The Wealth Code 2.0: How the Rich Stay Rich in Good Times and Bad

Chapter 7

Foundations for Your Financial Table

Every investment has unique characteristics, some good and some bad. Like people, some are temperamental and easily influenced by the ebbs and flows of the general economy while others just go with the flow, no matter what is happening.

Matching Beliefs to Your Asset Choices

When selecting appropriate investment classes to build the various legs of your financial table, one of the most important questions to ask yourself is what is your temperament? Are you a gambler who likes the excitement of possibly doubling your money with the next roll of the dice, or do you seek stability, wanting nothing but consistency in your life?

Once suitability is established, many investments are worth considering, and sometimes having a mixture of the extremes and everything in between is the answer. The aggressively investing young hotshot looking to double his money may potentially benefit by looking at some consistently performing thoroughbreds, and the 95-year-old widow may benefit from looking at some potentially inflation busting quarter horses. The bottom line for any portfolio is balance, and from experience, I feel that the portfolios with the most legs or potential for “checks in the mail” are the most successful ones.

Let’s say you have 20 different legs or sub-legs on your financial table. Maybe check number three drops one month, but checks numbers eight and number fourteen rise that same month. Overall, you are still in the ballpark of ...