Note:
- By equally diversifying your net worth among three categories (Tangible Assets, Fixed Assets and Equities), it can help preserve and grow your wealth.
- Tangible Assets are the value of your home, second home, your business, furnishings, Autos, boats and other tangible holdings based on the price you would receive if you were forced to sell them today.
- Fixed Income – These are assets that don’t fluctuate as the stock market or real estate market goes up or down. Many of these assets may be FDIC insured. This is your “safe money,” and may be in cash, CDs, Money Market fund or bonds.
- Equities – These are your individual stocks, ETF (Exchange Traded Funds), and mutual funds. These may be held in your workplace retirement plan, in IRA (Individual Retirement Accounts), or in non-retirement brokerage accounts.
- The intent of this idea is to periodically re-adjust your holding to rebalance your net worth so equities or tangible assets never exceed more than 1/3rd of your net worth.
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