I’m a big believer in measuring progress, otherwise you can’t manage what you don’t measure and if you can’t manage, you are less likely to reach your goals. Every month I sit down a take a look and check the balances of all my accounts – banking, investing and real estate. I started this probably 3 or 4 years ago, actually with the goal of checking them less often. For a while there I got a little obsessive about checking my portfolio and checked it every few days. I figured if I made this into a process then I would feel less stressed to check it more often. I also have really benefitted from a monthly check to ensure that everything looks right, i.e. no errors or fraud or anything. Finally, it’s been really great from a motivation standpoint – tracking slow and steady progress each month helps keep me focused!

Then, twice a year I actually measure the overall percentages to understand where I’m keeping my money. I break up my overall portfolio into: cash, equities, real estate and then alternatives. I’m still trying to figure out what my ideal percentages are, and I don’t think there’s any one right answer – every one will be different in terms of their stage of life and/or financial goals that they’ve set for themselves. For example, Mrs. Money and I enjoy working in real estate and so it shouldn’t be surprising that real estate makes up a decent portion of our portfolio. I enjoy tracking over time and seeing if I need to make small (or big) tweaks here and there!

Here’s where we stand as of June 2023:

• Cash 5% (down 1%)
• Equities (both retirement/and non-retirement) 52% (up 5%)
• Real estate 43% (down 4%)
• Alternative 0.06% (basically the same)

As mentioned; I don’t think there’s a perfect strategy or answer but here are some observations that caught my eye:

Do I need more cash?

When I started this in the summer of 2020 (of what a time to be alive), our cash was at 10% of our portfolio. Back in 2020, interest rates were super low on savings accounts (like maybe 1%) and equities were roaring ($VTI – my favorite index fund grew 21%) and I decided to move from cash into equities. That worked well in 2021 ($VTI grew 25%) but not so well in 2022 (down 19%) but so far in 2023 it’s up 15% so overall I think that was the right call.

However now in mid-2023 people are feeling (at least I am) a bit more skittish about the economy and jobs and so now I’m wondering if we should bulk up cash for a rainy day fund. We do have an emergency fund where we have probably 3-4 months of expenses and both Mrs. Money and I are thankful to be gainfully employed right now. Or as Buffet likes to say, ‘be greedy when others are fearful’ and maybe our cash is fine at 5%? We are buying a new car this summer, which we saved up cash for so our cash percentage will probably dip down, a bit but I imagine at the end of the year when I check again it might be back up to 5%. I don’t think I’ll make any drastic moves but I think if I had an extra dollar I might let it sit in a savings account for a few months!

Do I need gold?

Ha, so this is a bit farfetched here but I from time to time think about holding a little gold in my portfolio – something that would fall into the alternative category (which for the record is all crypto right now). I owned 1/10 of an ounce of gold coin in college mostly for fun and it was actually a bit tricky to sell – a pawn shop said they’d have to scratch it (i.e. slightly damage it) to ensure it was pure gold which makes sense but I ended up selling it back to the dealer I bought it from – they have a buy back guarantee. Some financial minds recommend some gold/precious metals, but Dave Ramsey doesn’t (amongst others).

Maybe this comes from the time that I worked at an Army/Navy surplus store for 6 months out of college before I got my first real job and ran into a lot of preppers there, but there’s always a part of me that wants to plan for the worst. I don’t think this is a dumb idea entirely – I’ve got an emergency kit in the car with some food, matches, water, emergency blanket etc and have some extra gallons of water around the house (which one time the water was shut off at the house for maintenance so the emergency water helped!). So as part of this exercise it would be logical to think about some gold – maybe as a hedge against inflation which has been tough as of late, but if there was a zombie apocalypse then I don’t think people would care for gold they’d care for food/water but that’s a hole extra layer to think about. I feel like the charts I look at gold vs inflation or gold vs stocks aren’t overwhelmingly telling me to buy gold.

Then there’s also bitcoin which I haven’t totally quit and still low key really believe in but don’t feel that confident to put in too much money maybe $5 here and there.

Thanks for indulging me in this thought exercise. As much as I’d like to dream about owning a few percentage points of my portfolio in gold, I just don’t think that’s the best investment decision for me right now!

Happy with equities and real estate

Finally, I’m pleased with my real estate and equity percentages – they’ve hovered in the high 40%s and I feel good about them being there!

TLDR

Twice a year I sit down and figure out where my portfolio is sitting: cash, real estate, equities and alternative investments and my summer 2023 check revealed a similar steady trend from the past checks! I might try to increase cash a percentage point or two but nothing major planned moving forward!