January 11, 2007

Asset Allocation Ideas: Part 2

Posted in Uncategorized at 1:33 pm by John Roney

Yesterday I wrote about asset allocation and a model I had learned from Tony Robbins, who had learned the strategy from Sir John Templeton, one of the greatest investors the world has ever seen. It is a strategy that could make both you and I very wealthy over the long-term. This is a fundamental strategy.

The good news is that this strategy is simple. The bad news is also that the strategy is simple. It is so simple that it could be easy to overlook it. Your tendency may be the same as mine–to try and complicate it. Make sure you check yourself. This strategy is proven to work by one of the wealthiest people the world has ever seen (Sir John).

Today’s lesson is about the second part of the formula, what you do with the profits you make in your growth account. Let’s say, for our example here, that you save 10% of your income, and that of that 10%, you allocate 40% for your growth account and 60% for your security accounts. With that 40%, let’s say that you put that money into real estate investments. When you make a profit from your growth investments, you are going to allocate those profits into three buckets, hench the three-bucket asset allocation.

You take one-third of the profits and put them back into your growth investing accounts and another third goes into your security account. With the final third, you put that into your dream account. This is where the plan gets exciting. You see, its good for your brain to see the progress you’re making and that you be able to realize a reward for your good work. You can use your dream account for anything that seems good for you: that dream house or car or boat, a private island, an airplane or even just pilots lessons. Make it something that you would love that you would feel as a good reward for your hard work and dedication to saving and investing.

Tomorrow we will take about the reasons why you must build a solid plan for your money. Its a better reason than you think. : )

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