Investment Positioning Explained: EDU #2631

If you'd like to skip past Jim, Chris, and Jacob's opening chat about Jacob relocating to Iowa, Jim's hiking plans, weather, office dog Apollo, and generational pop culture gaps, skip ahead to (10:00).

Chris's Summary
Jim and I continue our discussion on the Fun Number™, joined this time by Jacob as we turn to investment positioning of those pieces. Jacob walks through tracking positions without professional software, using individual fund assignments, spreadsheets, and a two-credit-card approach, plus the liquidity account and fall tax planning. We then cover delay period and post-delay Minimum Dignity Floor™ investment options, moving from full principal protection in the near term to a lesser degree of it further out.

Jim's "Pithy" Summary
Chris and I pick back up on the Fun Number™ series, this time bringing Jacob on to tackle investment positioning, the piece everybody asks about once they've done the math from the first two episodes. Jacob spent years helping me build this from scratch, back when we tracked everything by hand before we ever had access to professional-grade tracking software, and he shares some of the tools do-it-yourselfers can use to keep track of their own toy box of positions without that kind of software.

We also dig into the liquidity account, the piece that quietly connects your positions to your actual spending. Jacob's two-credit-card idea for separating Minimum Dignity Floor™ from fun spending ties directly into it, and I explain why we do our tax planning once a year, in the fall, rather than guessing all year long. There's a reason we'd rather convert to a Roth than take a straight withdrawal when refilling that account, and it comes down to what happens if your plans change.

Once Jacob turns to investment options for the delay period and post-delay portions of your essential spending needs, we get into how the degree of principal protection shifts depending on how far out that money is needed, from fully protected in the near term to something with a little more market exposure further down the road. This is the heart of what I call the See-Through Portfolio™, the whole reason we break things out this way instead of running one big portfolio, and there's a real difference in how we treat money a couple of years away versus a decade out.