Author Topic: How do you consider this diversification of my Net Worth?  (Read 1967 times)

sonny

  • 5 O'Clock Shadow
  • *
  • Posts: 2
How do you consider this diversification of my Net Worth?
« on: September 30, 2014, 03:23:31 PM »
Hello everyone, a new user here.

I am 32. My net worth is $275,000 and I've diversified in the following way:

Bank deposits, cash and cash-equivalents: 51%

Stocks (US, European, World -- mostly diversified ETFs, but also some individual stocks; no leverage): 42%

Life insurance: 3%

Pension funds: 3% (my private IRA; plus I have some skin in the whole government-run pension system in my country, but my current payments are being spent on current retirees and I have a "promise" for a pension in the future, so I don't count it in my NW).

Gold: 1%

I have no debt.

I own no real estate (renting). I admit I am a bit uncomfortable having no real estate holdings/investments, however I live in a middle income country and the real estate market is not developed, so consider it a bit risky. Plus the rent\price ratio is not great.

If anyone feels like making a suggestion, please do. Much appreciated.
« Last Edit: September 30, 2014, 03:25:05 PM by sonny »

RetireAbroadAt35

  • Stubble
  • **
  • Posts: 222
Re: How do you consider this diversification of my Net Worth?
« Reply #1 on: September 30, 2014, 03:29:01 PM »
I'm just posting to say ... 51% cash, wow! 

I hold about 1% of my NW in cash but I'm fortunate enough to live where I have access to investments that will appreciate/provide returns reasonably safely.

Is there anything you can do to put that 51% to use?  Do you need that much liquid cash available?

I can't make specific recommendations because I don't know what the options are in your nation.

sonny

  • 5 O'Clock Shadow
  • *
  • Posts: 2
Re: How do you consider this diversification of my Net Worth?
« Reply #2 on: September 30, 2014, 03:40:13 PM »
I'm just posting to say ... 51% cash, wow! 

I hold about 1% of my NW in cash but I'm fortunate enough to live where I have access to investments that will appreciate/provide returns reasonably safely.

Is there anything you can do to put that 51% to use?  Do you need that much liquid cash available?

In regards to cash, I have to mention that they are in deposits earning a nominal rate of 3.5% (currently there's deflation of 1% in my country). So the real interest rates on CDs here are higher than in the US.


I can't make specific recommendations because I don't know what the options are in your nation.

I have almost every possible option. The only asterisk is the real estate situation I mentioned in the OP.
« Last Edit: September 30, 2014, 03:44:14 PM by sonny »

akdfjlkajsd;lkfjs;lk

  • 5 O'Clock Shadow
  • *
  • Posts: 5
Re: How do you consider this diversification of my Net Worth?
« Reply #3 on: October 09, 2014, 09:13:07 AM »
Way too much cash for my liking, even with a better interest rate than the US gets. The rest is solid, and what I would look to do. I personally want to have 5% of my net worth in hard assets (gemstones for me, gold for you). Maybe take some cash and buy some REITs/a REIT index fund, if you feel you need real estate exposure?

Le Barbu

  • Handlebar Stache
  • *****
  • Posts: 1040
  • Age: 47
  • Location: Québec
  • I really didn’t say everything I said - Y. B.
Re: How do you consider this diversification of my Net Worth?
« Reply #4 on: October 09, 2014, 09:56:15 AM »
what are the options in your country ? (or wich country do you live?)

if this country stock market is trivial (compared to the US), you could still have a home bias up to 20-35% so it doesnt hurt. I'm in Canada so, even if my country is 4% of the world economy, I got 30% of my portfolio toward it.

You're young, no debt etc. why wouldnt you invest 35% in US stock (VTI), 30% in the ex-US stock market (VXUS) and keep only 10-20%CDs + some REITs or domestic stock index ?

I have 0.1% of my net worth in cash btw and put almost everything (90%) toward stock since 1998