The Breakdown of the Frugal Expat Asset Allocation

Asset allocation is all about how you break down your assets into different categories. Some people break down their assets into categories such as stocks, bonds, and real estate. I have broken down my portfolio to show you what I own.

My Investment Strategy:

The strategy I use with money is to: 1. Spend Less than you make 2. Stay out of debt 3. Invest the Rest

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With the left over money we have, we put it into investments. I like to use the method of a 3-Fund Portfolio. So we have our money in: – VTI  – VXUS – BND .

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Our Asset Allocation:

The Emergency Fund is essential:

I would suggest to people to have an emergency fund that covers 6-8 months of expenses. So we are going a little bit above that. Each person should decide how much is enough to get by.

The Investments that I hold:

We are pretty simple when it comes to investing. Diversification is key so we have our investments into 3 funds that will give us exposure to over 10,000 different companies across the world.

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Expense Ratios:

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A lot of times, people hire financial advisors, which is perfectly ok. What is the cost of having someone invest for you? At the moment, the annual expense ratios are around 0.04% of my portfolio. With more managed mutual funds you could be having expense ratios closer to 0.50%-1%. Expense ratios could start eating into your returns. 

Our Goals for Finances:

Our Goal is freedom. I like having the ability to walk away from work. Financial Independence is our major goal. It just gives us more options for life.

The hope for our finances is to let compounding and our simple strategy create wealth and financial independence for us in the long run.

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