Where I Stand @ 39 - Please Offer Your Comments & Advise

[jcnyc]

CDs, at least in my neck of the woods are already at 2%+. At the very elast, put your cash in a HY savings account. As for stocks, put them in some boring but safe dividend champions and watch your divis skyrocket and it'll make yourself feel better about FIRE prospects. Trust me on this. Otherwise I think you guys are doing pretty good! 800k in a 5% divi yielding portfolio is $40k/yr which is enough to live in quite a few places around the world

 

[ponyboy]

Way too much cash like everyone else said. Investments are too light. Theres some work to be done but you still have time. Sadly you missed out on one of the longest bull runs in history sitting on all that cash. Not to say the run will not continue...no one knows. Time to dca and let your money work for you.

 

[jzajzz]

Cash in underrated. Cash is a valuable tool, especially for a self employed individual. Can you make more money by investing in your business?

Cash allows you to take advantage of opportunities when they present themselves. That could be in your business, that could also mean other markets.

if it were me, I would probably allocate more to the market as well but if it's not you .. don't feel ashamed that you have cash. Just use that cash to grow elsewhere.

 

[freedomatlast]

If there was one thing I could have done differently over the last thirty years, it would have been to have a higher AA of stocks when I was young. I wouldn't be FI now if I didn't change course and go to a high AA of stocks 20+ years ago.

 

[ShortInSeattle]

Hey OP,

It sounds like you've made great strides since your last update! I recommend Rick Ferri's book All About Asset Allocation to help you pick your stock/bond Percentage. To put it bluntly, without an investment portfolio that appreciates in value, you're not going to retire early. So if you're serious about ER, it's time to get past that mental block.

As a point of comparison, I'm the same age as you, I consider myself quite conservative (for my age) when it comes to the market, and my split is 35% bonds & cash, 65% equities.

SIS

 

[nwsteve]

You don't mention if you are taking advantage of a self employed IRA. You can shelter a major chunk of your earnings with this vehicle and save taxes on every dollar that goes into.
I used Fidelity for this vehicle while I had my own business--really added to our net worth over time. There was no cost for this service and very easy to setup.

 

[karen1972]

Its sounds like your extremely conservative, and thats ok. It won't make you rich, but if you sleep well at night, thats important. Actually you sound a lot like my father who it took me years (maybe decades) to slowly migrate money into investments.

Try to figure out a number of what in cash would make you feel ok. Is it one years worth of cash ($50K) or two years ($100k)? Plus your expected college expenses. Whatever it is, make it a hard number and then money above that can be moved to something producing more income.

Even if you took two years of income, you could split it 50/50 and put $50k in a 1 YR CD which would give you more than what you have right now.

Then look at dollar cost averaging some of that other money into the market. That way your not putting it all in at one time, you can split it up into as tiny of sections as you need to to feel comfortable, whether you take the exra $100K+ and split it into 12 months or 24 months or whatever, you can get it into the market slowly, but it should go into something. Maybe you even should go to a financial advisor (I know lots on here wont but if you are that concerned, finding someone else that you can trust may be a better option)... talk to friends/family, someone will know someone they do trust... again it doesn't have to be all of it, but maybe a small portion just to get you in.

 

[HarveyS]

I'm not trying to be mean, but you need professional help and soon. Find a good CPA and a good financial advisor. Pay them for a couple of hours work to educate you on your specific position. You don't know what you don't know. For instance, "I'm being raped by inflation", and "I would rather have a physical location to be able to go to in the event of a problem" and "I simply do not see value in most of the market today".

Calculate your specific inflation and you will likely see lifestyle creep is adding at least as much to your costs as increases in price of what you are buying. Exclude insurance and home owners fees and your costs (item by item) are likely going down. Physical banks close all the time. Having a building there does not mean that vault is full of cash and at your disposal. You don't see value in the market today because you don't understand the market. In the last 12 months you missed 30+% gains. Educate yourself with the help of professional teachers.