Annual rebalancing Excel calculator

Over on the excellent Monevator site the following question was posed by Gregory today:

“You are an early retiree and have a portfolio of £875,000. You don’t follow the 5/25 rule but withdraw Your inflation adjusted money and rebalance Your portfolio once a year for example on Your birthday.  On Your birthday You want to withdraw £27200.  The current (£;%) and target asset allocations:
- UK equities: £70000; 8% vs. 6% target
- Developed world ex-UK equities: £350000; 40% vs. 38% target
- Global small cap equities: £70000; 8% vs. 7% target
- Emerging market equities: £96250 ; 11% vs. 10% target
- Global property: £35000; 4% vs. 7% target
- UK gilts: £192500 22% vs. 26% target
- UK index-linked gilts: £61250 7% vs. 6% target
How would You withdraw and rebalance?”

I suggested that firstly Gregory hadn’t really given us enough information:

• You say you don’t want to use the 5/25 Rule but don’t detail what rule you are using. Surely you’re not going to rebalance every fund no matter how far from nominal you are as that would incur trading costs that might not be economically sensible. I’m going to assume you’ll rebalance if an asset class deviates more than £4,000 which means in this instance you’re going to be buying/selling every asset class this time around.
• You don’t say if your assets are held in Inc or Acc products. Given you have no cash anywhere I’ll assume Acc. Inc would have made this easier during both the accrual and drawdown phases IMHO but let’s move on.

Making a difference

As each week of Financial Independence (FI) passes, particularly the last few weeks, I can feel quite a bit of change occurring within myself.  The stresses of work just seem to continue to melt away and excitingly that energy is then able to be channelled elsewhere.  One area that I’ve been thinking about is what’s important to me spiritually and how I define myself.  Interestingly, what keeps coming to mind is that in life I’d really like to make a difference to the world.  That might be a little arrogant but do bear with me...

With this in mind I’ve then been asking myself have I already made a difference and the answer I came up with is a resounding yes.  I’ve definitely made a big difference to my family but let me stay away from that to protect the innocent and talk about a few other examples.

During my work life and particularly in more recent years I have made a lot of money for the companies I’ve worked for which has then been distributed to a lot of people – both private and public owners.  That however means absolutely nothing to me as they are just rentiers living off my back.  Something I’ll be doing in FIRE so some hypocrisy here but let’s keep going.  What does mean something to me is that to make all that money I’ve had to rebuild, grow and develop teams into very high performing teams.  They are now efficient and very competent which has secured their foreseeable future in a very competitive industry not frightened to send jobs to low cost countries.  One of the reasons I started on my FIRE plan in the first place.  This means I’ve then helped secure a little bit of their families financial future.  That’s hundreds of families I’ve made a difference to and that is motivating for me.

Cyprus healthcare is changing for the better

I’ve written previously that one of the reasons I’ve decided to do one more year is because we’d like to let the dust settle a little more on Brexit and in particular how reciprocal healthcare, via say the S1, will be handled in our dotage.  In recent weeks some good news seems to be coming out of Cyprus, independent of any Brexit nonsense, that might just mean Brexit negotiations will become unimportant.  Let me explain.

For our situation there seem to be 2 ways to get into the Cyprus public healthcare system.  The first is to pay Cyprus Social insurance for a minimum of 3 years and then meet a number of other criteria.  Unfortunately, unlike countries like Malta and Spain, it doesn’t seem possible to pay these voluntarily.  You have to be either working or self employed.  This is out as I want work to be 100% optional when we move.  That’s always been my definition of Early Retirement.  The second is to reach State Pension age and apply for an S1.  This is what I’m concerned about losing as part of Brexit.

So that leaves us with the Cyprus private healthcare system.  Getting basic care seems affordable and efficient.  I was able to walk into a private clinic in Cyprus where there was absolutely no queue and have a prescription renewed for EUR10.00.  I then went to the pharmacy where said prescription cost me EUR3.47.  A visit to a GP seems to be around EUR30.00 and treatment almost seems immediate.  In contrast in my neck of the woods here in the UK I could literally die while just trying to make an appointment to see a GP let alone waiting to see one.

So far so good.  The problem for me is if it’s something more serious.  For that we’re going to want Cyprus private health insurance.  From contacts in a few of the forums I frequent we’ve been able to remotely apply to a company who apparently pay up efficiently when you’ve sought treatment.  Good news is that they’ll cover us but it comes with one exception for a pre-existing condition.  This is the problem for us.  It’s not this pre-existing condition as it’s manageable but as we age what if we pick up a few more and then at some point the insurance company says you’re now too high risk.  They then can either stop insuring or push premiums up so far that it forces us to go elsewhere.  Then where do we go particularly given all the companies I’ve found so far won’t cover you at all above a certain age unless you’re already with them.  Even if we could find someone they then won’t cover you for the reasons the first company didn’t like you which sort of defeats the purpose of having insurance in the first place.  What then?