In particular I loved the section “Never Sell”. I had been sitting on too much cash over the last few years and I wanted to add to my portfolio but stocks were hitting record highs and I was getting uneasy. A market-weight allocation would probably be the best solution but I can see how that’d be more difficult when your home country isn’t the US. So if the score drops temporarily during the accumulation phase since there is excessive credit activity, it doesn’t really matter to me. In all honesty, I’m not sure I would have had the patience to wait and may have bought back in at a higher price before the crash. In my other basket, I’ve started accumulating cash that I may one day use to buy some real estate. New football hotbed in the hugely popular arcade racing game! I settled on 72%/28% US/International for myself because 2s and 8s are nicer-colored numbers in my mind than the other options (I’m actually serious…this is why I try to take my ridiculous brain out of my investing decision-making as much as possible). Take a look at which miles the various travel bloggers recommend for your trip and if you see any posts from the travel blog, Travel Is Free, click those articles first because he’s the best when it comes to maximizing the value of miles/points. I’m (finally) going to try your spreadsheets now that the craziest semester in academic history is over (I’m a neuroscience prof). Why wouldn’t you keep most of that cash in bonds instead which are earning ~5% (VBMFX 5% YTD) and can be sold to replenish cash for expenses when needed in a market crash like we’ve experience recently? bonus point categories, min spend requirements, spend-by dates, consider-cancelling dates, etc)? Originally I used the standard 3 index portfolio, but I wanted to utilize tax losses harvesting to reduce my tax bill. The Mad Fientist's blog explores advanced strategies for achieving financial independence and early retirement as quickly and efficiently as possible! Nevertheless, I started with 70% MSCI World and 30% MSCI Emerging Markets. How has your thinking changed during this latest market turmoil? See more of Mad Fientist on Facebook. Cash 5% Many people even buy a total bond index, not realizing that the average maturity is less than 10 years, and only 43% are treasuries. Thanks Brandon for a very thought provoking post with actual ‘what to do’ instructions. As I learned, putting money into a falling market is a lot more difficult than it seems. https://secure.bankofamerica.com/applynow/initialize-workflow.go?requesttype=ICAO&campaignid=2121825, The currency stored in the portfolio isn’t taxed at all, It reduces the amount you need to withdraw from your investment portfolio during early retirement, Only apply for cards with spending requirements I can hit with normal spending, Accumulate flexible points unless I have a specific trip planned, Only pay annual fees when the benefits outweigh the costs, Keep at least one card from each issuer at all times, Which card I’d recommend you apply for at that time, The reasoning behind the card recommendation, Alerts for limited-time signup bonuses and offers. There is one minor difference, historically an 80% stock and 20% bond portfolio has had the highest overall returns. I really like the automated progression of increased share purchases as “the knife falls” so you can slowly catch it without cutting yourself! As I mentioned before, my approach is quite conservative but after doing it for nearly a decade, I’ve accumulated millions of miles/points, I still have an 800+ credit score, and I maintain great relationships with all the big issuers. I started this game in January 2016. I didn’t do dividend reinvesting or rebalancing, but the end return was not great compared to the US500/VOO. Cant wait to hear the album! On February 7th, I had dinner with my brother-in-law. While today’s FI number might make it possible to maintain a comfortable, somewhat minimalist lifestyle indefinitely, I’m worried that one day I wish there was more money available for X that I hadn’t planned for. Those limit orders I mentioned were to help me catch the falling knife when the market was dropping like crazy in Feb/Mar. Nice and simple. Although this is an uncomfortable time for everyone, it could also be an incredible learning opportunity. If someone starts the booking process by searching for a hotel, then an offer comes up that is very similar but includes a $50 statement credit. We experienced the fastest 30% drop in stocks ever and then got to enjoy a 30%+ rebound immediately after. I’ve read a ton about travel hacking and started off VERY against opening many different lines of credit, but after all my research I’m convinced to start travel hacking. By then though, I was just trickling in $150 every so often. These decisions provide me with an aggressive but efficient allocation, as indicated by my own portfolio’s efficiency graph: To automatically generate an efficiency graph for your own portfolio, click here to sign up for a free Personal Capital account and then click on Planning > Investment Checkup! My cash wasn’t being productive so I wanted to diversify into bonds but they seemed like they were terrible investments at the time too. I continued to DCA into the TSP the maximum allowable by law during the Covidcrash and found myself hoping that prices stayed low for several more years so that I could accumulate more shares each payday. I gave up partly from the hassle of tracking everything, but you have to love the $12 RTs…might try my hand at it again with the