How do you allocate your assets?
Most conventional financial planning methods stop at growing assets to a certain size but stop short of how to ensure your assets generate consistent income as you age yet has growth.
The Problem
The Solution
Therefore, I have built this Portfolio Asset Allocation Dashboard for you to simulate your annual withdrawal targets (think of this as your annual salary) vs the % of how much you need to allocate into a fixed income instrument vs an equities/stock portfolio.
Determine how much you want to withdraw every year under the "Annual Withdrawal Target (RM)?". For example if you think RM10,000 a month is the cash flow you need, then enter RM120,000 into the annual withdrawal target.
Enter what the current value of your total portfolio, and exclude fixed assets like property, especially those that don't generate income at the moment. If it were to be included, taking into account financing and other cost, this would be an even more complicated calculator, and yes I know because I've built one on Excel before if you want it to be accurate about properties.
Determine what's the annual yield rate of your fixed income instruments (e.g. your Fixed Deposit will be yielding on average between 2.5 - 3.5% depending on your banking status, or your EPF will be yielding an average about ~5% over the past few years)
Determine the growth rate of your equity or stocks portfolio, for example if it's in unit trust, on average it has returned anywhere between 5-10% per annum.
Adjust the slide rule in your Fixed Income Allocation box to determine your if the withdrawal targets are met. Iterate where necessary.