Certainly some good advice and ideas from all.
Quite a few years ago my Father passed away unexpectedly from a heart attack however, being the organised person he was, he left a detailed document for me to follow in order to assist my Mother in settling his estate and reorganising my Mums affairs.
He had a WILL but this document was more about information and instructions on all the things I needed to know like credit cards, accounts names that needed changing, direct debts that were established, cancelling or changing club and organisation memberships like RSL and BUPA to name a few.
It was about 5 or 6 pages in size.
My Mother never involved herself in their finances so it fell to me and my sister. It would have been far more difficult with out his instruction.
Soon after his death my Sister and I arranged for my Mum to write a new WILL and EPoA. It proved to be a very wise move as my Mother developed Alzheimers Disease in her later years and we were able to help her because she had appointed us with powers of attorney both healthwise and financial.
In recent years I have prepared a similar but more detailed document for my wife and daughters to follow in the event I may meet a similar fate as my Father or Mother.
Our financial affairs are considerably more complicated than my parents were so my family knows there is a document and where it is stored that they can refer to if necessary.
I religiously update it as things change. eg: If I close an account or make a new investment.
I have included information on what we own, ie: bank accounts, managed funds, super accounts, share holdings and more. Links to businesses and organisations we deal with, account numbers and how they are paid ie: power, gas, rates etc by DD or CC.
I know it will help them during a difficult time as did my Father's document.
On a different but related subject, my wife and I have recently rewritten our WILLS to include Testimentary Trusts to ensure our assets are protected for the benefit of our Daughters and our Grand Children.
I won't go into any further detail except to say our Sons in Law are fine young men and we couldn't be happier with them but in the event that one or both our Daughters should die or remarry after we die I wanted to make sure that their inheritance is protected by a Trust for the benefit of our Grand and not a Step Mother or Step Father.
There are all sorts of things that could eventuate that might lead to your Grandchildren not benefiting from your hard work and unfortunately I have seen this happen so if this sends off any alarm bells I suggest you talk to your Solicitor about this.
My wife and I have fully discussed this with our Daughters and our Sons in Law and we are all very comfortable knowing there is a mechanism to protect our inheritance for the benefit of our family.
Finally I have to say that without WILLS, EPoAs, Testament Trusts and documentation, one's family can suffer unnecessary because of one's lethargy and that's not a legacy I wanted to leave my family with.
Here's my two bob's worth. The answer is of course, it depends.
I agree with @DrPete, that the family home is excluded from your portfolio. Sure, it's included as part of your overall wealth, but not for portfolio/asset allocation purposes.
For asset allocation calculations, yes, I would include super, managed funds, shares, investable cash - but strip out "cash reserves" which you need for emergencies. The amount of cash reserves depends on your situation eg if you're on a salary (and employment seems secure), you might allocate 3- 6 months of your annual income to cash reserves, whereas if you're retired, you might want to allocate 1 - 3 years of your annual income to cash reserves. It depends on your desired "margin of safety" but whatever the amount of cash reserves are for you, they must be liquid funds eg cash management account and for me, they are excluded from my investable portfolio.
While you might not be managing all of your funds (eg you have an industry fund super account), I would include it in your overall asset allocation so you can assess whether your portfolio is aligned with your "risk profile"....and your partner's risk profile for that matter.
If you have an investment property, there are different views on whether it should or shouldn't be included. It's a personal choice but for what it's worth, when I was advising a client, my preference was to exclude investment property because the weight of the asset value (for most people) rendered the asset allocation to be somewhat useless ie if you had a $750K investment property and $250K in super, the asset allocation isn't going to tell you anything you don't know.
For me, as along as the share portfolio I manage, along with the share component of my super fund fit within the bounds of my target asset allocation, I'm happy. The only thing I'm measuring is how the portfolio performs over time, against the market.....I'm failing at the moment unfortunately.
While the question of what's a portfolio is a good one, I wouldn't over think it. Do the things that make a big difference first and then worry about the smaller issues. Here's a few things I would say are much more important than whether you have 4 months or 5 months of cash reserves.
Do you and your partner have a valid Will that still reflects your wishes? Does your family know where the Will is located?
Do you have an Enduring Power of Attorney? If you do, does your family know where it is? If you don't have an Enduring Power of Attorney, talk to your solicitor about the merits of having one.
Do you know with certainty, who will receive your super if you fall off the perch? If your response is, "I think....", then you don't know. Check with your super fund.
Do you have Enduring Guardianship? My Best Man had a massive stroke on Friday and nobody knows what his medical wishes are, and it's causing enormous stress for his family....I can assure you, they're not talking about what assets should be considered to be part of a portfolio.
And finally, apart from you, does your partner/children know exactly what you own and where to find the details? In my experience, when I met with couples, the man would tell me about their investment portfolio. I'd then turn to their partner and ask "if I asked you to go home now and locate the necessary information about these investments, could you"? The answer from their partner was almost always, no, they had no idea how to find the information.
Make sure you've addressed the important issues, before the nice to know issues.
Great responses @Solvetheriddle @DrPete @Bear77 @Remorhaz . I've had a spreadsheet for years that I update regularly which covers my direct share investments and which I originally considered my portfolio. I also had a spreadsheet tracking managed funds but they were kinda separate in my thinking. i.e. money I managed and money others managed on my behalf. And super was super, a great tax effective investment but way too far in the future for me to actively consider it as part of my portfolio. But now that I'm a bit older (although at the end of mid-forties, I suspect I'm still a spring chicken in some eyes!) and I'm dealing with my parents estates, it got me properly thinking about allocation and what really is a portfolio. I agree, the family home is not considered for the reasons outlined by @DrPete , and I don't really consider the small consulting business I'm involved with as an asset because there's no guarantee I could sell it when I retire. If I do, that's a bonus. But in terms of portfolio in regards to weightings, I'm leaning towards including everything towards which I could actively allocate capital, which includes my super as well as my wifes.
Great to get others thoughts. And @Solvetheriddle I agree that a % is next to useless if the definition of what it is a percentage of remains unknown.
When you consider individual stock weightings in your portfolio, what do you consider to be your portfolio? Is it directly held shares? All your liquid assets like managed funds and shares? What about more illiquid assets like investment property, or the family home? Do you consider Super to be part of it as well, perhaps your partners super if you are the chief financial strategist for the family? Just interested in gauging peoples opinion on the difference between a portfolio and overall personal wealth and what assets get put in each bucket? Obviously this makes a huge difference when you talk about a 1% allocation to a promising yet highly volatile micro cap.