September 21, 2008

My Current Asset Allocation

Looking at all of our assets this is how much percent we have in each category:

Real Estate 60%
Cash 16%
Pension plan 14%
Equities 5%
Bonds 3%
Employer stock 2%

Graphically our current asset allocation looks like this:Looking at the different categories:

Real Estate - We have about $145k equity in our home. In addition we also have about $236k equity in 4 separate rental properties. We hold 2 mortgages on the rentals for about $254k so we're only about 50% leveraged. The rental investments also give us an annual cash flow from rents as well as significant depreciation deductions for our taxes.

Cash - This is money held in savings accounts. Most of it is in high yield accounts giving 3-4% return. We like to have a large emergency fund. The money is between 3 banks primarily and is all FDIC insured.

Pension plan - I have an employer provided pension plan. That money is managed by my employer so I have no say in its allocation. I'm 100% vested in the pension.

Equities - These are mutual fund and stock holdings in our 401k and IRA retirement plans. These investments are relatively high risk.

Bonds - A portion of our retirement funds are invested in stable income assets.

Employer Stock - I have a few hundred shares of stock in my employer. I've been divesting my holdings for the past few months because I feel its not a good idea to have stock in your own employer. Plus I also have stock options so if the value of the stock goes up in the future then I can cash in that way. Right now I've got my investment down to a relatively small amount and I'm going to hold on to it for a while until the stock rebounds.

Overall I feel our assets are quite safe. Its possible that our real estate investments may go down some in the next few years but those are long term investments that I expect will appreciate again in coming years. We have very little of our investments in high risk assets.

No comments:

Post a Comment

I'm starting to get too many spam messages in the comments so I'm turning on moderation. Please be patient and wait for your comment to be approved. Note it may take up to a few days for approval, thanks. I've also had to remove anonymous posting of comments to cut down on spam and pure stupidity.

Blog Widget by LinkWithin