The Big Picture

Don't put all your eggs in one basket

Don’t put all your eggs in one basket

Everyone needs a big picture.  It can be simple, “I want a plot of land and a cabin where I can live comfortably”, or complex, “I want to have my dividends finance 40% of my lifestyle and have my rental properties finance the rest”.  I’ve decided to lay out my overall investment strategy here.  This is my big picture (I will not go into too many details).  If you find it difficult to align yourself with my own goals that’s perfectly fine.  There is no right or wrong method to becoming wealthy.  Also, I never intended to play the pied piper and have people follow me blindly. I am also learning on this journey and hope that we can benefit from each others mistakes and successes.

Personally, I try to split my investments into three categories:

  • 33% retirement (split between a RothIRA and 401k)
  • 33% real estate (rental properties)
  • 33% business (either online or brick and mortar)

Think of it as an extreme approach to the “don’t put all your eggs in one basket” motto.  I will say that since I am young I have focused greatly on the retirement and real estate arm of my grand plan.  It was easier to get into stocks and rental properties and hold off on building a business.  To date, I do not have a substantial income coming in through my businesses.  And this is a big picture type plan.  It is not a “I have three buckets and I put one dollar at a time into each bucket”.

A little reasoning behind the “Big Picture”

The reasoning behind the split is to diversify among markets.  Typically during a downturn in the economy one or two markets will be hit but it is rare for all three (real estate, stocks, and business) to simultaneously suffer.  I would also like for each branch to be able to support me through retirement.   This may be a very conservative method to investing but the wife and I make good money so I don’t see why we shouldn’t diversify our money a little further than the typical family.

There are a few caveats to my plan:

  1. Have a decent Emergency Fund on top of this
  2. Have a paid off home
  3. Noooooo Debt (boo debt boo)
  4. Earn enough to get on shark tank because that is like my dream job.. But no really, investing in startups (WHILE INCREDIBLY RISKY) would be sooo fun to me.
  5. Let the wife finally start a family at some point

Also, it’s important to understand that I’m not waiting for my life to start. While I save money I also spend money on the things I love doing (mostly travel, I love to travel, I would travel full time too if shark tank wasn’t an option).