an intersting read on how the "other half" lives ...
Over time and as a general rule, Tiger 21 members say they have learned that spending 3% of assets annually to live is the maximum one can spend each year before stressing one's portfolio and tilting it towards short-term income over long-term gains.
And, they say, holding 9% of assets in cash allows them to withstand three years of market distress without having to liquidate long-term holdings at unnecessary losses.
It's interesting to note the conservative nature of this asset allocation, especially given the increased weighting toward private equity investments. The data seem to show that while these high-net-worth investors are only willing to shave off 3% of their portfolio for living expenses (at $10 million, let's say that's $300,000 a year), yet they are willing to increase their exposure to what seems like riskier investments: hedge funds and private equity instruments.
Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!
You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!
This community was started in 2002 as an alternative to a then fee only Motley Fool. The focus of the discussions is on topics related to early retirement and financial independence. The community is moderated to ensure a pleasant experience for our members.