The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: HeadedWest2029 on January 06, 2016, 10:07:12 AM
-
It seems the consensus is to exclude savings outside of retirement and brokerage accounts when calculating asset allocation. In general I go for a lazy 3 fund portfolio with 70% U.S. total market, 20% International total market, 10% fixed income. I also keep 6 months of expenses in an online savings account (I know, I know...wimpy scaredy cat). My question, does anyone include their EF / savings account in the fixed income portion when calculating their AA? I'm pretty consistent about keeping at least 6 months of expenses in that account so if I include it I'm over 10% fixed income, if I exclude it I'm under 10%. I suppose it's not too important either way, just curious how others handle this. Also, I exclude my P2P lending account. I consider P2P lending to be at least as risky as stocks. I suppose I could just make an "other" category. I do include P2P when calculating FIRE though.
-
I have two AAs- one investments plus cash and one which also includes house equity. Of course I cant rebalance house equity, but it's good to know.
Really, it doesnt matter if you include EF or not - just make a plan and stick to it. My EF is $5200 HIS cash plus $21K short term bonds, to be spent in that order if needed. My 30% fixed income allocation includes the short term bonds, but not the cash. When I have more than $8200 cash, it gets invested.
-
I guess the SEC thinks cash should be included in AA. Good enough for me
http://www.sec.gov/investor/pubs/assetallocation.htm (http://www.sec.gov/investor/pubs/assetallocation.htm)
-
savings deposits, certificates of deposit, treasury bills, money market deposit accounts, and money market funds - are the safest investments,
If the cash is invested, or even in your investment account, then absolutely its included. Thats not the question though.