Post by steelpony10 on Jan 4, 2022 21:30:30 GMT
steadyeddy ,
Absolutely separate dedicated investments into separate groups. This means pure safe, growth and income sections.
1. Safe = cash, AAA bond funds, treasuries or munis or a combination of these for example. Plan B money.
2. Growth would be individual stocks or funds on dividend reinvestment because you don’t need the income you need the long term capital gains and favorable tax treatment. Long term means you won’t need the money for over a year. For big purchases and extras.
3. Income would again be individual stocks or funds for cash flow to supplement basic living monthly and yearly expenses.
We never allocated or diversified we walled off or sectioned investments. The start point logically to us meant part 3. Many will never get by that because they don’t have enough money, are too conservative, don’t want to do the analysis, leads to an end plan etc.
Our experience was starting with dividend payout, stocks, utilities, Reits etc. which basically yielded a few percentage points more then our personal inflation rate, tied up any long term capital gains and required nearly all our savings at the time. So cut the lifestyle or take more risk?
Having experienced a 35 year+ retirement with our parents we basically learned on the run. We discovered retirement has a U shaped spending curve. You may need large cash flows at the beginning and end of life. We found CEF’s provided a large cash flow to start and enough money to build parts 1. and 2. which after 12 years we have. Dividend reinvestment, time, market largesse and excess income keeps building those sections. This gives us the option of spend down later in life, going all in with CEF’s (how much growth do you need after 85?), living off of tax favored long term gains or keep the same combination we have now.
Our portfolio consists of cash maybe two years, a muni probably 10 years our current needs but this is a hands off set aside for possible LTC leaving a spouse on the outside, 3 equity indexes VTI being the core and 11 CEF’s in a TIRA with VTSAX (VTI) to DCA monthly excess to needs cash flow. As far as splits we started 20/40/40. Now thanks to being overweighted with tech for years until it’s not the Wall Street darling we’re closer to 20/45/35. We’d like to end up all VTI, spend down long term capital gains only or go all in for more sure cash flow with CEF’s in the end. Greed leads me towards VTI fear leads me towards CEF’s. 🤞🏼🙏🏼🤞🏼🙏🏼
Edit: With our one remaining parent we finished with #1 and an all CEF #3 in a taxable account. 50/50. The rationale being better go with the more sure cash flow after age 90.
Absolutely separate dedicated investments into separate groups. This means pure safe, growth and income sections.
1. Safe = cash, AAA bond funds, treasuries or munis or a combination of these for example. Plan B money.
2. Growth would be individual stocks or funds on dividend reinvestment because you don’t need the income you need the long term capital gains and favorable tax treatment. Long term means you won’t need the money for over a year. For big purchases and extras.
3. Income would again be individual stocks or funds for cash flow to supplement basic living monthly and yearly expenses.
We never allocated or diversified we walled off or sectioned investments. The start point logically to us meant part 3. Many will never get by that because they don’t have enough money, are too conservative, don’t want to do the analysis, leads to an end plan etc.
Our experience was starting with dividend payout, stocks, utilities, Reits etc. which basically yielded a few percentage points more then our personal inflation rate, tied up any long term capital gains and required nearly all our savings at the time. So cut the lifestyle or take more risk?
Having experienced a 35 year+ retirement with our parents we basically learned on the run. We discovered retirement has a U shaped spending curve. You may need large cash flows at the beginning and end of life. We found CEF’s provided a large cash flow to start and enough money to build parts 1. and 2. which after 12 years we have. Dividend reinvestment, time, market largesse and excess income keeps building those sections. This gives us the option of spend down later in life, going all in with CEF’s (how much growth do you need after 85?), living off of tax favored long term gains or keep the same combination we have now.
Our portfolio consists of cash maybe two years, a muni probably 10 years our current needs but this is a hands off set aside for possible LTC leaving a spouse on the outside, 3 equity indexes VTI being the core and 11 CEF’s in a TIRA with VTSAX (VTI) to DCA monthly excess to needs cash flow. As far as splits we started 20/40/40. Now thanks to being overweighted with tech for years until it’s not the Wall Street darling we’re closer to 20/45/35. We’d like to end up all VTI, spend down long term capital gains only or go all in for more sure cash flow with CEF’s in the end. Greed leads me towards VTI fear leads me towards CEF’s. 🤞🏼🙏🏼🤞🏼🙏🏼
Edit: With our one remaining parent we finished with #1 and an all CEF #3 in a taxable account. 50/50. The rationale being better go with the more sure cash flow after age 90.
