I have had access to eMoney for a while and always suspected that the portfolio income estimate was too high so tonight I created a Personal Capital account and imported my Schwab accounts.
Personal Capital has my income slightly higher for a portfolio yield of 3.8%. My portfolio has a lot of individual stocks, Dow stocks in particular, ETFs, and bond mutual funds with an 80% stock 20% bond allocation.
I have a small amount of closed end funds with high distributions, less than 2% of the portfolio and 1.5% in MLPS- unfortunately. In other words, I am not juicing the distributions with BDCs etc. Not much in preferred stocks either- this is pretty plain vanilla.
I think 3.8% seems like a pretty high yield even with this pull back, but I suppose all of the dividend increases over this bull market make it possible.
If this is the case, though my portfolio is down $1.2mm from $8mm I am still feeling like I have enough retirement cash-flow to retire @ 49 this summer, i.e. I don't need to sell anything to cover my income requirement of $240k, $260k pretax. This is almost all non-qualified money.
It's funny because after refinancing my $500k mortgage in this down turn, I cut my mortgage expense by $6k per year so now my budget matches my income for the first time now that the market is down 20%! Crazy!
The only potential hitches are my mortgage- I only include my interest and not the principal portion in my expense estimate and now that my rate is 2.5%, if the loan closes, I get a 1.3% spread in income between the 3.8% yield and that will gradually disappear if the market goes down over the next 15 years repaying principal or if I see a lot of dividend cuts.
I am actually more worried about the dividend cuts than a market decline in many ways. I think that this Coronavirus scare will blow over and eventually the oil market will come back into balance after some pain so I actually think with the economic stimulus of lower energy prices, mortgage rates and fiscal stimulus, this downturn could end up extending the cycle or paving the way for a recovery after a brief recession.
Am I being too optimistic? Does personal Capital overestimate income? Finally, I am holding an extra $250k in cash right now and I have estimated income on that investing now, should I repay half that 2.5% mortgage and reduce income by $9.5k!
?
Personal Capital has my income slightly higher for a portfolio yield of 3.8%. My portfolio has a lot of individual stocks, Dow stocks in particular, ETFs, and bond mutual funds with an 80% stock 20% bond allocation.
I have a small amount of closed end funds with high distributions, less than 2% of the portfolio and 1.5% in MLPS- unfortunately. In other words, I am not juicing the distributions with BDCs etc. Not much in preferred stocks either- this is pretty plain vanilla.
I think 3.8% seems like a pretty high yield even with this pull back, but I suppose all of the dividend increases over this bull market make it possible.
If this is the case, though my portfolio is down $1.2mm from $8mm I am still feeling like I have enough retirement cash-flow to retire @ 49 this summer, i.e. I don't need to sell anything to cover my income requirement of $240k, $260k pretax. This is almost all non-qualified money.
It's funny because after refinancing my $500k mortgage in this down turn, I cut my mortgage expense by $6k per year so now my budget matches my income for the first time now that the market is down 20%! Crazy!
The only potential hitches are my mortgage- I only include my interest and not the principal portion in my expense estimate and now that my rate is 2.5%, if the loan closes, I get a 1.3% spread in income between the 3.8% yield and that will gradually disappear if the market goes down over the next 15 years repaying principal or if I see a lot of dividend cuts.
I am actually more worried about the dividend cuts than a market decline in many ways. I think that this Coronavirus scare will blow over and eventually the oil market will come back into balance after some pain so I actually think with the economic stimulus of lower energy prices, mortgage rates and fiscal stimulus, this downturn could end up extending the cycle or paving the way for a recovery after a brief recession.
Am I being too optimistic? Does personal Capital overestimate income? Finally, I am holding an extra $250k in cash right now and I have estimated income on that investing now, should I repay half that 2.5% mortgage and reduce income by $9.5k!
?
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