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Ideal personal assets distribution

twister_teddy
Posts: 123 Forumite

I am looking for some guidance around ideal personal assets distribution for optimal growth aiming for financial independence.
Some stats around my personal situation as below.
Current age : late 30's
Financial independence aim : Age 45
Current annual expenses (net) : £35k
Current annual Savings rate : Around £50k
Risk profile : High risk averse
Current Net worth : Around £650k
Current assets distributed as below.
Some stats around my personal situation as below.
Current age : late 30's
Financial independence aim : Age 45
Current annual expenses (net) : £35k
Current annual Savings rate : Around £50k
Risk profile : High risk averse
Current Net worth : Around £650k
Current assets distributed as below.
Assets (Real estate, residential and rental) : 58%
Assets (Personal pension - Invested in passive funds) : 25%
Assets (ISA Stock equities - Invested in passive funds) : 7%
Assets (Other liquid assets) : 8%
Assets (Cash) : 2%
Couple of points / questions as below.
- What should be ideal asset allocation proportion aiming for growth over next 10-15 years, at the moment the only assets which have shown good growth is the pension and ISA stocks (invested in equities) which collectively make 32% of total assets.
Assets (Cash) : 2%
Couple of points / questions as below.
- What should be ideal asset allocation proportion aiming for growth over next 10-15 years, at the moment the only assets which have shown good growth is the pension and ISA stocks (invested in equities) which collectively make 32% of total assets.
- I understand to maximise the investments I should first contribute and max-out towards pension being high rate tax payer, however anything contributed there will be locked till age 57 (or possibly later) which doesn't allow an earlier financial independence.
- I do have one rental property yielding in the region of 10% per annum however growth is almost zero. At the moment I would rather have a growth asset as opposed to regular income. However as I reach closer to FI, I would like to convert the assets to income generators.
- I do have one rental property yielding in the region of 10% per annum however growth is almost zero. At the moment I would rather have a growth asset as opposed to regular income. However as I reach closer to FI, I would like to convert the assets to income generators.
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Comments
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Your property % seems much too high. However I dont think you should count your home as part of your assets for retirement planning unless you bought an expensive home as an investment and intend to downsize. Even then you should only include the money you would make from downsizing.0
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Assets (Personal pension - Invested in passive funds) : 25%Assets (ISA Stock equities - Invested in passive funds) : 7%Passive funds can be high risk or low risk .
You say you are highly risk averse but that they are invested in equities , which does not add up .
Can you clarify what you are actually invested in ?0 -
Linton said:Your property % seems much too high. However I dont think you should count your home as part of your assets for retirement planning unless you bought an expensive home as an investment and intend to downsize. Even then you should only include the money you would make from downsizing.
The reason property % is higher because my savings strategy has been in the order of (First - pay mortgages, second - Pension, Third - ISA etc). That has caused some imbalance and now the property assets are proportionally higher. Even though the mortgage interest rate is very low compared to the growth from the invested stocks/funds.
I can indeed move the property equity to pension or ISAs (and invest in stocks/funds) however I need to have a healthy balance and not tip the balance too much.0 -
Albermarle said:Assets (Personal pension - Invested in passive funds) : 25%Assets (ISA Stock equities - Invested in passive funds) : 7%Passive funds can be high risk or low risk .
You say you are highly risk averse but that they are invested in equities , which does not add up .
Can you clarify what you are actually invested in ?0
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