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The New Model Asset Portfolio
​"New M.A.P."

The New M.A.P. is designed to make it easier for the student to understand the interactions of their money and how a true asset allocation portfolio can set better expectations for their retirement. 

 

With better expectations, comes greater staying power. This helps manage investor behavior in simple conceptual discussions that they can follow and act on. 

How does Blue Money Work?

Blue Money is for your every day living expenses.  This is the in and out flows of cash, as well as, the emergency funds and any larger expenses you have planned in the next 1-3 years that you shouldn't be taking any risk on, or tying up.   

 

You should have 6 to 12 months of non-guaranteed income in reserve here.   

 

Blue Money does not lose money due to Market decreases. And, it is liquid!

How Does Green Money Work?

Green Money also doesn't lose money due to market decreases. It is capable of out pacing inflation, but it provides protection to that piece of your retirement that you cannot afford to lose. 

 

Green Money helps to minimize the risk of pulling out of Red Money in bad market situations, and helps increase your stabilized income to minimize withdrawal strain on your Red Money!

 

Green Money must follow 3 rules: 

  • Protect Principal
  • Retain Gains
  • Provide income for life

Without those three rules, it is not Green Money.

How Does Red Money Work?

Red Money (Risk Money) is for long term greater growth, allowing you to outpace inflation further. You will take on short term greater risk of loss. 

            

Risks that are important to protect against during the distribution phase of retirement are: 

  • Longevity
  • Sequence of Returns
  • Investor Behavior

The longer your retirement, the more these risks impact your retirement. A solid plan to navigate is crucial to your success. 

There should never be less than 25% of your entire portfolio in Red Money - specifically equities to provide the best chances of surviving retirement!