(02-26-2012 02:14 PM)zeeman Wrote:  Hi Guys, I usually lurk around and still a newb to game but I've fallen in love with the lifestyle you guys talk about. This is a theoretical financial portfolio I've thrown together for location independence that I'm thinking of implementing in the future.

***This is just a template based on current trends, yields, and interest rates, and currency values***

1. Living Income(passive income where-ever you go)
assuming 12k/yr, 1k/mth spending costs
yields on dividends on big blue chips can range from 2-6%, so I'll say
4% yield as income
capital needed = 300k
each increase in 1% decreases capital requirements significantly, if it's 6% yield you're looking at 200k principal
***this does not take into consideration inflation, taxes, currency fluctuations, and total apocalypse***
- under ideal circumstances you could buy brazilian 9-yr bonds at 10-11% coupon with a REAL coupon rate of 5-6%

2. debt/cash equivalents/short-term products that can be used in emergency

Cash equivalents:
US treasuries? (currently dubious, returning NEGATIVE interest rates)
*upside is these can be cashed in relatively easily
TIPS(Treasury Inflation Protected Securities)
*only 20-yr and 30-yr bonds are yielding positive interest rates at 0.39%-0.75%
**High Yield Debt** can be excluded from portfolio if you're uncomfortable with it
- corporate junk bonds yields >6% (make sure you look at the INTEREST COVERAGE RATIO on companies and their cashflow)
*sovereign debt that has a large flotation on the market:
canada, US, Brazil, China, Russia, Australia, UK, etc
**sovereign debt that's more speculative
- mongolia(>10% interest rates?), colombia, venezuela

3. Equities
**Index Funds/ETFs** - if you're lazy
Concentrated Stocks (10-30 companies) *personal favorite way 70% of equity portion in a la Peter Lynch/Benjamin Graham/Buffett way
speculative: <=10% of equity portfolio (crazy tech plays?)
active trading/opportunities in swings like earnings reports (riding the bull & bears?) 20%

4. Alternative Investments
real estate:
- farmland
- apartments
- commerical
- residential
- I know nothing about RE
Commodities
baseball cards?


The first priority would be to fill up section #1 for living income, or use it as a supplement, ex: 100k at 4% + teaching english abroad
Then would come the cash equivalents #2 which shouldn't be too much $ maybe 10-20k?
#3&4 would be something that grows over time after 1&2 are achieved. Or if you catch a big break you can pour 3&4 into 1&2 increasing passive income. Over the long run this should constitute the majority of the portfolio.

- the interest rates are just a quick grab of numbers, it's possible to get yields from REITs to about 5-10%
- I'm ignoring tax implications as well
- I'm also using pretty conservative rates, if you shop around countries and hunt for different products you can probably find better
- capital required seems high but I assume everyone here is ambitious and doesn't mind to hustle

so what do you guys think? (bear in mind this is just theory)