I've been lurking on this site for a few months now, and I figured it was probably time to get registered and say hi. I left my job in January and am now exploring the idea of semi/early retirement. Discovering this site and the Bogleheads Diehards site has been giving me a great education.
I'm 42, single, with about $2.7M in cash and $300K in 401K/IRAs. (Hey, that would make a great intro for a personals ad
). I paid off my house in December, so I have no debt. The reason I'm in cash is that I sold off most of my company stock/options and am now looking to reinvest in a more diversified manner.
I've been reading a lot of financial/investment books over the past year, so I think I have a reasonable grounding in the basic approaches. Currently I'm looking at an asset allocation plan similar to what ESRBob suggests in Work Less, Live More (the sandwich portfolio), though I will probably go with ETFs because I can invest in lump sums.
With the market/economy as it is, I don't feel bad about sitting out for a bit until I figure out a good investment plan, but I'm nervous because I don't know how long this downturn will last.
One question I have is about asset allocation between taxable and tax-deferred accounts. Some people say your allocations should be between both types of accounts, but if I am really planning to ER that doesn't seem to make sense. Putting specific allocations in an IRA (such as REITS) might diversity my overall investments, but it won't diversify the money I need to rely on *now* for income. It seems like I should have two mini portfolios: A moderate return/moderate volatility portfolio for the taxable account (e.g. Bob's sandwich portfolio), and a more aggressive portfolio for the tax-deferred (since I won't be able to touch that for 20-odd years).
What do you think?