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Your two cents...
Old 10-11-2005, 07:40 PM   #1
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Your two cents...

Hi all.

Looking to ER in about 10-15 years. I know this has probably been touched on, but I think it might also help new visitors if you're willing to share your thoughts on this.

1. What type of portfolio composition would you expect the typical ER-type person to have as they try to accumulate money as fast as possible? Your thoughts on how to allocate stocks/funds/bonds/real estate would be appreciated. Many "experts" seem to give a bit of a blank stare because they don't believe in investing aggressively for short term (10 years). ("Four Pillars" has examples, but nothing specifically for this kind of ER strategy.)

2. Also, do you have some accounts (IRA, 401K) that seem "out of balance" within themselves, but are set up that way to give balance to the overall portfolio, or do you balance each one individually?

THANK YOU!
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Re: Your two cents...
Old 10-11-2005, 07:58 PM   #2
 
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Re: Your two cents...

Quote:
Originally Posted by Sisyphus
Hi all.

Looking to ER in about 10-15 years.* I know this has probably been touched on, but I think it might also help new visitors if you're willing to share your thoughts on this.

1.* What type of portfolio composition would you expect the typical ER-type person to have as they try to accumulate money as fast as possible?* Your thoughts on how to allocate stocks/funds/bonds/real estate would be appreciated.* Many "experts" seem to give a bit of a blank stare because they don't believe in investing aggressively for short term (10 years).* *("Four Pillars" has examples, but nothing specifically for this kind of ER strategy.)

2.* Also, do you have some accounts (IRA, 401K) that seem "out of balance" within themselves, but are set up that way to give balance to the overall portfolio, or do you balance each one individually?

THANK YOU!
1.) Investing for the short term usually involves conservative investments rather than making a lot of money. That's why you are getting the Blank stare. The longer you are invested you reduce some risk and volatility. So you won't find this strategy in 4 pillars.

Here is one strategy that makes a lot of money, but is also very risky. Go to Vegas and put all your money on red or black on the roulette wheel. In one short spin you double your money or go broke.

2.) It's fine to have accounts out of balance. Always think in terms of your whole portfoilo rather than accounts. This makes it easier to manage for tax advantages etc. - And it's only 1 number to keep track of.
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Re: Your two cents...
Old 10-11-2005, 09:43 PM   #3
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Re: Your two cents...

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What type of portfolio composition would you expect the typical ER-type person to have as they try to accumulate money as fast as possible?
In one answer - stocks or at least historically will offer the best return over time. Don't know about the 'fast as possible' clause. 10-15 time horizon and asking for ASAP way to accumlate wealth is kind of puzzling.
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Re: Your two cents...
Old 10-12-2005, 11:04 AM   #4
 
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Re: Your two cents...

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2. Also, do you have some accounts (IRA, 401K) that seem "out of balance" within themselves, but are set up that way to give balance to the overall portfolio, or do you balance each one individually?
Yes. I do this intentionally. I have more bonds in the tax-advantaged accounts and indexed equity funds in the regular accounts. Less taxes that way.

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Re: Your two cents...
Old 10-12-2005, 08:08 PM   #5
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Re: Your two cents...

To make more money, you usually need to take more risk.
If you don't mind the risk of the ER being delayed, I suppose you could do a slice and dice with rebalancing like in Bernstein, but with really large % to asset classes you expect to have a high return.
For example, 50% emerging markets equity, 0% cash/bonds, 10%US largecap, etc.

If you're lucky, 10 years and you'll beat the pants off most investors on this board. If unlucky, you'll have much less than you put in.
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Re: Your two cents...
Old 10-14-2005, 04:37 AM   #6
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Re: Your two cents...

What they said. Plus; spend less-save more, set the cruise control, have fun along the way. [Return here as often as needed for education-inspiration-feedback]
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Re: Your two cents...
Old 10-14-2005, 05:06 PM   #7
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Re: Your two cents...

Thanks everyone. I appreciate your comments.

For me, compared to the typical person, 10 years to retirement is pretty fast and is "ASAP"... I'm not even 40 yet.

I have about 5 years of my "ER" plan already behind me, but the learning never stops.

Thanks!
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