Where do you invest your travel savings when you’re accumulating money for a big trip? How do you invest and draw down on it while you’re on the road? And what about other savings, like retirement, or the proceeds of the sale of your house?
Welcome to the wonderful world of asset allocation.
There is no template answer to these questions. Your personal asset allocation plan depends on your age, time frame, goals, income needs, and stomach for volatility. And depending on your goals (you can have multiple investment goals, independent of one another), you might have different asset allocation plans for different investments.
Here is my asset allocation plan:
This is a high-interest guaranteed savings account that I draw on when needed, or add to if my income exceeds my expenses, as it often does.
I initially invested the proceeds from selling everything I owned in a Conservative account, so that I’d have the money available to me whenever I wanted to set up a place again.
But a few years into my full-time travels, I realized I wouldn’t likely be “settling down” any time soon, so I increased the risk profile of the account to Moderate Conservative to take advantage of some potentially higher growth