The 3 Bucket Wealth Strategy
The 3 Bucket Wealth Strategy is a simple, effective and highly scalable framework for allocating your money. This is the foundational wealth structure we teach at Infinite Prosperity.
Here’s the highlights:
- Your 3 buckets are Savings, Investments & Speculations.
- Fill them from your income in this order.
- Your savings bucket should be a multiple of your living expenses.
It is wise to have:
- 2 months of living expenses stored in cash (minimum)
- 3-6 months of living expenses stored in cash (ideal)
- 12 months of living expenses stored in cash (supreme stability)
- If your living expenses are $4,000 per month… keep filling your Savings bucket until you have (4000 x 3) $12,000 in it.
- This represents 3 months of living expenses.
At that time, you may start filling your investment bucket.
- Unless you have a provable skillset in speculation, keep filling your investment bucket.
- While you’re filling the first 2 buckets, you can be learning how to manage the last 2 buckets in a zero risk environment (paper trading, forward testing, mentorship, strategy development etc.)
- This is wise, as the learning curve alone may take some time.
- Check yourself before you wreck yourself…
- Most people have a gambling addiction combined with an escape complex. They try to rapidly escape their unfulfilled lives and end up doing foolish things that makes their lives even worse.
- Know the difference between an investment and a speculation… use the Investment vs. Speculation Calculator provided at Infinite Prosperity to grade an opportunity.
- When you’re ready to speculate (and you have certainty in your system, not hope-based punting) ease into it gradually.
- Don’t test the depth of the river with both feet.
- Depending on your 3, 6 and 12 month performance, you may rebalance capital and redirect income into your buckets at gradually adjusting ratios.
- In this way, master speculators will gain the advantage of having more of their capital generating high returns… novice speculators won’t loose their shirt… and non-speculators can still grow wealth by deploying long term investment strategies…
- This is a win/win/win framework.