Invest for what you keep
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Choose · what to own

Two decisions set what $100,000 becomes: the allocation, then what runs inside its stock sleeve

The allocation: a book of stocks, Treasuries and gold that fits the purpose of the money, with the house counted at a fifth of its value. The overlay: what the stock sleeve holds beyond the index. Every figure is before tax; Implement shows what is kept.

Before taxSimulated, not heldTwo starts, 2006 and 2010

  1. Asset allocation $694,000from $100,000, 2006 to 2026 Hold stocks, Treasuries and gold in the book that fits the purpose of the money, and count the house What $100,000 became since 2006 Grow wealth $804,000 Balanced FI $694,000 Legacy $644,000 60/40 $523,000 Balanced financial independence, 50 / 20 / 30, rebalanced once a year, against $523,000 in a plain 60/40. Each of the three books returned more per unit of risk than 60/40 from a 2006 start and from a 2010 start, and lost 13% to 14% in 2022 against 17%. A house adds a fifth of its value to the stock count. The choice, argued: Asset allocation, 7 reads
  2. Alpha overlay 22lead changes Own the index as the base; tilt only with both sides of the pair held Worst fall behind the market Value alone −54% Growth alone −39% 50/50 blend −19% Growth and value have swapped the lead 22 times since 1972, the longest run 13 years. The 50/50 blend never fell more than 19% behind the market. The choice, argued: Alpha overlay, 1 read
What stays out Long Treasuries and listed real estate 2.8% and 6.1% a year since 2006 for stock-sized swings; neither improved a 60/40 from either start. A household with a house already owns property. Decision 03 · Diversifiers Five percent in a true diversifier cuts the worst fall A 60/40 with 5% in trend following, 1985 to 2025: a shallower worst drawdown and +0.34 points a year. An equity flavor at 5% deepens the fall.

What to own is decided here. Which account holds each piece is decided under Account placement, in Implement · how to hold it. The sample household's numbers are illustrations; a reader replaces them with their own on the allocation page.

Funds are named as examples of a mechanism, not as recommendations.