Build a permanent investment portfolio and easily pay off your mortgage

I am a person born in the early 1970s, originally from Sichuan, currently working in Jiangsu. Over twenty years ago, my mother came to Jiangsu to help take care of my children. The stone and cement flat-roof house in my hometown has since been left unused; although it hasn’t collapsed, it is no longer livable. My younger brother and sister have been working in Chongqing for a long time, and in recent years, they also took out loans to buy property and settle down locally. My mother, nostalgic, wanted to return to her roots, and a few years ago, she moved to live with my brother and sister in Chongqing.

Considering her hard life, I wanted to buy her a separate, stable residence. So in January 2024, near my brother and sister’s home, I took out a loan of 450,000 yuan to purchase a two-bedroom apartment (the commercial loan interest rate was just over 3%). The total price for a shell unit was 752,000 yuan. Since it was a necessity for my mother’s housing, I didn’t overthink the future market trends at the time. After purchasing, I found that in the two years since, property prices have fallen nearly 20%.

I chose the equal principal repayment method for the mortgage, with a term of 22 years, to be paid off by February 2046. As of now, there are exactly 20 years remaining until repayment. Currently, aside from the March 2026 payment of 2,829.54 yuan, I still owe the bank principal of 406,261.42 yuan. I initially chose a 22-year term to reduce monthly payments, and at the beginning of 2024, the stock market was at a low point. I hoped that a bull market would come, allowing me to pay off the mortgage in one lump sum through investment gains, avoiding future worries.

After the stock market declined for three years from 2021 to 2023, the bull market arrived as expected in 2024 and 2025, with the Shanghai Composite Index returning above 4,100 points. However, I heavily invested in Tencent, consumer dividends, liquor, and other stocks, and I have yet to catch this wave. My own bull market has been delayed. Many influential investors are not optimistic about the 2026 stock market, but they also believe that the subsequent rise will not be smooth sailing. I no longer expect to pay off my mortgage in one step through a bull market, but I feel uneasy about making monthly payments from my salary.

As a person born in the 1970s who has endured hardships, my current home and some savings are all accumulated through frugal living over the years. Time flies, and retirement is not far off. My wife and I have never even taken a long-distance trip, let alone traveled abroad. Life is short—must I continue living austerely just to pay off the mortgage, squeezing money from my salary every month? Of course not. I want to make a change—going forward, I will use my salary and pension for daily life, travel more, and not be overly frugal, but instead improve my quality of life.

To balance quality of life and mortgage repayment, my investments have not yet met expectations. So where will the monthly mortgage payments come from? Inspired by the investment portfolio in @ThreeLayerPavilion’s “Centenarian Personal Annuity” which withdraws 5,000 yuan monthly, I thought, why not set up a dedicated account, build a personal investment portfolio, and withdraw funds from it monthly to repay the mortgage? This way, mortgage payments won’t eat into my salary, and after 20 years, when the mortgage is paid off, the account’s principal might even appreciate.

With this idea in mind, I revisited “Harry Browne’s Permanent Portfolio” and used AI to compare various strategies like balanced stock and bond portfolios, all-weather portfolios, and permanent portfolios. I concluded that the permanent portfolio is simple and easy to implement, so I began selecting assets: for long-term bonds, I chose the 30-year government bond ETF, which has sufficient size and liquidity; for gold, I selected the ETF with the largest scale and daily trading volume; for cash, I chose short-term bond ETFs; for stocks, following Harry Browne’s advice, I considered ETFs covering the entire market, but since the A500 ETF’s returns seemed low, I replaced it with the free cash flow ETF and the CSI All Share Dividend Quality ETF I follow long-term. Combining the recommendation that international assets should account for 5-10%, the S&P 500 ETF became the best choice. The initial selected assets are:

• Long-term bonds: 511090
• Gold: 518880
• Cash: 511360
• Stocks: 159232 (CSI Free Cash Flow ETF), 159209 (CSI Dividend Quality ETF), 159655 (S&P 500 ETF).

Among these, only 518880 (Gold ETF), established in July 2013, covers the full market cycle; the others are relatively new and cannot be backtested directly. Therefore, I manually compiled weekly closing data from 2014 to 2025 for the CSI All Share Free Cash Flow Index (932365), CSI All Share Dividend Quality Index (932315), and the S&P 500 index. For 518880, I used its weekly net value for backtesting (159232 and 159209 deducting 0.5% annual management fee and tracking error, 159655 deducting 1.5%). The results show that the classic permanent portfolio (25% stocks, 25% bonds, 25% gold, 25% cash), whether rebalanced annually or with threshold deviations, yields an annualized return below 10%.

I then improved the portfolio, settling on a 0% cash allocation: 40% stocks (16% 159232, 16% 159209, 8% 159655), 40% bonds, and 20% gold; rebalancing only when deviations exceed ±14%. Backtesting indicates this modified portfolio can achieve an annualized return of about 12%, with positive returns every year from 2014 to 2025, including 2018 and 2022, with gains of 0.95% and 0.51%, respectively.

On February 27, 2026, during market hours, I transferred the principal of 406,261.42 yuan needed for mortgage repayment into a no-commission securities account and used the portfolio proportions to buy assets. Since the price of 511090 (30-year government bond ETF) exceeded 100 yuan, making precise 40% allocation difficult, I used less than 10,000 yuan to buy 511220 (Shanghai Investment Bond ETF) as a substitute to complete the allocation.

As of the close on February 27, 2026, the holdings and proportions are:

• Bonds: 511090 (30-year government bond ETF) 1,400 shares, 39.58%; 511220 (Shanghai Investment Bond ETF) 100 shares, 0.25%; total bond allocation: 39.83%
• Gold: 518880 (Gold ETF) 7,400 shares, 19.9%
• Stocks: 159232 (CSI Free Cash Flow ETF) 47,000 shares, 16.04%; 159209 (CSI Dividend Quality ETF) 50,700 shares, 15.98%; 159655 (S&P 500 ETF) 18,300 shares, 8.02%; total stock allocation: 40.04%
• Cash: 924.04 yuan

Initial cost: 406,261.42 yuan. The market rose slightly during the day, ending with a total asset value of 406,642.14 yuan.

Future plan: each month, sell assets with the largest upward deviation among stocks, bonds, and gold, along with the cash balance, to cover the next month’s mortgage payment. This account will be dedicated solely to mortgage repayment, with no further asset additions, only withdrawals as needed.

Today, I record my mortgage repayment journey here inspired by JiSiLu. Each month, after selling assets and withdrawing funds, I will update the account status; if there are significant asset fluctuations reaching the ±14% deviation threshold, triggering rebalancing, I will update again, sharing this process with fellow enthusiasts.