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Asset allocation for FIRE physicians

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  • Asset allocation for FIRE physicians

    Those of you are thinking of retiring soon, are you decreasing your percentage of stocks in your asset allocation? Or do you have a fixed dollar amount in liquid safe investments and keep the rest in riskier assets? Just wondering when we seem to be in a bull market that is near historic in its duration.

     

  • #2
    I am doing both. I am recently 52 and expect to go part time in a few months and plan to retire from practice sometime before my 55th birthday

    I have a large cash position, about 10% of the investable net worth, and an overall 60:30:10 stock:bond:cash allocation. Or, you could strip out the cash bucket (which in a pinch we could live on for 3-5 years), and say that I have 67:33 stock:bond allocation.

    I have drifted from an 80:20 allocation, ten years ago, to the current allocation, and I believe that this will be how I manage the nest egg going forward. I hope to have some sort of side hustle to keep me busy and productive thereafter.

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    • #3
      I too am doing both.  I am 60 and working 3 days per week.  I am 65/35.  I have about 2 years of expenses in mmf and short term bond fund.  I have sold all investments that generate a k1.  Not sure of my retirement date.

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      • #4
        45 and moved from an aggressive growth and real estate expansion to a more balanced growth and accumulation -- increasing bonds and paid off loans to move into a pure cash flow in real estate;

        towards 55 will move more to 66/33 equities/bonds but not much further since have real estate and pension flows to balance.

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        • #5
          50 years old 150 percent stock portfolio except for 5 years expenses in cash.

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          • #6




            50 years old 150 percent stock portfolio except for 5 years expenses in cash.
            Click to expand...


            Do you mean you have 50% borrowed and invested? 1500 total invested, 500 home mortgage?  And nearing retirement?

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            • #7
              Margined portfolio.  i.e. borrowed 50 percent of value of portfolio and invested it in stocks.....will retire whenever I decide to, maybe next week maybe 10 years from now

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              • #8




                Margined portfolio.  i.e. borrowed 50 percent of value of portfolio and invested it in stocks
                Click to expand...


                I really do wish you the best with this strategy, it just seems awfully risky to me.  You're on the far end of the risk spectrum with this one.

                I'm a little ways away still, but my plan is to shift my ratio to more bonds as I approach retirement, though probably never less than 60% stocks.

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                • #9
                  I'm at 40:40:20 (stocks:bondsther).  It seems to work well for me. Growth with minimal volatility.  I don't see a reason to change unless after a big stock crash I would consider increasing my stock %.

                  I definitely would not be at 150% with current equity valuations.

                   

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                  • #10
                    Currently 41 y.o., 90 / 10 Stocks / Bonds + Cash

                    Plan to retire from medicine in a year or two, and will hold 5 years' of anticipated expenses in bonds, something in the range of $350,000 to $400,000 between my 457(b) and 401(k). That will require a slight shift towards bonds initially, but I'll still be > 85% stocks, and will still have some blog income, which allows me to be comfortable maintaining an aggressive portfolio, as does the fact that I will have oversaved.

                     

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                    • #11
                      Wow pretty diverse responses. I once read that a leveraged portfolio of 50% 2X Long ETFs and 50% Bonds would outperform 100% long stocks with less volatility. Seemed logical but I think it was difficult to manage in reality with increased costs.

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                      • #12




                        Margined portfolio.  i.e. borrowed 50 percent of value of portfolio and invested it in stocks…..will retire whenever I decide to, maybe next week maybe 10 years from now
                        Click to expand...


                        Honestly I think more people with stable incomes should consider incorporating leverage into their portfolios.  I know it isn't for everyone and this board skews towards the debt averse, but margining your taxable account is a way to create transformative wealth.

                        I would only suggest considering this if you have a stable income, and I probably wouldn't consider margining a retirement account, but it depends on the stability of your income and your ability to replace the assets through earning and saving if the market collapses.

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                        • #13
                          Agree 100 percent.  I always figured that I would just work 10 more years if needed.  It is almost impossible to generate multigenerational wealth by doctoring alone.  Swinging for the fences often results in striking out, but with care and diligence one can improve the odds of hitting a home run.

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                          • #14
                            I am 100% stocks currently (variable allocation in the stocks that can be seen on my site). I am not looking to retire for at least 9 years (age 46) and maybe 48 if I go to 90% part time. I am trying to bank in a minimum of 10 years so that I can get vested into our pension before leaving. If I still am enjoying work maybe I will work at 60% until I am 55 (early retirement) or 60 (full early retirement).

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                            • #15







                              Margined portfolio.  i.e. borrowed 50 percent of value of portfolio and invested it in stocks…..will retire whenever I decide to, maybe next week maybe 10 years from now
                              Click to expand…


                              Honestly I think more people with stable incomes should consider incorporating leverage into their portfolios.  I know it isn’t for everyone and this board skews towards the debt averse, but margining your taxable account is a way to create transformative wealth.

                              I would only suggest considering this if you have a stable income, and I probably wouldn’t consider margining a retirement account, but it depends on the stability of your income and your ability to replace the assets through earning and saving if the market collapses.
                              Click to expand...


                              Define "transformative wealth."
                              Helping those who wear the white coat get a fair shake on Wall Street since 2011

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