Most people spend decades saving and investing faithfully — doing all the “right” things financially — only to arrive in retirement and realize something unexpected:
They’re afraid to spend their money.
Even with millions saved, many people I meet still hesitate to travel, give generously, or enjoy the fruit of their labor because of two primary factors:
- Change is hard. After decades of "Save! Save! Save!", most people find it incredibly difficult to now start spending down their nest egg on a dime — especially since the security of an income is now gone. The psychological effects of retirement are vastly underappreciated.
- A deep-seated fear of “running out”. They worry about becoming a burden on their children or not having enough for medical needs decades down the road. Ironically, this fear often leads to the very regret they were trying to avoid—reaching their later years realizing they can’t fully embrace the life they dreamt about for decades even if they tried.
At True Riches Financial Planning, we not only help clients manage their wealth wisely, but to use what they've been entrusted purposefully — to spend, give, and live with peace, confidence, and non-dwindling calling (even in retirement!). And the cornerstone of our investment approach that helps make this possible is called Asset-Liability Matching ("ALM").
The Problem: Abundance Without Peace or Confidence
If you’ve ever read the book Die With Zero by Bill Perkins, you know the book’s central challenge: many people delay life experiences for “someday,” only to discover someday comes too late. The body slows, energy wanes, loved ones move, and opportunities pass.
But the problem isn’t just psychological — it’s structurally embedded within how traditional wealth management firms allocate client investment portfolios: solely off of risk tolerance.
To be clear — risk tolerance isn't inherently bad, we just don't think it should be the primary driver of how to construct an investment portfolio. The reason the broader wealth management industry uses risk tolerance as a primary measure is likely because it's easily scalable and time-efficient (you don't have to understand the ins-and-outs of somebody's complete financial picture to hand them a risk-tolerance questionnaire and then match the questionnaire response scores to a model portfolio). Not to mention it's typically a regulatory requirement (and for good reason).
One of the main problems with risk-tolerance is it relies heavily on feelings. And as any human knows, feelings come and feelings go. When markets are up 20% in a year, most people love risk and say things like "I should have put all my money into [insert hottest stock or coin]". But when market volatility inevitably comes because of unprecedented uncertainty (whether it be global politics, Covid, a housing crisis, you name it) most people feel different about risk-taking than they did when markets were up 20%. The weight of their portfolio being down 20% (or losing $800,000 for a retiree with a $4 million portfolio) tends to affect decision making, our financial well-being, and fear starts to creep in. "Should we really give away $50,000 this year to that cause we are passionate about?", "We'll take that trip to Italy another time".
This is the problem with traditional approaches to wealth management — portfolios aren't personally customized to each household, they're primarily based off feelings, and allow general rules of thumb (like the 4% withdrawal rule) to diminish some of your peace, confidence, or overall livelihood.
The True Riches Investment Approach: Asset-Liability Matching
Our Asset-Liability Matching approach directly addresses this challenge by 'matching' every dollar of investment to a specific purpose and time horizon (with flexible guardrails of course).
In plain English: We match the time horizon of the assets (what you invest in) with the time horizon of the liability (the cash you need from your portfolio).
How It Works
Define Your Liabilities
We start by mapping out your future cash-flow needs factoring in all sources of your current and future income and expense sources: Pension income, Social Security income, Portfolio Income, Lifestyle Expenses, Mortgage, Generosity Goals, Major one-time needs like a car or home upgrades, Vacations, etc. — year by year, factoring in inflation.
Segment Your Portfolio by Time Horizon
Net Cash Outflows (Inflows minus Outflows) for Years 1-8: We create a Stability Portfolio — this portion is invested in lower-volatility assets such as Money-Market Funds, US Government Treasuries, and Inflation Bonds. Within the stability portfolio, each type of low-volatility asset is matched to its time horizon of needing to be sold and converted to cash to support spending/giving cash needs (this is Asset-Liability Matching within the Stability Portfolio itself, sort of like Asset-Liability Matching squared). The Stability Portfolio's purpose is simple: fund your near-term spending regardless of what the stock market or other long-term inflation hedging investments ("the growth portfolio") are doing.
Years 9 and Beyond: We build a Growth Portfolio with long-term investments — stocks, real estate, and other growth assets—to combat the effects of inflation, preserve purchasing power over time, and ensure we have an appropriate allocation to investments that will generate the long-term necessary returns to ensure your portfolio will continue to be sustainable for the long haul.
Emotional Stability During Economic Uncertainty
Because your near-term cash flow needs are secure, you gain the emotional freedom to ride out market cycles without fear. When stocks decline, you’re not forced to sell; your lifestyle continues uninterrupted. And when markets rise, you can harvest gains from the Growth Portfolio intentionally rather than reactively.
And because your portfolio allocation between the Stability Portfolio and Growth Portfolio are custom-tailored to your household's cash flows, it helps provide emotional stability knowing that you have 8 years for a segment of the growth portfolio to recover before your lifestyle is potentially impacted. Being able to personally contextualize market volatility to your household is [we've been told] extremely comforting.
