In my book Wealth Cycle Investing, on page 203, I give an example of how I invest and what my portfolio looks like. I’ve copied it here for you to review.

This is just an example of my portfolio and isn’t meant to be investing advice. You may choose to invest in stocks, bonds, collectibles or many other potentially good investments, all of which may or may not be good for your situation.

But let me give you some Investing Money Rules:

• Decide whether you want to be an active or passive investor.
• Are you looking for money now (cash flow) or money later (appreciation)?
• Decide what kind of return you want on your investment annually
• What are you liquidity needs? Do you need to keep cash on hand or readily accessible for your needs?
• What are your tax ramifications? How will your taxes will be created or minimized by your investing? Investments can create huge tax liabilities or create huge tax deductions.
• Finally, what are the risks and rewards associated with your investment? How do you measure these variables? Do you have the tendency is to discount the risk and over-rate the reward?

Here are some other Money Rules to help you
Cash Machine Money Rules:

• How much money will you invest in the business?
• Will you bring in JV partners for capital?
• Will you utilize partners for other reasons?
• If so, how much interest/ownership are you willing to give up?
• Will you borrow money for expansion and/or growth
• Will you borrow money for operations?
• Will you purchase assets in the business name?

Money Rules For Holding Assets:

• What kind of entities will you utilize?
• How will your entities be structured in relation to one another?
• How much equity are you willing to put at risk per entity?
• How many businesses/assets will you hold per entity?
• When will you start a new entity?
• Will you pay taxes per entity or flow income to a “mother ship” or to your personal tax return?

Money Rules For Family Spending:

• Will you combine your money and pay all bills out of the joint account?
• Will you have separate accounts for certain bills or for discretionary spending?
• How will you decide on large purchases?
• How much can you each spend without notifying the other person?
• How will you handle money with your children?
• What is your philosophy on debt?

Money Rules For Family & Money:

• Will you loan family members money? If so, how will you structure the payback terms?
• How will you document it?
• If you loan family money, how will you handle the situation if they are not able to repay it?
• Will you borrow money from family? If so, for what reasons?
• How will you repay it? What if you cannot repay it?

Part of my annual money rules is to give a portion of my wealth away to charity. Over the years I’ve adopted families, given to Habitat for Humanity, Children’s Charities like Toys for Tots, Food Banks, Animal Protection Agencies, you name it.

This year I want to hear from you and what are some of your favorite charities and why. I’ll take the best submission and donate a portion of this year’s money to that charity.

Use the comment section below to let me know.

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