Creating wealth is tough. Maintaining wealth is even more difficult. Jasper Cleoete is a Wealth Coach with over thirty years of experience in the financial sector. He is the founder of GIG Institute and GIG Bank, a mutual bank in South Africa.
Jaseper in his Generational budgeting training, teaches how to allocate your resources to safeguard your wealth. Here is an overview of Jasper’s formula:
- 40% of your wealth should be invested into high liquidity (easy to call up funds within 3 months), lower return, and safe investment. Typical call account. These are cash or short-term fixed deposit accounts.
- 30% of your wealth should be placed into areas of less liquidity IE accessible within 3-6 months. You should aim for higher return eg. 6-12 months long-term investments.
- 20% of your cash should go into less liquid investments such as real estate or projects. This is cash you can access in 12-24 months. They produce higher returns but take longer to access if you need to sell them for cash.
- 10% high risk with the potential for high return. These are items like new untested investment trends, new ideas or investments, etc. These things can make you a lot of money suddenly or could lose all your money, hence exposure needs to be limited.
This is the tricky aspect. A lot of people have lost everything because they placed all their assets into a risky investment and it failed.
Review your allocation formula annually based on how each sector performs.
Watch Jaspers generational budgeting video here.
https://gig-media.thinkific.com/courses/generational-budgeting