The Waterfall Approach to Risk
For households who want to have longer than 8 years protected in the Stability Portfolio for additional comfort, we explore that! Specifically, Asset-Liability Matching helps us define your household's "risk-capacity" (how much risk you can reasonably afford to take based on the cash needs from your portfolio), and we can further customize based on "risk-requirement" (quantifying how much risk you need to take in order to generate the necessary return to achieve your personal lifestyle goals), and then finally [if need be], "risk-tolerance" (feelings and emotions towards risk).
It's this 'waterfall' approach to risk — starting with risk-capacity, then secondary to risk-requirement, and tertiary to risk-tolerance — that allows clients to spend with confidence and in alignment with their God-given calling while also having peace in the midst of inevitable economic uncertainty and market volatility.
Why This Approach Matters
1. Confidence to Spend and Give Freely
When you know you have prepared for volatility in advance, fear subsides. "We've planned for this and its baked into our plan". This confidence opens the door to living richly in the ways that matter most:
- Taking your family on the trip you’ve dreamed about for decades.
- Helping your children with a home down payment while they actually need it.
- Giving generously to ministries or missions you want to continue supporting — while you can witness the impact firsthand.
2. Protection Against Emotional Investing
The greatest threat to long-term success isn’t always poor investment selection — it’s actually oftentimes poor investor behavior.
Asset-Liability Matching shields clients from their own instincts by prudently spreading risk across time.
Even during volatile markets, your short-term needs remain funded by stable assets, giving your Growth Portfolio the time it needs to recover and compound.
As we often remind clients: volatility is not risk when you aren't forced to sell.
3. A Biblical Perspective on Stewardship
At True Riches, we believe wealth is not a tool for mere comfort but a means of faithful stewardship. This is a whole different post for another day — but check out the following in the meantime:
- Parable of the Rich Fool [Luke 12:13-21]
- Storing Up Treasure in Heaven [Luke 12:33-34]
- Wise Counsel to the Rich [1 Timothy 6:17-19]
Faithfulness doesn’t mean hoarding your wealth out of fear — it means managing God’s provision wisely and balancing prudence with generosity. Asset-Liability Matching helps believers live out that tension:
- You’re prudent — because your future needs are thoughtfully matched with your investment assets.
- You’re generous — because you know your near-term financial needs & provisions for generosity are established, freeing you to give more boldly and with unwavering consistency.
- You’re purposeful — because your investments are supporting your unique time horizon, goals, and [hopefully] God-given life calling.
A Practical Example
Imagine a 55-year old couple 'retiring' with a $4 million portfolio, who wants to make the most of their 50's and early 60's, so they're going to spend and give more during that time period and accordingly, plans to withdraw $1.28M from their portfolio in those first 8 years.
Through our Asset-Liability Matching framework, a proposed starting investment allocation (without yet factoring in risk-requirement or risk-tolerance):
- $1.28 million (which represents ~32% of their total $4 million portfolio) to the Stability Portfolio, funding the first eight years of planned cash outflows, if need be**
**Protecting the first eight years of planned net cash outflows does not mean we will default to selling the Stability Portfolio for those initial eight years; it simply means we have the option and flexibility to do so if we need to based off future market outcomes.
- $2.72 million (68%) to their Growth Portfolio, designed for years 9 and beyond.
The Stability Portfolio is diversified across:
- Money-market funds and T-Bills for year 1 liquidity
- Laddered 1-3 Year US Treasuries for years 2-3
- Inflation bonds for years 4-5
- Laddered 5-7 Year US Treasuries for years 6-7
- Global bonds for year 8
That means, for nearly a decade, they can spend with confidence and live with greater peace independent of the performance of the Growth Portfolio. And if the Growth Portfolio returns are strong during that period, we also have the option to use the Growth Portfolio for spending and preserving the Stability Portfolio as a cushion during weaker years.
Balancing The Joy of Witnessing Your Impact Today with No-Fear Longevity Planning
As with most things in life, nothing is guaranteed. For tomorrow is not even promised. But that doesn't mean we should neglect thoughtful planning, and that's the beauty of Asset-Liability Matching.
ALM allows us to spend and give confidently today — and experience the joy of witnessing the impact we can make with our families, communities, and world. ALM also allows us to plan sustainably for the future years and decades to come — combatting things like inflation, rising healthcare costs, and the unknown.
There will always be a tension between the present and the future, and knowing how much to allocate to each is an ever-changing decision as we move through each season of life — and maybe, just maybe, God designed it this way on purpose.
Transforming Worldly Wealth to True Riches
Money is simply a tool. A tool we can trade for impact that is greater than the money itself. At True Riches, our mission statement is to help clients "Transform Worldly Wealth to True Riches" — by intentionally using the worldly wealth God has entrusted to each of us to accomplish His purposes in our lives, our communities, and world.
Money is not our security. God is (read that 1 Timothy 6:17-19 again). But in His kindness, He has given each of us a life to steward — time, relationships, talents, and resources. And by building an intentional investment portfolio designed to help you spend and give in alignment with His purposes for your life, we humbly rejoice in our role to help you do just that.
Ready to experience greater peace and confidence in your financial life?
Let’s design your personalized Asset-Liability Matching portfolio and start building an investment plan that empowers you to live richly — now and for decades to come.
Schedule a Complimentary Discovery Meeting
