Episode 10 — Building the Portfolio: The Recipe
Duration: 15:21 minutes
Nine episodes of preparation. Today, everything comes together.
Episode Overview
Duration: 15:21 minutes
The allies are in place. The dangers are named. The ingredients are understood. The vehicle is chosen. Now we build. In this episode, I walk through how to construct a real portfolio for your child — turning nine episodes of theory into actual percentages, real allocations, and a running engine. I cover the three questions every portfolio decision flows from, walk through two complete real-world examples, and explain how the allocation shifts gradually as your child grows. This is where the system becomes real.
What You'll Learn
- The three questions every portfolio decision flows from
- How time determines how much risk you can carry
- A complete portfolio for a 5-year-old with an engine handover goal
- A complete portfolio for a 13-year-old with a specific amount target
- How and when to rebalance as your child grows
Key Takeaways
Three questions first
What is your objective? How long do you have? What is your risk tolerance? Everything else follows from these.
Same ingredients, different recipe
Two different goals and timelines produce two different portfolios — but the logic behind each choice is the same.
Gradual, not dramatic
As your child grows, the portfolio shifts slowly toward protection. Not a single event — a deliberate, steady adjustment every two to three years.
Episode Summary (click to expand)
An overview of what’s covered in this episode.
Nine episodes of allies, dangers, ingredients and vehicles. Today, I cook. This is the episode where the theory becomes a real portfolio — where principles become percentages and the engine gets built.
Three Questions Before You Build
Before choosing a single allocation, I walk through the three questions every portfolio decision flows from. What is your objective — engine handover or a specific target amount? How long do you have — the single most powerful variable in the system? And what is your risk tolerance? The answers to these three questions determine everything that follows.
Example One: The Engine Handover
A five-year-old, a 15-year horizon, an engine handover goal. I walk through the full allocation: 80–90% global equities as the growth engine, a small stabilising layer of bonds, real estate as a genuine diversifier, and an optional modest allocation to commodities. Then I show exactly how that portfolio shifts at year 15 — equities reduced, bonds increased, protection growing — through gradual rebalancing every two to three years, never reactive, always deliberate.
Example Two: The Specific Target
A thirteen-year-old, a seven-year horizon, a specific amount goal. A more conservative recipe: 50–60% equities still working for growth, but a substantial 30–40% in bonds because with a shorter runway and a capital protection goal, a severe crash close to the finish line is a real problem. Same ingredients, different proportions, different reasoning — and I explain exactly why.
How Often to Review
Less often than you think. Once or twice a year for a long horizon portfolio. You check the allocation, the contributions, and whether anything structural has changed. You do not check because markets fell last week. As the handover approaches, the review cadence increases slightly — not because of the market, but because of the clock.
Listen to the full episode to hear the complete frameworks, both portfolios in detail, and the practical picture of what this actually looks like once the engine is running.