Most people don’t think of their wealth as one big pile of money. Mentally, we separate it into “accounts” with different purposes—cash for emergencies, money for lifestyle, savings for future security, and assets meant to benefit family or causes. The challenge is that market swings, life events, and emotions can cause our behavior to drift away from those intentions. A goals-based plan helps reconnect your strategy to what you’re actually trying to accomplish.
Goals-based investing is less about chasing returns and more about structuring your money around real-world outcomes—so you can make decisions with clarity even when markets are noisy.
The Core Idea: Match Strategy to Purpose
A goals-based plan asks you to step back and review how your capital is structured, then check whether your day-to-day financial behavior matches your long-term aims.
Instead of treating all assets the same, you create a “map” that separates money by purpose. One practical model uses four lenses:
- Liquidity (cash)
- Lifestyle (spending)
- Legacy
- Growth
Each lens has a different job—and often a different risk posture.
The Four Lenses of a Goals-Based Plan
1) Liquidity: Cash for Stability and Flexibility
Liquidity is your financial shock absorber. It’s cash (or cash-like funds) reserved so you don’t have to restrict spending unexpectedly or sell long-term assets at the wrong time (the classic “sell low” problem). It can also include funds earmarked for near-term purchases or for opportunistic needs.
What it supports: market volatility, emergencies, big near-term expenses, and “sleep-at-night” security.
2) Lifestyle: Funding the Life You Want to Live
Lifestyle assets are meant to support your ongoing needs and wants—your “normal life,” plus planned expenses that help maintain it. The idea is to allocate strategically so that if a major disruption happens (like a large loss in a concentrated investment or a life event that reduces income), you still have resources to maintain a consistent way of living.
What it supports: predictable spending, major planned outflows, and changes in lifestyle needs over time.
3) Legacy: What You Leave Behind (or Give Along the Way)
Legacy focuses on goals intended to benefit others during or after your lifetime. It can include family gifts and philanthropy, and it also acts as a “backstop” if lifestyle resources are depleted earlier than expected due to factors like longevity.
What it supports: generational support, charitable giving, and long-term family intentions.
4) Growth: Long-Term Compounding and Perpetual Purpose
Growth assets are designed for long-term capital growth. Unlike the first three lenses—which are generally meant to be used or distributed over time—the growth lens is intended to compound and can serve as the foundation for intergenerational wealth or ongoing charitable support.
What it supports: long time horizons, compounding, and building a durable base for future goals.
Why This Framework Helps in Real Life
A goals-based plan can help you:
- Avoid accidental risk (e.g., taking long-term risk with short-term money)
- Reduce forced selling during downturns by protecting liquidity and lifestyle needs
- Make trade-offs clearer (e.g., “If I fund this purchase, which goal does it reduce?”)
- Stay disciplined because you know what each bucket is for
It also helps you evaluate decisions based on purpose, not headlines.
A “Start Here” Question Set for Goal-Based Planning
Use these prompts to sketch your own goals-based plan:
Liquidity (cash)
- Are you planning any significant purchases or near-term commitments?
- Do you anticipate any unusually large outflows?
- How much cash would you want available for unexpected events or opportunities?
- How much cash would help you feel secure through volatility or a business cycle?
Lifestyle (spending)
- How much would you need annually to maintain your current lifestyle?
- Are there any large planned outflows you should prepare for?
- Do you expect your lifestyle needs to change over time?
- Are goals for family members (like education support) part of your lifestyle plan?
Legacy
- How do you define success for your family and legacy?
- Who is this wealth meant to benefit, and when?
- What do you want to transfer (cash, investments, property, collectibles, etc.)?
Growth
- What would you like to achieve with your wealth long-term?
- Who will steward assets beyond your lifetime?
- How do you think about any concentrated assets you hold?
Putting It All Together: A Simple Next Step
You don’t need a perfect spreadsheet to start. The first win is clarity:
- List your top goals and assign each to one lens
- Give each goal a rough timeline (near / mid / long term)
- Decide what “enough” looks like for liquidity and lifestyle
- Treat growth and legacy as long-horizon strategies that can handle volatility
- Review annually—and after major life events—to keep behavior aligned with intent
Bottom Line
Goals-based investing helps you see your money the way you actually use it: as a set of purposeful resources, not a single number on a statement. By separating wealth into liquidity, lifestyle, legacy, and growth, you can build a structure that supports both practical needs and long-term meaning—so your strategy stays aligned with your intentions through market and life changes.
Educational information only. This content is not individualized financial, tax, or legal advice and does not create an advisor-client relationship.