Author Topic: Maximizing Long Term Gains at 22 Years Old  (Read 2168 times)


  • 5 O'Clock Shadow
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Maximizing Long Term Gains at 22 Years Old
« on: September 08, 2015, 06:10:04 PM »

I'm 22 years old with current living expenses at about 12k/yr including expensive university, health insurance, and car and working that down to 10k/yr. My network is nearing 6 figures and I think it's time for a legit, stable Asset Allocation.

My time frame to invest is decades as I don't plan to sell but live on 3% dividends that's the average for my portfolio.

I'm debating on how to split it up, here's my current ideal based on 80% Stock, 10% Income, 10% Safety. The high safety is because I have a focus on early retirement and don't want to withdraw during down years. It also makes putting money into IRAs and HSAs much easier as I can lump sum it.

50% S&P or Total Stock - Bread & butter of broad cross section of businesses bound to do well
15% Emerging Markets- see below
5% Developed Markets- see below
10% Renewables - low price, high dividend, by 2020 renewables will be cheaper than oil
10% Lending Club/Peer to Peer - in IRAs, high cashflow
5% Short Term Government Bonds- safety for rebalancing
5% Cash- safety for consuming in daily life

What I'm really debating on is 15% in Emerging vs 20% in Emerging and no Developed.

My reasoning is that the Developed countries have already utilized most of their resources, have access to internet, stable economic structures, and are already developed economically. Whereas with a longer time frame, Emerging countries will gain access to internet, higher standards of living, more stable political and economic structures, and have a much higher capacity for growth and innovation than developed countries. Most of the world's population is in emerging countries and I see a huge opportunity there, especially with the recent Chinese stocks scare.

Can anyone think of a reason to keep Developed when Emerging is spread across a larger portion of the population with more capacity to grow economically when I have a long time frame and plan on living off dividends?

Thank you very much.


  • Pencil Stache
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Re: Maximizing Long Term Gains at 22 Years Old
« Reply #1 on: September 08, 2015, 06:18:58 PM »
I'd drop the bonds since you have Lending Club. Not the same I know, but it works and you can withdraw from LC to re-balance as needed. I'd drop the cash and just maintain a 3-6 months emergency fund in cash. If you set it at 5%, it will eventually be way more than you need. Then I'd probably drop renewables and put that into developed markets. The 50% should be in Total Stock Market so that it includes small/mid cap.

Edit to add: I don't hold developed or US large-cap stocks myself.
« Last Edit: September 08, 2015, 06:30:24 PM by GGNoob »


  • Bristles
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Re: Maximizing Long Term Gains at 22 Years Old
« Reply #2 on: September 08, 2015, 06:23:15 PM »
Companies from the developped world also stand to benefit from emerging nations.

I think that they might even be able to get the lion's share in some cases.


  • 5 O'Clock Shadow
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Re: Maximizing Long Term Gains at 22 Years Old
« Reply #3 on: September 09, 2015, 05:48:50 PM »
Okay, I see what you mean on Lending Club already acting like a bond store. Though I have no plans of selling notes and there is also specific risk of Lending Club going broke.

I currently have to have a higher cash balance to pay off education without that pesky debt but once I have a decent buffer I agree that it may be overkill.

How about

5% Renewables
5% Cash Savings - In case emergency or massive sale on stocks.