Why Spread Risk?
The “Baby Bucket” principle shows you how to spread risk. And we talked about the fact that the bigger returns are on the riskier investments. So why not just go to the end game and start enjoying big returns right off the top? Why bother with these smaller securities?
“…the fastest way to become wealthy is determined by the speed at which you get yourself into a position where you can afford to lose money.”
–Jamie McIntyre
Success in wealth creation doesn’t just come from having access to money to dump into a stock. Wealth is built when you have money to back you so that you can afford to take the big risks—so that you can afford to lose the money on your investment.
The Baby Bucket strategy aligns your money and investments in a way that allows you to create wealth in smaller intervals and also builds an investment base. When you have the smaller bucket working for you, you have a self-sustaining financial program that brings in investment money and works as a fall-back should a single large investment go bust. This is what the wealthy do, and this is what you should do if you want to find an easy path to investment and wealth creation.
The bucket concept is more about being able to afford to invest and lose than it is about gains (which will come naturally later). The bucket strategy is about building financial intelligence and sustainability.
Note, though, that being able to afford loss does not mean you have to lose
It just means that you will not be wiped out and back to square one if you do. This concept of spreading risk is about creating sustainability in your wealth creation program, and securing true financial freedom by having all the bases covered.
Sean Rasmussen
Wealth Creation Blog
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Tags: Financial Success, Jamie McIntyre, Making Money, Money, Success, Wealth, Wealth Creation