Personal Financial Planning and the Allocation of Disposable Wealth

In the process ofpersonalfinancial planning individuals are confronted with a time dependent wealth allocation problem. Oftentimes the solution involves selectingjnancial products based on objective criteria, for example, product cost and expected return. While objective criteria are important to the selection process, an individual’s subjective valuation of all criteria, objective and subjective, relevant to the decision plays the crucial role. A goal programming model parameterized by the analytical hierarchy process is presented to determine the allocation of an individual 5 disposable wealth to present andfiture consumption bundles and investable assets, conditional on the preference ordering of the individual.