Portfolio Balancing: High-Yield Bonds, Cash and Inflation

 With financial independence now roughly 15 years away, I have started shifting my portfolio towards a 60/40 allocation: 60% in equity index funds and 40% in bond index funds.

Cash vs high-yield bond funds. There is currently an interesting alternative to bond funds in the UK: fixed-term savings accounts with guaranteed interest rates approaching 5%. There are products sometimes referred to as “treasury deposits”, with no account charges or management fees.

I therefore decided to compare four bond funds in which I have invested with fixed-term savings accounts. One important consideration is that both investments can be hedged into different currencies.

 I selected following bond index funds:

Financial independence in sight – path to a 4 million nest egg

 Five months after landing new job I have finally start coming to my senses after nightmare I have been in the last job with Iranian boss for the past three years. The change has been transformative—not only for daily well-being but also for the practical steps toward financial independence.

 I have now started investing my severance package into bonds.  This is part of achieving 60/40 allocation (stocks /bonds), as I am currently ten years out achieving my financial independence.

 This has following assumptions:

•         Expected real (ex-inflation) return on stocks: 3% per year
•  Expected real return on bonds: 1% per year
•  Annual savings capacity: Approximately $52,000 USD per year through a combination of company pension contributions and personal savings, while covering living expenses from current income.

By next year the portfolio is expected to sit near a 73/27 stocks-to-bonds allocation. If the new role remains stable and markets perform roughly in line with the assumptions above, the equity weighting should gradually decline toward approximately 83/17 over time as the bond allocation grows and additional contributions are made. This trajectory is designed to reach a $4 million nest egg (in 2026 dollars).

The $40 Trillion Shadow: Why Debt Cancellation Is Not a Free Lunch for Those Building Wealth

 A recent New York Post piece floated an old idea with a modern twist: cancelling the U.S. national debt, framing it as “An Ancient Sumerian Solution to Our $40 Trillion Debt.” The argument treats debt as a purely human-made accounting system that can simply be reset. While money is indeed a social construct, claims on real resources are not. Canceling $40 trillion in public debt would not make those resources disappear—it would redistribute who owns them.

Imagine the impact on pension funds, individual retirement accounts, insurance companies, and households that hold government bonds. The losses would also hit currency holders through higher inflation. This is one reason gold has been trading near $4,400–$4,700 per troy ounce (31.1 grams) in recent months—investors are seeking an inflation hedge and a store of value outside the traditional system.

The real question is not “Can we cancel the debt?” Of course, a government can attempt it. The better question for anyone focused on financial independence is: “Who gets robbed when we do?”  Historical Precedents Offer Caution, Not Comfort.

 History provides a few instructive examples:

August 2026 update ($1,487,764 +$41,551 or +2.9%)

↑ Emerging Markets Stock Index Fund is up by $5,534 or +2.4%
↑ Eurozone Stock Index Fund is up by $2,406 or +0.9% 
↑ Standard and Poor’s 500 Index Fund is up by $15,276 or +2.7% 
↑ Global Small Cap is up by $6,604 or +2.9%
↑ Growth fund is up by $4,930 or +4.3%
↑ Additional investment savings $2,500
↑ EUR to USD is up by 0.9% or for my portfolio $4,302
Total gains: $41,551