The Three Legged Stool

My paternal grandparents were born near Lake Como, Italy. My grandfather learned how to farm, and he did so until his death chopping wood at the age of 88. As a boy, I would walk into the barn where I watched him milking cows. Never mastered, but I liked hearing the ping of fresh milk in the galvanized bucket. To get where he needed to reach Popper would sit on a three-legged stool. This wooden stool reminds me of three legs investment for any household or business endeavor. As you know, many things come in sequence or synergy of three, even. Sneezes

First stage: investment

Although debate continues about asset allocation, no one denies the impact and the importance of diversification. Also, all investors are aware of investment risks, although many will not talk about it. Assets distributed among a diverse group of assets contributes further safety when money is exposed to the unexpected. We allowed ourselves within the matrix of large or macro-economic changes. Observing the oil price, the weakened value of the dollar, and the rise of China recommends broad asset class participation. Robert Kreitler in his book, Getting Started in Global Investing writes: "Investors focused exclusively on Wall Street are ignoring the global turnaround in the global."

Noticed the manic behavior or the volatility of the markets? Volatility is equal to investor uncertainty. Since institutions account for the majority of the stock and bond trading, even the "big boys and girls find the markets" uncertain ". Implementation of hedging strategies seeks to reduce and take advantage of the volatility. Uncertainty Hedging your bets' recognizes that when one is running up, the other is down Special trusts are commodities, currencies and real estate investment choices possible Consider Roger Gibson's Asset Allocation:.. Balancing Financial Risk

Second stage: Real Estate

My maternal grandfather never trusted the stock market. Lumber, mortar, land, mortgages represented that mattered to him. Admittedly, it worked for him. My wife tells me of a local couple who have used their home equity to purchase a "fixer-upper" that they hope to "flip" for a profit. Real estate is a net value creator for some. All investments have "boom and bust" cycles. Landlords, tenants lost to low mortgage rates. Now, the cycle change, and multi-unit housing can have positive cash flow and capital gains to provide the long term. Though finding property where you lives makes logistical sense, finding a home in places like New Bern, North Carolina and a retirement income can provide. Scott Frank tells his strategy in Buy Low, Rent Smart, Sell High
Third leg: Cash Flow

One of our children job recently changed. It was all about the cash flow. In our community, on fixed income frustrated by increasing property taxes, it's all about the cash flow. Finding a constant stream of income, even in small steps, validates the effort. From hobby to websites, entrepreneurial instincts work for many. Ask Martha Stewart or Kevin Bidwell. Each succeeds with an idea that serves users while providing potential life-time streams of income. Not many of us, such as multi-level marketing, but multi-billion dollar companies exist because many believe it. A call from a successful colleague living in India yesterday confirms this interest internationally. E-commerce transactions over $ 3 trillion in North America in 2004, and all ideas are not discovered. Want some guidelines for testing your ideas? Read The Wall Street Journal, Monday, May 9, 2005, "you have a great idea. Now what?" by Wendy Bounds.

"... A cord of three strands is not quickly broken." - Ecclesiastes 4:12 NIV (New International Version)