these two mistakes:

Insight #4

When thinking about retirement, most people make these two mistakes:

They usually overestimate how much money they’ll need to be happy

Insight #4

When thinking about retirement, most people make these two mistakes:

They usually underestimate how much money they’ll need in order to sustain their current

standard of living in the future.

Insight #5

The Aspirational Investor categorizes and prioritizes her goals as follows:

Insight #5

The Aspirational Investor categorizes and prioritizes her goals as follows:Essential Goals - Those focused on

safety, shelter and protection.

Insight #5

The Aspirational Investor categorizes and prioritizes her goals as follows:

Important Goals - Those focused on enabling the process of nurturing and supporting those

important to her - family, and peers.

Insight #5

The Aspirational Investor categorizes and prioritizes her goals as follows:

Aspirational Goals - Those focused on pursuing her dreams - including further

education, starting or expanding a business, philanthropic endeavors, etc.

Insight #6

The truest test of a successful wealth management strategy is whether it can

effectively insulate your essential goals from the whims of the financial markets, while

simultaneously positioning you to achieve important goals and preserving your

opportunity to pursue aspirational goals.

Insight #7

When investing, understanding what you own, and why you own it, is one of the most crucial determinants of success. Opt not to

overlook the totality of your personal balance sheet when constructing and managing your

wealth management strategy.

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

1. Outline your goals and categorize them as essential, important, and aspirational

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

2. Convert your goals into cash flows using a zero discount method:

Target Goal {N} = Cost of goal {in today’s dollars} / N (assuming you do this every year}

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

3. Create your wealth allocation snapshot by organizing your assets and liabilities

across the personal risk, market risk, and aspirational risk buckets

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

4. Assess your risk allocation by taking into account both your financial ability and your

psychological ability to bear losses.

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

5. Implement asset allocation and portfolio diversification in each of the three buckets - Safety, Market, and Aspirational.

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

6. Analyze and stress test - you want to be on track to reach your essential

goals with at least 80% probability.

Insight #8

If you’re serious about achieving financial success, follow these seven steps:

7. Review and Rebalance on an annual basis

Insight #9

To capture the benefits of diversification in each asset class, opt for:

Insight #9

To capture the benefits of diversification in each asset class, opt for:

A single broad index

Insight #9

To capture the benefits of diversification in each asset class, opt for:

Three to five active managers

Insight #9

To capture the benefits of diversification in each asset class, opt for:

Thirty or so carefully picked securities, each with different strategies or market exposure.

Insight #10

In the end, the wisest investors know that investing is not about the markets;

it’s about them. They design a deliberate investment strategy that correlates

with their highest aspirations.

Reflect Does your wealth management strategy

leverage your human capital?

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Insights by Jenna Abdou

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