Hello folks,
I have a question that’s probably on the complex end—apologies in advance. In a nutshell, the question is: “What asset allocation do you recommend for FIRE?”
Here’s the context.
In most of his posts, MMM tends to avoid asset allocation entirely, saying you could just have your funds 100% invested in a total stock market index fund and be alright. But if you read the Bogleheads (and most of the people even on THIS forum), NOBODY is entirely in equities.
The problem, though, is that even when you read posts on asset allocation on this forum, people tend to still say “increase your percentage of bonds as you get closer to retirement,” which is Boglehead and general retirement thinking. However, if you truly want to FIRE on a timeline running from zero investments to retirement in 10 years, the standard philosophy of asset allocation, and increasing your percentage of bonds the closer you get, will not get you to Financial Independence unless you’re just throwing a ton of cash at it.
Many people on this forum also say, “choose the asset allocation that helps you sleep well at night.” Well, the asset allocation that would help me sleep well at night is the one that has no risk of loss and would allow me to retire in about 12 months. As far as I know, that allocation does not exist.
So, my question to you remains: "How would you recommend allocating your assets as you save for FIRE, aiming to achieve Financial Independence in ~9 years, give or take?”
Please feel free to share the allocation you’ve personally chosen, and why.
Also, FWIW, I’m not really interested in hearing from the folks that are posting on here and are like, “I’m 30 now and I plan to retire early at the age of 55.” If that’s you, you're missing the point.