I respect the collective knowledge of this community and am hoping everyone can help me understand if I'm missing something in my AA.
My FIRE timeline is as follows.
- Married (H36/W34)
- 6 years of accumulation until FIRE @ $50k/yr (conservative: mortgage + 2 children + expenses)
- + ~15 years of FIRE w/kids
- + ~10 years of FIRE before 60yo
- + ~30 years of tRetirement
My current allocation is designed to be as follows.
Class | % Total | Tax Status |
Cash | 3% | Mixed |
Bond | 10% | Tax Deferred |
Stock | 80% | Mixed |
REIT | 7% | Tax Deferred |
My actuals from PersonalCapital are as follows.
Class | % Total |
Cash | 0.47% |
Intl Bonds | 1.03% |
U.S. Bonds | 7.69% |
Intl Stocks | 1.33% |
U.S. Stocks | 79.62% |
Alternatives | 9.83% |
U.S. & Intl Stocks are in VTSAX, VTSMX, FUSVX, and CEQX#
U.S. & Intl Bonds are in VBTLX
Alternatives are majority REIT in VGSLX (9.78%), minority "other" from VTSAX, VTSMX, FUSVX, and CEQX#
PersonalCapital is making a big deal out of Intl Stocks and Bonds re: diversification. Most of the reading that addresses this on the ER boards seems to suggest that a Total Market Stock/Bond fund has enough Intl exposure built in. I'm comfortable with that, however, PersonalCapital seems to suggest a more substantial 70/30 split between U.S. & Intl Stocks (of my 80% Stock AA).
I'm not a "tin-foil hat wearing prepper" when it comes to things like holding all of my money at a single institution (Vanguard), or largely in U.S. Stock. I'm prepared to be wrong on both accounts, but believe that if/when that becomes an issue, we'll have bigger things to worry about than returns on portfolios. (Which is why I'm diversifying through Mustachian skills acquisition like gardening, carpentry, and mechanical/electronic repair).
That said, am I truly only giving up a hedge on volatility not being heavier into Intl Stock, or is there something else I'm missing.
Also, given my FIRE timeline, does my AA design seem reasonable for accumulation? I'm willing to trade off being aggressive now and leveraging side hustles now and when FIRE. What am I missing?
Any suggestions on things to keep in mind when transitioning through different stages of FIRE? How should I be considering protecting essential capital in FIRE vs. getting too conservative?
Sorry this is a bit all over the place. Thanks for your input!