With the Directions defined we need to make sure we diversify. We must not place our investments in just one vehicle. The proverbial saying: "do not put your eggs in one basket". Our next step is to find appropriate investment vehicles for each of our goals. Fely and I classified our goals first into short term, medium term and long term. Short term are goals within one year, medium term is about 5 years and more than that we consider long term.
We then allocated amounts for each of the goals we set. For example, we saw the need for long term healthcare. We then calculated based on our current need how much we will be needing 15 years from now. We also calculated how much daily, monthly, annual expenses we will have based on our desired lifestyle 10 years from now. We factor in a 7% inflation rate to make our goals more aggressive. We did this calculations for each of our major investment goals.
Then we selected the appropriate investment vehicles for each of our need. We use short term investment instruments for short term goal and long term investment instruments for long term goals. By this process alone, we already have diversified our investments. We have placed our investments in different investment vehicles appropriate for the term we will use it and risk return factors.
This is the beauty of having literacy. We know what instruments we can use for each of our investment needs. We encourage those who just invest on one instrument like real state, or even on gold, or cars, or what they just know as investment to make sure they seek out directions from those who are in the know and who have genuine intention in helping them properly manage their investments.
Contact us if you need to know how to diversify safely and appropriately so you can achieve your goals.....
God bless!
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