Here’s our very first basic investment plan which lays out our goals, target return and asset allocation strategy.
Investments should allow us to be financially free by 2027, while our net worth should last us till age 100!
Target: ~7% minimum annual return [why 7%?]
Target Investable Asset Allocation for end-2025
[Read about how we came up with these ratios]
p.s. This is just what we decided was best for ourselves, and is not a recommendation!
What do these Assets consist of?
Real Estate
Does not include primary residence
High grade commercial or industrial preferred
Leverage as much as possible with semi-flexi or full-flexi loans
Foreign properties – none yet
Equity
Low-cost, Irish-domiciled index ETFs preferred
Diversified across the world for long-term outlook and lower volatility
Do not utilize stop losses for index ETFs
Continue to add positions in a bear market
AVOID high-free unit trusts like the plague!
Fixed Income
Long-term treasury or investment-grade corporate bonds or bond funds
Bonds can be kept in AUD, SGD or USD for currency diversification
Pension fund (EPF) counted as Fixed Income
Short-term treasuries such as SGOV counted as Cash
Cash
Max out cash in loan account of primary residence (highest effective interest rate)
Emergency fund: 2 years’ worth of expenses and mortgage repayments
Remaining cash as dry powder for real estate or equity opportunities, or planned one-off purchases
Stored in high-yield savings accounts, money market funds, short-term treasuries, fixed deposits or full/semi-flexi loan accounts
Alternatives
Cryptocurrency
Gold
Artwork
Collectibles
Current Portfolio
Execution Strategy
Monthly earnings to be invested into stocks and fixed income according to the asset allocation percentages, i.e. 30% of earnings into stocks and 10% into fixed income/pension fund.
Additionally, the excess cash should be deployed to make up the current shortfall of 21% for equity and 5+% for fixed income in the coming year (divide by 15 months roughly to hit targets by end-2025).
At least once per quarter, I update our net worth + asset allocation spreadsheets to monitor execution success and top up/rebalance as necessary. I also calculate investment performance returns to see if target ROI is on track for the overall portfolio.
Weaknesses
Projected Cashflow is currently insufficient to meet our income target by end-2027 without resorting to principal withdrawals. This is because real estate loan repayments and expenses are negative cash flow and cannot be covered by rental income yet.
Equity breakdown needs to be defined further. We currently buy a mix of VWRA, SPYL and IUIT but have not fully decided on what % we want to be invested in the US vs Global.
Future Improvements
This basic investment plan should be fully-fledged out into an Investment Policy Statement in the future.
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