Maximizing Long Term Gains at 22 Years Old
I'm 22 years old with current living expenses at about 12k/yr including expensive university, health insurance, and car and working that down to 10k/yr. My network is nearing 6 figures and I think it's time for a legit, stable Asset Allocation.
My time frame to invest is decades as I don't plan to sell but live on 3% dividends that's the average for my portfolio.
I'm debating on how to split it up, here's my current ideal based on 80% Stock, 10% Income, 10% Safety. The high safety is because I have a focus on early retirement and don't want to withdraw during down years. It also makes putting money into IRAs and HSAs much easier as I can lump sum it.
50% S&P or Total Stock - Bread & butter of broad cross section of businesses bound to do well
15% Emerging Markets- see below
5% Developed Markets- see below
10% Renewables - low price, high dividend, by 2020 renewables will be cheaper than oil
10% Lending Club/Peer to Peer - in IRAs, high cashflow
5% Short Term Government Bonds- safety for rebalancing
5% Cash- safety for consuming in daily life
What I'm really debating on is 15% in Emerging vs 20% in Emerging and no Developed.
My reasoning is that the Developed countries have already utilized most of their resources, have access to internet, stable economic structures, and are already developed economically. Whereas with a longer time frame, Emerging countries will gain access to internet, higher standards of living, more stable political and economic structures, and have a much higher capacity for growth and innovation than developed countries. Most of the world's population is in emerging countries and I see a huge opportunity there, especially with the recent Chinese stocks scare.
Can anyone think of a reason to keep Developed when Emerging is spread across a larger portion of the population with more capacity to grow economically when I have a long time frame and plan on living off dividends?
Thank you very much.