I received some great feedback, from you, wanting to know more about my asset allocation and thoughts behind what I am doing with my money. So here we go! Before we get into the details, this is by no means what I am advocating for you to do. This is simply a July update of how my current assets are broken down. ⠀⠀⠀⠀⠀⠀⠀
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Again, my asset allocation for the month of July looks COMPLETELY different than it did last month. This is part of the fun of keeping track of the journey and walking through how I am strategically moving my money around to put myself into a better position to create additional horizontal income streams.
Below is a pie chart showing the breakdown of my assets:
The main difference between June and July is the percent of my total allocation that’s cash. Last month my cash allocation and invested allocation were exactly flipped. I went from a weak cash position to a high cash position with the intent to invest in my cousin’s bar with an ownership stake of 2%.
From an actual dollar’s breakdown, here are the figures:
I am sure you might be thinking, TheYoungRetireeBy33, what does “Unrealized” mean? Unrealized, to me, means I “technically” have this money, but until I receive it or sell something, the money is not real. I like to track this because it gives a complete picture of my asset allocation. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
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To me, two things fall into this category. The first being unvested stock I have with my company. Each year I receive what are called Restricted Stock Units (RSU’s). RSU’s are stock distributions my company pays me. These vest 25% every year for four years. For example, last year I received a grant of $55k in RSU’s or 532 stock units. In March of next year, I will have 133 units vest. At the point of a unit vesting, I can sell or hold for the long term. I plan to hold all vested units as I believe in eCommerce and what my company is doing. ⠀⠀⠀⠀⠀⠀⠀⠀⠀
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The second “Unrealized” asset I have is the equity in my home. I believe any estimated equity I own in my home shouldn’t be considered as an asset. Yes, if I were to sell my home tomorrow I should be able to come out with the money, but until I decide to sell, the equity I own in my home is Unrealized. I am still following up on the appraisal that was ordered for my home to see if I there are going to be any options to leverage my homes equity to purchase more assets! More to come on this front in the future! ⠀⠀⠀⠀
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I will say, next month’s allocation is going to look completely different as I have been focusing on repositioning myself with more horizontal income streams! My goal by the end of the year will be to have 7 horizontal income streams producing a split of 30% passive income and 70% active income.
More to come in the very near future!
Key Takeaways:
- It is okay to reposition your assets depending on what is occurring in your life. The one thing I would be careful of is how to most effectively do this for tax purposes. If you want to learn more about an “advanced” tax strategy of how I am going to end up saving $15k in taxes, checkout this post.
- Understand and track the difference between real assets and what I consider “Unrealized” assets. It is important to just note. I would prefer for most of my assets to be realized, but at the same time, I do have a decent chunk of change that is Unrealized.
- Using cash to purchase more assets is never a bad thing. Especially when you have a long term plan! Don’t liquidate a bunch of assets to be sitting on cash you have no plans of using. If you have a plan, and it is the right thing to do, go for it!
Do you know how your current assets are broken out? This was the first time I have ever understood how mine were broken out. It is interesting to see and be self-critical of what I am doing and how I am doing it.
