2019 Investment Policy Statement

Laying down the FI plan as at 2019.

Objective

• Reach FI and work part time, bonus would be retiring early

At this stage reaching FI and working part time seems to be the most viable option where I can get some balance. As this will be reviewed yearly the initial investment number I am working towards is $389k split at about 49% invested outside super and 51% inside super. On top of this is a paid off PPOR(Principal Place of Residence) and 1 year of expenses as a separate emergency fund.

The how

• Invest in a diverse portfolio of Index Funds/ETFs keeping expenses low
• Re-balancing with quarterly investments

At this stage as I do not have a big chunk of cash to allocate to investing monthly I will be buying quarterly to make it more cost effective. After a year I might re-evaluate to see if I need to change this frequency.

Asset Allocation

• 50% Australian stocks, 30% International and 20% Fixed Interest and Bonds

Currently looking to build up my portfolio outside Super as per below;

1. A200 40%
2. VSO 10%
3. VGS 20%
4. VGE 10%
5. VGB 5%
6. VACF 5%
7. Other Fixed Interest 10%

Other Considerations

Things can and do change. This is my initial stab at getting numbers to work towards and will review yearly. The numbers are currently based on a yearly spend of $25k. I feel like having a paid off PPOR is almost equal to FI and this would be where I would feel most comfortable to start working part time. I will be covered if I can get part time work where I net between $20k to $30k a year. I don’t think my lifestyle will change drastically in terms of spending. The $25k currently includes rent, one international holiday a year and several local trips. Any additional income from investments and eventually Super will be a bonus that will help me decide on pulling the plug and retiring. No changes to Super, I am just going to let it do it’s thing for now.

Where am I now

Just breaking things down to have an overall view as at the May 2019 numbers. I have allocated more cash towards the house deposit and this is the amount under PPOR below and the $300k is my ideal purchase price for simplicity.

• Emergency Fund $5k out of $25k – 20%
• PPOR $36.5k out of $300k – 12%
• Investments $8.8k out of $189k – 5%
• Super $44.4k out of $200k – 22%
• Total $94.7k out of $714k 13%

This is my current plan what are your thoughts? What other things should I consider? How did you build out your FI or FIRE plan?