Investment Policy Statement

Disclaimer: I reserve the right to tweak my IPS statement at any time but what I won’t do is sell when the market crashes. Notice I said when because crashes are inevitable. As history has shown us, the market rebounds and when you look at it in the long-run, there are many dips but it always goes up. The key to investing in the market is to use it as a long-term investment strategy.

There are three asset classes to invest in:

  1. Paper asset class
  2. Real estate asset class
  3. Business asset class

Paper Asset Class

My current investment strategy is heavily weighted in the paper asset class. I have an emergency fund in an online money market account which will cover 6 months of expenses. I call this my POM (Peace of Mind) fund. Additionally, my POM fund has enough extra money in it to buy a new used car when my current old car dies.

I invest in low-cost index funds and while I’m in the wealth accumulation phase I have the approximate asset allocation of 90% equity funds/10% bond funds. I will be rebalancing annually. As I approach the wealth preservation phase I plan to become more heavily weighted in bond funds as well as cash.

I am currently maxing out 3 different tax-advantaged accounts:

  1. Employer-sponsored Simple IRA – Vanguard Total Stock Market Index Fund Investor Shares (VTSMX)
  2. Health Savings Account – Vanguard Total Stock Market Index Fund Admiral Shares (VTSAX). I max this out annually but 25% goes to a cash account/debit card for health expenses.
  3. Roth IRA – Vanguard FTSE Developed Markets ETF (VEA).

I have recently opened an after-tax brokerage account where I plan to purchase:

  • Mid-Cap Funds
  • Small-Cap Funds
  • Individual Stocks – This is a fun experiment. I will only invest an amount of money I’m comfortable losing. I will, however, spend a little time studying the companies whose stocks I plan to purchase.

Real Estate Asset Class

My plan is to enter the real estate market within the next 5 years. I’m currently growing my POM fund to include monies for a down payment on a property. Most likely I’m considering a duplex so that I can house hack by living in half while renting half.

Business Asset Class

I plan to grow my blog and am thinking about how I can most effectively help others with my experiences and skillset.

Furthermore, I paint and am contemplating selling my artwork.