Investing - Theory, News & General • Re: Bottoms-Up approach to determining an Asset Allocation

Yes, in that it provides us with clear ways segregate our money between our Taxable, Tax Deferred and Tax free accounts, target compounding interest rates to stay on track above the discount rate and asset allocation with time horizons etc. Most importantly, We feel free to spend asymmetrically during our Go-Go years.

I am less in love with some of Jim’s names, but I like his concepts.

GOAL—————————————-HORIZON————————————INVESTMENTS————————————-ACCOUNTS
Delay Longevity————————4 Years——————————-Cash, Treasury Bonds——————-————Brokerage
Post-Delay Longevity———11 to 19 years——————————40/60 Portfolio——————————-———IRA #1
Aging & LTC————————-——0 Years————————-——-Cash, 40/60 Portfolio————————-——-IRA #2
Buffer Assets—————————-Variable——————————-Cash, 60/40 Portfolio———————-———Roth IRAs
2nd Car————————————-13 years——————————-Cash, 40/60 Portfolio—————————-——IRA#3
Lifestyle————————————30 years—————-Cash, Treasury Bonds, 40/60 Portfolio—-—————IRA #4
Travel————————————10 to 20 years——— Cash, Treasury Bonds, 40/60 Portfolio—-IRA #3, IRA #4, Brokerage

We probably could simply from 4 IRAs down to 3 IRAs, but this keeps goals segregated and it is easy to assess how one is doing along the way. We used a 3% discount rate that should be achievable with a conservative asset allocation.

I adapt some slight difference to their nomenclature, but it is basically their approach.

Delay Longevity (Delay of SS)
Post-Delay Longevity (their MDF)
Aging & LTC
Buffer Assets

For discretionary spending (their fun vision) we have.

2nd Car (treat this separately because it is not through the entire plan)
Lifestyle (more everyday desires that make life more pleasant)
Travel (again, biased more towards Go-Go years)

Are you finding their approach to a See-Through Portfolio and Positioning helpful?

WoodSpinner

Statistics: Posted by iim7V7IM7 — Tue Aug 13, 2024 2:34 pm

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