Eric reallocated his investment portfolio, sold out of his 100% equity position and he’s not happy about it. In this two-part episode, you’ll learn why and how he’s making peace with it. Ensuring that your investment portfolio can fund your lifestyle for the duration of your lifespan is essential to success in FIRE. One of the most impactful elements of that is how your portfolio is constructed, or your asset allocation. In part one, Eric discusses his desire to reduce the risk of his portfolio with Jason, and ensure he + Laura are set up for success. Topics discussed include the role of bonds + fixed income, the types of investment risk, seeking feedback from internet forums, and tax considerations.
Note: This content does not constitute investment advice and is being presented for informational and educational purposes only.
Pick up where part 1 leaves off with a bonus, behind-the-scenes look at Eric and Laura’s decision-making process (video below).
Show Notes
Essential Background: If you haven’t watched our previous episodes on asset allocation (part 1 and part 2), this is highly relevant material to our discussion here.
Vanguard’s Principles of Investing Success is a really great read. It’s chock-full of information, including the chart showing average returns by asset mix (pp. 10) that Eric referenced in this episode. Whether you’re just getting started with investing or are very experienced, we suspect you’ll find something of value in this easy read.
How To Build A Retirement Paycheck: This is the first of three great Retirement Manifesto posts on author Fritz Gilbert’s implementation of the Bucket Strategy, which we have touched on several episodes to date. Here you’ll find guidance on how to determine the asset allocation you’ll want to have in place by the time you retire early. The other two articles in the series are linked here as well.
Financial Independence: How Long Will It Take? We showed visuals from this Go Curry Cracker post, which highlights the dramatic impact that your overall savings rate has on determining your FI timeline. This concept is also covered in the “Principles of Investing Success” article linked above.
You can find information on the tools we mention in each episode along with additional information in the Resources section of this site.
- Jason’s FI Blog
- Eric’s business: 30X40 Design Workshop
- Eric’s YouTube Channel
- Our podcast