So with all these money multiplication strategies, where should you put your hard earned savings? How should you allocate your funds to generate maximum gains yet minimize your risks?
I am sure you have heard of the term 'don't put all your eggs in one basket.' Even though you are going to learn how to achieve minimum risk & maximum returns in each basket, it is still wise to allocate your funds into different instruments with different targeted holding periods. In times of emergency when you need the cash, you can be sure that all your funds are not stuck in one place.
Now, here is an important disclaimer. In most financial textbooks, they advise diversifying your funds into many different investment vehicles like bonds, stocks, mutual funds, money markets instruments as well as spreading your money across numerous different sectors and different countries to diversify your risks. To an average investor who has low financial competence and needs the wide diversification to lower risk, this makes sense. However, while this kind of broad diversification guarantees low risk, it also guarantees low returns of 5%-8%.
I personally do not follow this strategy. Warren Buffett advises that 'broad diversification is used by people to protect themselves against their own ignorance.' If you know what you are doing (high financial intelligence), you should concentrate your portfolio into equities (stocks & mutual funds) as they achieve the highest return. And you can achieve low risk not by simply spreading your money around, but by your competence of knowing which funds and stocks to pick.
So, the strategy I am going to share with you would be deemed highly risky by the general financial advisors and bankers. Again, it's because most investors lack the competence to do otherwise. However, with the strategies and knowledge you are gaining in this book, you will prove to yourself that it is actually low risk, high return strategy.
Knowing how to allocate the money you save is the single most important decision that will lead to your financial goals. You should take your monthly savings of 15-20% and allocate it to four money baskets. These are the security basket, growth basket, high growth basket and the luxury basket. Let me explain each of these.
1. Security Basket (Target Return of 1.5%-4.5%pa)
This first basket is as the name implies, for your security. The funds in this basket grow just enough to keep pace with inflation. However, they are there in case of emergencies. If you suddenly lose your job, experience a salary cut or suffer a setback in your business, you know that you will have access to these funds anytime to see you through.
This basket should include cash, fixed deposits/certificates of deposits, personal housing, insurance & capital guaranteed funds.
2. Growth Basket 1 (Target Return of 8.51%-20%pa)
This is the basket where you build your net worth & positive cash flow assets that will lead you to financial freedom. This basket is where you put your money into index funds, Exchange Traded Funds (ETFs) and mutual funds. You should also divide your funds between the US market and Asian markets. Although mentioned earlier that Asian equities have disadvantages, we cannot deny the huge growth opportunities that Asia offers (especially India and China).
3. Growth Basket 2 (15%-25%)
This is the basket where you ACCELERATE the building of your net worth & positive cash flow assets that will lead you to financial freedom. Once again, you should not have to touch this money for five to ten years to let the power of compounding work its magic.
This basket is where you put your money into a winning portfolio of ten to twelve company stocks. And again, you should hold some Asian stocks as well as US stocks.
4. Luxury Basket (0%)
Your luxury basket is where you save up to indulge in your dream assets. This is money that you can afford to spend on things that are fun like:
Upgrading to a dream house, luxury cars, jewelry, boats and other luxuries. Again remember from the chapter on 'How the rich manage their cash flow' that the money to be used for luxuries should not come from your primary source of income, but from the passive income generated from your positive cash flow assets.
Useful Information And Advice College Financing Programs Recommend For You
College education is one necessity in life anyone desires to have. It is for sure that the higher you get with college education the better the job you will get in future. This also means a higher pay and a more comfy. But nothing good comes easily!
College Education is becoming so expensive and many are on the look out for extra finances just to meet this need. Did you know that this can easily be solved by getting enough information and advice on College Financing Programs? Well let me just make it clear for you. College Financing Programs gives you, as a college student, clear and detailed information on financing your college education. Do not go blindly into any kind of college financing without a clear mind on what it entails. This information is available for you and there are so many government and private college financial institutions offering the information.
You need a good plan for this so that even before going to the college of your choice you will smartly decide who should be your college financier basing on the requirements of that college. Your school adviser this time round is a key person you should consider talking to about college financing. He should explain in details on how college financing will help you go through the college life and just how it can affect you and your family while in college and after you are done with it.
Just like always, you will find so many documents to read and agree with, sign and apply. All this may lead to so much confusion in your mind. But many institutions offering college financing are a bit organized and just by following their guidelines, you will get there, believe me! For instance, the federal government has good quality online information with many defined links connecting to the ideal application forms that you submit to college financing institutions. In the college financing guide you will also learn of the available student loan programs, estimate the cost for college education; get info about the effects of defaulted loans and even funding alternatives.
Once you have made up your mind that you need a college financier the links to these college financing institutions will help you find the best and a step by step approved application process that will leave you smiling for achieving something.
And Just before I forget! let me give you my last word, that undeniably, university and college education is proving quite expensive these days, and for sure we all want to go through this education just to achieve more for the sake of our future and the generations to come. We are left with no choice but to comply with this changing and devastating stipulation. Well what do we do? Let us get positive and learn more about how we can finance this education however expensive it could get. So get this college financing information yourself so that when you go to look for the financiers you will have a concrete idea on what you expect and a better choice of college too.