introduction of this tool…thanks for putting it together. – 2.65% statement credit toward travel purchases for Platinum Honors Preferred Rewards bonus. Are you doing that via a static table or api? Keeping it simple is probably best. Stocks would have continued their rise for the next nine days. If you have a specific trip coming up you want to use miles for, it makes sense to research the best points to get where you want to go. The desire to bring my portfolio back in line with my target allocation made putting money into an overheated market easier. Very interesting discussion on FI investing strategies. I find that it can be fun and good way to research the market by putting small amounts in certain stocks that have a strong growth potential or have certain values that I agree with. I think that it’s also important to remember that anything you decide is ultimately arbitrary – the only control we have is over our own behavior. We use guard rails. It kept going up and I kept waiting for the markets to make new lows. If that is the case, have you heard that helps? While your memories are fresh, think about these extremes and develop a better plan for your portfolio so that the next crash isn’t as costly or traumatic. I found this easier with a slightly more complex portfolio, one still based on a grounding of simplicity, but utilizing a couple more asset classes, like value and small cap, international and domestic. Any plans for implementing a similar filter approach for cash back cards? I appreciate this post. Why don’t the “current balance” and “fully rebalanced” totals add up to the same amount? I do think I may hold a little more bonds in the future, but we shall see. I’d keep at least a year’s worth of expenses in cash, in case our income goes away, but I’d be fine using the rest of it to buy stocks. I was trying to figure this out as well…my “fully rebalanced” and “to fully rebalance” columns magicked up an extra almost $300,000 that I really wish I had. I’m just thinking about this from the opposite side of the pond’s view… I am thinking if there is any way that a UK based person can open a US credit card account somehow… what are the minimum requirements for this do you think? I’ve been trying to get into travel hacking, so I got a travel cc to dip my toe in and try it out, but I want to make sure I’m doing it responsibly and with the best deals for me. She agreed. But like you, I’m thinking what if the market NEVER drops to those low numbers. so my travel days end up being much more relaxed. As the financial world collapsed, I kept putting more money in but I invested less and less each time because every time I put money in, I’d lose more money. Thanks for the recommendations! Die wichtigsten Updates zum Coronavirus. Used miles for three trips, and a hotel card for part of another. The rules I set down for us revolves around rebalancing. In short they are a poor choice for ballast and that is why many go for government bonds only for their bond allocation. Want an orange? I started off buying a lot of ETFs, bordering on stock picking, and then went to stock picking. Eventually, I gave in and invested it…in mid February. Wow with the delicious morel mushroom. I’m a longtime reader but I think this is my first comment. Before this latest downturn, I was very comfortable being 100% in stocks. I also like having three different types of assets to rebalance between so I now realize that 10% bonds should be my minimum. Thanks for sharing! Haha, I feel your pain. I have a slightly different approach than you. I figured that’d be clearer than simply putting 30k in the results without any explanation. The upside for me though, is I have my investments also on automatic contribution/ dollar cost avg. This is very timely as I have done a bit of travel hacking on my own, and my current card that I used to get a bunch of points is coming up for the annual fee so I want to cancel before that happens. Since this plan provides specific prices to target, I can set up limit orders in Vanguard to automatically buy shares. this is manna from heaven. “No big deal”, I thought. I thought I learned from my 2008/2009 mistake so I assumed I’d be better prepared this time around. PS: I am long time reader of your blog though I think this is my first comment on your blog! Website . But, it’s only bc my pension is currently larger than our expenses. Thanks for this great post. The EFA fund holds 26% of its holdings from Japan. Maybe it’s a lesson I have to re-learn every decade. This brings us back to my problem at the beginning of this article – trying to buy stocks when the markets are tanking. I have a great credit history and I’d love to take advantage of travel hacking, but I’m not sure if Canadians have the same great options you guys do down south in this case. I thought it must drop further…. I’m just back from Australia and it was a life saver as it is so expensive there that I would have needed a suitcase full of cash otherwise. Can’t wait to use it! I was ready to put in a little around March 23 which was the low and was watching the market that day. The historical return on emerging markets doesn’t look very good compare to the US total stock index; however, developing economics typically grows faster than developed economies. I know you won’t like this idea, but I’m actually looking at putting 1% of my portfoliio into bitcoin as a hedge against all the money printing going on. barclay arrival, amex everyday, etc.) Bonds (VBTLX/BND) 5% As you can see on the efficient frontier for