@Seth M. Jones. I thinks it’s hard to gauge as a asset % because of leverage. Let’s say I have $1,000,000. I could put 500,000 into stocks and 500,000 into real estate. Through a heloc/mortgage, I can buy another house worth let’s say, $500,000. Then I’d have $500,000 in stocks and “$1,000,000” in real estate. From a cash flow prospective, maybe starting out, 50/50 might be good. But as time goes on, the “cash flow” allocation will change naturally by itself and I wouldn’t try to control it.
I don’t know if I’m seasoned or not but here are some approximate raw numbers.
Stocks: $1,000,000
Dividends received: ~$30,000/year
So I’m at about a 3% return (dividends/cashflow) and I don’t have to do a single thing. The stock price appreciation is a nice bonus. Through compounding interest, I should gain an extra $1,000+ in dividends a year (3% of 30,000). I will continue to let it do it’s thing because I don’t have to do anything. Literally. I wake up, company abc pays me. I go back to sleep.
Real estate: $400,000
Gross Cash Flow: $2000/month $24,000/year
Then got to take out property tax/insurance ($5,000/year), gather up $10,000 for repairs, vacancies. Then it’s hard to factor in tax benefits. So simply put, I expect $12,000/year + amazing tax benefits
So this is extremely one sided for me because I just started in real estate. We just bought our first house all cash in Sacramento, CA. Officially closing 5/16/19!
So I plan to be scaling my real estate portfolio a lot quicker than my stock portfolio currently. An asset allocation % goal is not on my mind. And with leverage, who knows what it’ll be. I always liked safety so I will go with 50% down payments for my next house.
And now cash.. when it comes to stocks, I like to have a 0 cash balance. For the most part, the stock market has gone up and to the right.
When it comes to real estate, I plan to have a pool of money I can safely swim in. I forgot who exactly does/said this but I plan to keep $10,000 cash reserve for repairs/cap ex because my monthly cashflow let’s me handle most repairs but just incase Anything major comes up, I’m not screwed. As I buy more properties, I might bump up my cash reserve to $20,000/$30,000/etc.
when it comes to personal finance. I have a checkings/savings/Roth ira. I’ve been traveling a lot more lately so my savings has been dropping but I keep a hopefully comfortable amount which I believe is about $100,000 rn.
I do this all with my fiancé and a handful of pets.
I believe asset allocation is an ever changing thing and only good for broad based decision. I hate the minor tinkering many people do. 1% here, 2% there. Now when my cash falls 20/30% then I can make a decision on how to get that back to a comfortble
Level (which is my problem now).
Then comes in our weird collections. My fiancé and I collect Jim shore Disney pieces, Mary Francis purses, gold/silver/bullets, gemstones/crystals, and cat figurines. I like to think they all have some value. I don’t expect them to retain value or grow in value but it’s fun. At the end of the day, remember to have fun.
