{"id":135917,"date":"2025-03-15T21:31:49","date_gmt":"2025-03-15T21:31:49","guid":{"rendered":"https:\/\/peraltafinancing.com\/business\/investing\/retirement-investing-today-real-life-portfolio-returns\/"},"modified":"2025-03-15T21:31:49","modified_gmt":"2025-03-15T21:31:49","slug":"retirement-investing-today-real-life-portfolio-returns","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=135917","title":{"rendered":"Retirement Investing Today: Real life portfolio returns"},"content":{"rendered":"<p> <br \/>\n<\/p>\n<div id=\"post-body-5396549074844139594\" itemprop=\"description articleBody\">\n<div dir=\"ltr\" style=\"text-align: left;\" trbidi=\"on\">\nI was recently reading a FIRE blog post, from a couple who are still very much deep in the <a href=\"http:\/\/www.retirementinvestingtoday.com\/2019\/11\/1-year-and-10-year-fire-anniversaries.html\">swim phase of the FIRE triathlon<\/a>, where the post was exploring who in society has the opportunity to FIRE if they so choose.\u00a0 Of course as many of us FIRE bloggers love a good spreadsheet, the weapon of choice for exploring this was an Excel model and a whole pile of assumptions.\u00a0 Two of these assumptions were that we were living in a hypothetical world where there is no inflation and where the expected annualised investment portfolio return was 7%.\u00a0 So to my reading a critical assumption in their Excel model was a real (ie after inflation) portfolio return of 7%!<\/p>\n<div class=\"MsoNormal\">\n<br \/>\nI\u2019m much further on the FIRE journey than these good folks being in the triathlon bike phase having now been FIRE\u2019d for a little over a year and having been on my FIRE journey for around twelve years.\u00a0 At one end this means I have more experience and data than these folks but it also means I\u2019m more grey, grizzled and cynical.\u00a0 With that warning out of the way to me that real 7% return assumption just seems way to bullish!\u00a0 So I then asked myself why are they using such high returns in their model as not for a second do I think they are trying to deceive?\u00a0 The simple answer I came up with is that the vast majority of FIRE blogs are from people who are pre-FIRE with many never having witnessed a bear market so they have no real life data, only published financial data.\u00a0 Then from those that are FIRE\u2019d I am yet to see transparent long term portfolio returns shared.\u00a0 So today\u2019s post aims to do just that.\u00a0 Put a stake into the ground where hopefully your comments and other bloggers posts will tear my investing performance apart showing me to be either a poor, average or good investor.\u00a0 With time that might help us all fine tune the expected returns we can all plug into our much loved spreadsheets.<\/p>\n<p><a name=\"more\"\/>My portfolio performance is an annualised number covering my investment performance from the end of 2007 until the present day.\u00a0 This means the portfolio saw the vast majority of the Global Financial Crisis bear market and the bull market since.\u00a0 The portfolio has also seen annual investment expenses which started high and now run at 0.21%, trading costs, withholding taxes, rebalancing including buy\/sell spreads, new purchases and a lot of learning (also called mistakes).\u00a0 It\u2019s largely based around Modern Portfolio Theory where I started with the methodology described by <a href=\"https:\/\/amzn.to\/2Ei5VuR\">Tim Hale in Smarter Investing<\/a>.\u00a0 It\u2019s included my initial don\u2019t know what I\u2019m doing phase, my <a href=\"http:\/\/www.retirementinvestingtoday.com\/2009\/12\/building-my-low-charge-investment.html\">I have a strategy and am repositioning myself phase<\/a>, my <a href=\"http:\/\/www.retirementinvestingtoday.com\/2012\/09\/the-retirement-investing-today-low.html\">tinkering around the edges phase<\/a>, gradual repositioning (heavier weighting to the likely retirement region\/country) to suit the desired retirement location as well as building\/maintaining low risk cash\/NS&amp;I reserves to support an eventual retirement home purchase.\u00a0 If I chart all of that the portfolio has changed like this over the years:<\/p>\n<div class=\"separator\" style=\"clear: both; text-align: center;\">\n<a href=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgkHZk1y4s7dw8IdquqOU_LF5c4nEuJmsUbQSKKM7Ot0n8U9yx2E2AHResIqwnjoU3vGrv0-22h-4hcGCN9pksn-gzl_-3SqdIIa13YBS_AgBU453ctaC7ukVIMfriRgtTxDlX_-wUSddTD\/s1600\/191214-1.png\" imageanchor=\"1\" style=\"margin-left: 1em; margin-right: 1em;\"><img loading=\"lazy\" decoding=\"async\" alt=\"RIT Asset Allocation by Year\" border=\"0\" data-original-height=\"492\" data-original-width=\"762\" height=\"257\" src=\"https:\/\/blogger.googleusercontent.com\/img\/b\/R29vZ2xl\/AVvXsEgkHZk1y4s7dw8IdquqOU_LF5c4nEuJmsUbQSKKM7Ot0n8U9yx2E2AHResIqwnjoU3vGrv0-22h-4hcGCN9pksn-gzl_-3SqdIIa13YBS_AgBU453ctaC7ukVIMfriRgtTxDlX_-wUSddTD\/s400\/191214-1.png\" title=\"RIT Asset Allocation by Year\" width=\"400\"\/><\/a><\/div>\n<p>\n<i>Click to enlarge, RIT Asset Allocation by Year<\/i><\/p>\n<p>If you squint at that chart it looks not unlike a 60% Equities : 40% Bonds asset allocation for the vast majority of the journey.<\/p>\n<p>So then the million dollar question, actually it\u2019s the million pound question as I\u2019m a UK based investor, is what\u2019s my real life portfolio return actually been?\u00a0 Drum roll please&#8230;\u00a0 The answer is a nominal portfolio return of 6.4%.\u00a0 During that period inflation has been 2.7%, as measured by the RPI, leaving me with a real portfolio return of 3.7%.\u00a0 That is a long long way from 7%!<\/p>\n<p>So the next question becomes am I an average, poor or good investor?\u00a0 Over to you&#8230;<\/p>\n<\/div>\n<\/div>\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"<p>I was recently reading a FIRE blog post, from a couple who are still very much deep in the swim phase of the FIRE triathlon, where the post was exploring who in society has the opportunity to FIRE if they so choose.\u00a0 Of course as many of us FIRE bloggers love a good spreadsheet, the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":135918,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[96],"tags":[10906,3333,9162,482,11077,10970,1513],"dealstore":[],"offerexpiration":[],"class_list":["post-135917","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-investing","tag-investing","tag-life","tag-portfolio","tag-real","tag-retirement","tag-returns","tag-today"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.4 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Retirement Investing Today: Real life portfolio returns - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, 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