After reading Sun’s latest article titled Where to Put the Money? I thought that I should have a stab at the answer. In the process, I came up with a flowchart that documents my thinking on where to put all my income.
It should be fairly self explanatory, and details the thought process I try to keep to when budgeting and organising my finances. By minimising the amounts in the red boxes and keeping a healthy balance in the yellow an blue/yellow boxes, I hope to give me enough breathing space to drop some capital into more risky projects such as starting a business, or making some leveraged investments. As I’m still young I can make some risky investments without damaging my standard of life, so the higher returns these investments can bring are attractive. I like to follow a two pronged strategy though with a large proportion of investment capital in “safe” investments, to give me a fall back plan if the risky investments don’t pay off so well. I suppose I’d title my approach “Get Rich Whichever Way”.
Thanks for the mention. This is an excellent chart on where the money should go.
An excellent chart. I absolutely agree with a two (or three) pronged strategy. I use high risk, medium risk and low risk (safe) strategies.
Yeah!! (Wrings hands)! Nice blog you have here. I’ve enjoyed much reading your last posts. Keep it that way.