A Picture’s Worth
I created the above small picture to pull together the various ideas floating around my blog for the past couple of months:
- Retirement Blueprint Part II projects an overall total asset value of 1,453,676 by the age of 35
- Minimize Your Life gives a viable lifestyle cost of 2,000/month or 24,000/year
- Personal Investment Style concocted a dual horizon (maintain 5+ years of expenses in cash/bonds) while keeping the rest in a diversified indices portfolio
Synthesizing all of these ideas together results in:
- Projected total asset worth of 1,454k by the age of 35.
- Put part of the money in liquid reserves so that I have an overall ten years worth of expenses saved up (one year in cash and the nine in short-term bonds) at 240k. I expect to live a minimized lifestyle when I do retire so the 2k/month should be sufficient.
- The real estate condo (property #3) accounts for another 147k, which will then keep living expenses low at 450/month for my minimized lifestyle to work.
- The rest of the assets are allocated into a well diversified indices portfolio to minimize expenses.
Overall this synergy should result in lower future expenses due to a minimized lifestyle and higher overall returns due to a dual horizon that lets me wait out tough market years. This is in the spirit of what I said in previous posts when I plan on spending much less than what I expect my nest egg to generate. It should still generate the types of returns I forecasted in my Retirement Blueprint Part III, but this post delineates the types of asset categories I plan on spreading my net worth across in order to generate those types of returns. It is much easier to stay the course when you have written out a path. Even easier with a picture!
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