I'm 39(m) years young starting a new job in a few months paying £300-360k TC depending on bonus + RSUs of approx £100k a year (bit of a guess on latter from discussions during hiring, first year should be more to make up for non vested RSUs in previous job). Current job is maybe 20% less TC but less relevant.
Current investments (£k):
ISA 270
GIA 190
Vested RSUs (which I'll likely sell and diversify once I leave current job) 130
Pension 354
House value c770 with mortgage of 380
So my NW is approx £1.3m
This is all equity investments except for £115k of bonds in the GIA account - duration of around 3 years so fairly short. All basically VWRP in the equity pots except the vested RSUs which are in an insurance company.
My question is how people think about their asset allocation in different buckets given uncertainty and I would like a sanity check.
Myself and fiancee are currently in a 3 bedroom maisonette flat that is fine for now but isn't our 'forever home' but there's a lot of uncertainty in when we might move to a bigger place, have kids, possibly move back to my home country etc depending on careers, parents health etc. My fiancee is 33 and has made a career change a couple of years ago into a much more lucrative career but she's building that at the moment.
My base case is that we will move in 3 years and want to upsize and have kids but give ourselves the next few years to try to make as much money while we're still young (ish) and she can establish her career.
So I'm essentially keeping £115k that we would add to the house equity we'd get back when we sell the current place to have a deposit of £400-500k or so to get our family home in a few years time and I'd keep all the rest invested in equities.
Questions:
When people talk about their asset allocations (which are often 100% equities) is that just iro the money they've set aside for retirement? Do they tend to keep money they need sooner in short term bonds and just not mention them - for example moving house in a few years, kids school fees etc.
Would you keep more aside in bonds for emergencies and future costs - e.g. if we wanted to put more into a house; send our kids to private school etc.
Do you think of your salary as a fixed income bond so you don't worry too much about the timing risk of the expenses that come up in life (house, kids etc)
Just writing this has actually been pretty helpful for me and think we're on the right path. I'm quite risk averse but myself and fiancee are both on pretty lucrative career paths so maybe don't need to worry too much and just try to manage spending and save as much as possible for next few years. Guess my worry is there's a big market crash and I don't have enough bonds set aside!
Cheers for anyone who reads my ramble...