College Education is becoming so expensive and many are on the look out for extra finances just to meet this need. Did you know that this can easily be solved by getting enough information and advice on College Financing Programs? Well let me just make it clear for you. College Financing Programs gives you, as a college student, clear and detailed information on financing your college education. Do not go blindly into any kind of college financing without a clear mind on what it entails. This information is available for you and there are so many government and private college financial institutions offering the information.
You need a good plan for this so that even before going to the college of your choice you will smartly decide who should be your college financier basing on the requirements of that college. Your school adviser this time round is a key person you should consider talking to about college financing. He should explain in details on how college financing will help you go through the college life and just how it can affect you and your family while in college and after you are done with it.
Just like always, you will find so many documents to read and agree with, sign and apply. All this may lead to so much confusion in your mind. But many institutions offering college financing are a bit organized and just by following their guidelines, you will get there, believe me! For instance, the federal government has good quality online information with many defined links connecting to the ideal application forms that you submit to college financing institutions. In the college financing guide you will also learn of the available student loan programs, estimate the cost for college education; get info about the effects of defaulted loans and even funding alternatives.
Once you have made up your mind that you need a college financier the links to these college financing institutions will help you find the best and a step by step approved application process that will leave you smiling for achieving something.
And Just before I forget! let me give you my last word, that undeniably, university and college education is proving quite expensive these days, and for sure we all want to go through this education just to achieve more for the sake of our future and the generations to come. We are left with no choice but to comply with this changing and devastating stipulation. Well what do we do? Let us get positive and learn more about how we can finance this education however expensive it could get. So get this college financing information yourself so that when you go to look for the financiers you will have a concrete idea on what you expect and a better choice of college too.
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There are several excellent strategies to saving money on groceries, depending on how you eat.
Regular Foods
If you eat commercially prepared foods, you can feed your family on pennies a day by taking advantage of coupons and refunds. By combining sales, manufacturer's and store coupons, you can get items for free, or even get paid to take them. Forget a savings of 25c off a tube of toothpaste. Stores have got awesome deals ripe for the taking, if you understand the concept. On foods you cannot get free, like meats and produce, there are great organizations out there that serve the general public (not low income folks) like Angel Food Ministries where you can get a box of restaurant quality meats, produce, and other staples, worth $50-75, for only $25. Many areas across the country also have the SHARE program, which provides heavy discounts on meats and staples in exchange for your involvement in your choice of volunteer work in your community.
Healthy Foods
Unfortunately, those of us who choose to eat organic or health foods do not have the ability to acquire food so inexpensively. There are relatively few coupons on the market for organic foods, as they are not advertised as heavily. But, there are other options!
1. Organic Co-Ops
Check out your local organic coops. This is where multiple families get together to share a wholesale organic purchase, usually produce.
2. Community Supported Agriculture, CSA
Check out the local CSA in your area. This is where you purchase, in advance, a share of a farmer's harvest. The food is healthy, fresh, and does not travel long distances so it can be ripened on the vine instead of picked early and artificially ripened.
3. Grow it Yourself
If you have the space, the most cost effective way to reduce your healthy food grocery bill is to grow/raise some food yourself. Victory gardens, herb gardens, fruit trees, chickens and even rabbits can be raised in a small location without a huge investment of money or time. You can even sell or barter excess foods.
No matter how you choose to eat, there are ways to cut down on your grocery bills. A few more tips:
-Menu Plan
-Write out a grocery list
-Shop alone (no hubby or kids)
-Do not grocery shop while hungry
-Take a certain amount of cash with you and leave your credit cards at home
Regular Foods
If you eat commercially prepared foods, you can feed your family on pennies a day by taking advantage of coupons and refunds. By combining sales, manufacturer's and store coupons, you can get items for free, or even get paid to take them. Forget a savings of 25c off a tube of toothpaste. Stores have got awesome deals ripe for the taking, if you understand the concept. On foods you cannot get free, like meats and produce, there are great organizations out there that serve the general public (not low income folks) like Angel Food Ministries where you can get a box of restaurant quality meats, produce, and other staples, worth $50-75, for only $25. Many areas across the country also have the SHARE program, which provides heavy discounts on meats and staples in exchange for your involvement in your choice of volunteer work in your community.
Healthy Foods
Unfortunately, those of us who choose to eat organic or health foods do not have the ability to acquire food so inexpensively. There are relatively few coupons on the market for organic foods, as they are not advertised as heavily. But, there are other options!
1. Organic Co-Ops
Check out your local organic coops. This is where multiple families get together to share a wholesale organic purchase, usually produce.
2. Community Supported Agriculture, CSA
Check out the local CSA in your area. This is where you purchase, in advance, a share of a farmer's harvest. The food is healthy, fresh, and does not travel long distances so it can be ripened on the vine instead of picked early and artificially ripened.
3. Grow it Yourself
If you have the space, the most cost effective way to reduce your healthy food grocery bill is to grow/raise some food yourself. Victory gardens, herb gardens, fruit trees, chickens and even rabbits can be raised in a small location without a huge investment of money or time. You can even sell or barter excess foods.
No matter how you choose to eat, there are ways to cut down on your grocery bills. A few more tips:
-Menu Plan
-Write out a grocery list
-Shop alone (no hubby or kids)
-Do not grocery shop while hungry
-Take a certain amount of cash with you and leave your credit cards at home
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