机构IPS

问题如下：

Discuss the issues relating to Cree’s:

i. goal quantification.

ii. goal prioritization. McZhao continues the discussion with Cree in order to evaluate his degree of risk tolerance associated with each of the following individual goals:

Retirement: Cree considers retirement a long- term goal and is willing to endure a 10% drop in expected retirement spending. However, he is very concerned with having sufficient funds to cover medical expenses.

Investment property: Cree sees the investment property as a source of stable income, so it is very important to him to purchase the building. He realizes that maintenance and repair expenses will be necessary, and he also considers those very important.

Philanthropy: Cree’s wife strongly influences him to fund her philanthropic causes, and he wants to maintain some level of annual contribution. Cree believes that his wife would be willing to maintain her $10,000 per year contributions and not increase that amount.

Antique furniture: Cree is willing to reduce or eliminate his spending on antique furniture.

选项：

解释：

With respect to goal quantification, Cree has quantified his retirement spending needs, the cost to maintain his antique purchases, and his wife’s philanthropic support. McZhao should work with Cree to help estimate the costs for his children’s university expenses and what he expects to pay for the investment property.

With respect to goal prioritization, even though Cree believes that his highest priority is his next big expense ($15,000 for this year’s additions to his antique collection), the timing of that expense should not be the sole determinant of its priority. McZhao needs to discuss with Cree which of his goals are most important. The purchases of expensive antiques and the large philanthropic contributions may adversely affect Cree’s ability to fund his retirement lifestyle. Therefore, McZhao should help Cree consider reevaluating his priorities.