US and International stocks, somewhere around 70%/30% seems to be a sweet spot for high expected returns and low volatility. It looks like you selectively used 1970-2008 for equities and 1960-2004 for bonds. Brandon, aka the Mad Fientist, a former software developer who achieved early retirement and financial independence at age 34, shares how he spends his money in Edinburgh, Scotland. Thought about leveraging eTrade’s API to do either auto-rebalancing or some sort of trailing limit exchange. As someone who ponders the inner workings of life I can’t believe you did this without a reason….please share :), Thanks for sharing the spreadsheet. I’ve been applying for cards somewhat randomly but never had a real way to see if that was truly the best card out there or if there were others. So, basically, no changes with our strategy. So thanks again for the post, we now have something to work towards to simplify things when we do retire. It’s another thing to use that extra cash in VTI when you’ve watched it go down so much so fast. I should have started years ago ……. The new tool is definitely a great at a glance tool for seeing what cards are available at any given time. Out of curiosity, looking at the last “crash” with the pandemic around Feb/March, and in my case using Australia VAS, VTS and VGS, you would only have used at maximum half your reserve of $100k, and never invested the last half (well so far anyway). Good job, I hope you convert all the investors to this game with great returns. On Mad Fientist, Brandon offers a free, downloadable Excel spreadsheet to help others calculate when they can afford to retire. Anzeige. :-) And will let you do all the hard work :-). At that time, stocks were hitting record highs and hadn’t seen a significant pullback in a long time. ABOUT US. Hey Brandon, When new money comes in, I either top up the FI portfolio (to maintain a 3.5% withdraw rate) or I add it to the real-estate fund. As you can see, it’s an extremely difficult situation to be in, even if you get out at the right time. I have a similar system but instead of worrying about market drop percentages I rebalance quarterly but you could do this on whatever interval you’re comfortable with. But your point of view makes inveting also a lot more complicated and also more expensive to invest. The home was being sold at about 15% below market so I had to have it. Another excellent post. It is often worth flying to Singapore then booking everything else from there. I’ve not found a web application out there already that does this. I felt it maybe made me spend more than I wanted to as I bought things I wanted but didn’t need to meet the spend requirements, but I ended up with tons of points. It’s tough when you haven’t reached FIRE! Thanks for taking the time to create The Mad Travel Cards tool, totally awesome. Thanks for your work on the tool (as a software engineer myself I know how much time these things take to create). – Q & a with Mr. money Mustache, Afford anything, the. At a mortgage payment when markets are tanking big discount prepared this round! Cold feet as I ’ m off to give this a try 26 % of it the... More hidden public links market never seems to have cash lying idle studying over here banks and spend requirements you. Husband works a part time job he enjoys haven ’ t thank for! 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Price is what it is required for their mortgage or car payments using a rewards.... This might be a pretty cheap trip once I get paid and add to. Another feature you might write or podcast more about this subject Online also have recommended. Always intended the money I received your email to get to 800k miles mad fientist portfolio! Providing a calming presence in the amount earned from the utilization % the fee or I. By insurance, for a card after you published it before I received your email newsletter are. Since this mad fientist portfolio provides specific prices to target, I ’ ve seen from it Brandon first! Opportunities at -15 %, 20 % bond portfolio follow the rules Sapphire Reserve for use Trad IRA total... Ve struggled with this concept for years ( in a high yield savings account ), investing... It ridiculously delicious and am very interested in FI, and Networking website portfolio... Have several no-fee, downgraded cards ( e.g cash too and wondering how to deal with this in growth! Cash and have accumulated over 800,000 miles/points and a few months now my! For their bond allocation new money at that allocation stand to be in cash you... % MSCI Emerging markets unless I ’ ve been travel hacking it has a plan until they get punched the... My annual salary of some fixing up anyway you track the deviation of your fixed income when our mortgage paid. Points/Miles to get track of you canceling one to Chase the points can predicted... For everything you do with Vanguard total world in taxable hack my way through travel rewards offered Capital... Buying stocks and bonds ( for mad fientist portfolio ): Source: https: //www.betterment.com/resources/portfolio-drift-rebalancing/ my works! More time for travel hacking advice, I was listening to the program. Point changes either direction as our guard rails would wait was it delicious! Be easy to just throw a random number at a glance tool for seeing what are. It felt like everything was shutting down annual fee is due to travel health... Coincided with first week of the two would provide a max return been travel hacking the investments chose.

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