Chapter 3. Grasp the Buckets of Money Concept

Successful investing is as much about time as it is about picking the right securities. So if you can "buy" time by having a reliable source of steady income in retirement while you allow your stocks and real estate to grow for 15 years or more, you have a statistical assurance that you're going to make money. (That's not the same as a guarantee, but it's about as close as a mortal can hope for.)

Stripped to its simplest, that's the premise of the Buckets of Money plan: You organize your investments into three main groupings, or "buckets"—and take almost all the risk in Bucket 3 with stocks and real estate. And then—other than possibly taking some dividends from the growth-and-income category of Bucket 3—you don't touch that bucket. While there are many possible variations, the basic strategy is just this: You live by spending down the first two, relatively "safe" buckets while time mitigates those risks in Bucket 3.

If you're like most retirees or preretirees, you hunger for stability, yet yearn for growth to rejuvenate your portfolio that was battered the past couple years. Buckets of Money offers a reassuring—and scientifically proven—strategy that gives investors both growth and income. Thus, this strategy can shield you from the short-term ups and downs of the market. It'll give you the courage and discipline to stay invested no matter what the future holds. It'll help you plan your retirement years with greater confidence.

In this ...

Get The Buckets of Money® Retirement Solution: The Ultimate Guide to Income for Life now with O’Reilly online learning.

O’Reilly members experience live online training, plus books, videos, and digital content from 200+ publishers.