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-roofed house back 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 for the old days, wanted to return to her roots, and a few years ago, she moved in 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 the unfinished unit was 752,000 yuan. Since it was a necessity for my elderly mother, I didn’t dwell too much on the future market trends at the time of purchase. Afterward, I realized that two years after buying, the property price had 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 still 20 years remaining until full repayment. Currently, apart from a March 2026 payment of 2,829.54 yuan, I owe the bank 406,261.42 yuan in principal. I initially chose a 22-year term to reduce monthly payments and, at the beginning of 2024, when 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, and liquor 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 won’t be smooth sailing. Now, 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, my salary and pension will be fully used for living, travel, and improving my quality of life, without excessive frugality.

To balance quality of life and mortgage repayment, my investment has yet to meet expectations. So where does the monthly mortgage payment come from? Inspired by the investment portfolio in @ThreeLayerPavilion’s “Centenarian Personal Annuity,” which withdraws 5,000 yuan monthly for pension, I thought: why not adopt this approach? I could set up a dedicated account, build an investment portfolio, and withdraw 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 principal might even grow.

With this idea in mind, I revisited “Harry Browne’s Permanent Portfolio,” and used AI to compare various strategies like balanced stock-bond, all-weather, 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; for gold, the ETF with the largest scale and daily trading volume; for cash, short-term bond ETFs; for stocks, following Harry Browne’s advice, I considered ETFs covering the entire market, but since the S&P 500 ETF’s yield seemed low, I replaced it with ETFs I follow long-term—namely, the Free Cash Flow ETF and the CSI All Share Dividend Quality ETF. Combining the recommendation of international assets comprising 5%-10% of the portfolio, the S&P 500 ETF became my top 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, adjusting for management fees and tracking error: 159232 and 159209 deduct 0.5% annual fee, and 159655 deduct 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%.

So I refined the portfolio to a 0% cash allocation: 40% stocks (16% each for 159232 and 159209, 8% for 159655), 40% bonds, and 20% gold; no annual rebalancing, but rebalancing triggered 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 trading, I transferred the principal of 406,261.42 yuan owed on the mortgage into a zero-commission securities account and bought assets according to the portfolio proportions. Since the unit price of 511090 (30-year government bond ETF) exceeded 100 yuan, making precise allocation difficult, I used less than 10,000 yuan to buy 511220 (Shanghai Urban 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 (Urban 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 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; during the day, the account increased by 0.09%, with total assets at the close of February 2026 reaching 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 is dedicated solely to mortgage repayment, with no further asset additions, only withdrawals as needed.

Today, I record my mortgage repayment journey inspired by JiSiLu. Each month, after selling assets and withdrawing funds for repayment, I will update the account status. If asset fluctuations trigger rebalancing at the ±14% deviation threshold, I will update again, sharing this process with fellow JiSiLu members.