How to Diversify Your Savings | 413

In times of high risk, people rush to diversify money.

But a financial advisor never really diversifies your portfolio.

Are there good ways to diversify your investments?

Tune in to find out ways to diversify, keep your money safe, AND still grow it!

Hello my fellow Ripplers! This is Chris Miles. Your Cash Flow Expert and Anti-Financial Advisor. Hey guys, I’m so excited to welcome you out to this show because this show is for you and it’s about you. Those of you that work so hard for your money, but you want that money to work harder for you. Now! You want that freedom. That cash flow. That prosperity. Today! Not 30 or 40 bazillion years from now, but right now. So you have that freedom to do what you love with those you love and do whenever the heck you feel like it.

But more than that, it’s more than just trying to, you know, have a wonderful lifestyle and flying airplanes and boats. Hopefully you’re not flying boats by the way, but who knows. But anyways, it’s not about just enjoying your life and just about yourself and selfishness. It’s about you, be able to give back. You’ll be able to bless more lives by creating a ripple effect as a Rippler and be able to bless the lives of those around you. And so guys, I’m proud to be one of those Ripplers with you because you guys are the reason I can create a bigger ripple effect in my life through what we offer this show today. So thank you so much for being a part of it.

As a reminder, check out our website, MoneyRipples.com Not only can you download Beyond Rice & Beans, Seven Secrets To Free Up Cash Today, to find more money, but you can also watch other of these videos. If not on YouTube, you can watch them on the site. Videos of this very show, as well as other topics that are on there in the blog section. So guys check that out!

Alright today. So I really want to get into about diversifying, right? Because I’m hearing this word a lot. Like I’m getting so many people talking to me and saying, yeah, Chris, like, I really feel like I need to diversify my money. Chris, I feel like you need to diversify my money. And why does this come up? It comes up every time there’s uncertainty, right? And rightfully so, because if you have your money at risk, if it’s feeling uncertain, you’re going to say, I can’t all have all my eggs in this basket. What if this basket falls flat? What if I drop this basket and crush all my eggs? I need to get more baskets. Right? So, and there’s some merit to that because the more you try to take higher risks, the more you have to diversify. And it’s not because you have to diversify necessarily. But if you’re going to take high risks with this, right.

Especially if you do things that are out of your control, you’re essentially kind of guessing, you know, you really are. And that’s why financial advisors are telling you for years, you have to diversify all your money, right? You had to diversify in these different areas. The truth is that a financial advisor never diversifies you. They actually put you in the same exact asset class of paper assets every time, but they might say, great, well, some of this might go into the stock market. Some of this might go into the bond market or treasuries, or am I going to international stocks versus US equities and all this kind of stuff. Right? But the truth is, you’re really not that diversified. And so what most people do is they hold onto it in cash and savings or money markets. Where they might get like an annuity or something like that.

But they’re trying to do other certain things. And so I get a lot of people saying to me, Chris, like, I feel like I need to diversify my money. Now, you just go along with diversification before we talk about how to diversify your savings. Cause there are good ways of doing it. One thing that people say is Chris, well, if you do real estate so much, how do you diversify?

Here’s my thing. Here’s how I diversify. Well, one, I personally love to buy and own properties, even including yes, single family homes. I actually like them. It doesn’t mean I always want to do single family homes. I don’t mind doing multifamily. I don’t mind syndications. I got money in those two. But I really do love having a home, like having an actual properties that I own and control. I actually feel like I can, I don’t have to diversify as much because I have control what happens.

There’s not somebody else managing. Well, okay. I have property managers, right? But it’s not like somebody else is owning the property for me. And I’m just putting a little money into it. You know, in those kind of cases, you do need to diversify. If you’re in a lot of syndications or funds. Yeah. You need to not put all your money in those baskets because there’s a degree of separation between you and the person doing the investing. And as a result, you lose control and that increases your risk. And therefore you do need to be diversified more. For those of us who buy more real estate. How do we do that? You know, if we have more control, one, we don’t worry about diversification because as you know, Mark Cuban would say, diversification’s for idiots. Has a Warren Buffet would say more tactfully. He would say that diversification is admission of ignorance.

Basically. You don’t know what you’re doing. So you diversify in all these little places. It’s throwing spaghetti on the wall, hoping something works. That’s not what we’re talking about doing here. When I do real estate diversifying, we might diversify in different locations, right? So even though I buy the same kind of properties, I might say, well, Hey, I want to be in different markets. You know? Sure. Maybe we’ll have Memphis, but maybe we’ll have North Carolina. Maybe we have Indiana or Pennsylvania or Virginia or Florida, Oklahoma, Missouri, you know, whatever. Right? Like finding these different pockets, these different markets to be in. That is how you diversify within real estate without having to own lots of different types of real estate.

Now, granted again, I still don’t mind doing syndications where we put money into like, you know, big apartment complexes and things like that. That’s fine too. I put the minority of my assets into those kinds of investments. But I personally like to do real estate. Now, when you have your savings, right? Now, switching back to this topic, you have enough savings. How do you diversify it? Well, the truth is that if you’ve got money working in different places, you do want money in savings. First and foremost, you’ve got to make sure you have an emergency savings. Right? Now. When I look at savings, of course, if it’s not emergency savings or if it doesn’t have a purpose short term, it’s usually out doing something. It’s usually in being invested in something like real estate. Right? So how I diversify my “Savings”? Is often it goes out into other investments that cash flow. Again, I like regular stable cashflow. That’s my goal. That’s the goal I try to, you know, really try to present to my clients is that’s the real key to freedom, right?

The real key to feeling secure is knowing you have regular stable cash flow coming in from multiple streams of income. And yes, they can be from some of the same assets. But, how about the money that’s just emergency savings? What about the money that’s just sitting there doing nothing? Right? That is the key. Now I’m going to tell you about what I do. This doesn’t mean that’s, this is what you have to do, but this is just kind of strategy that my wife and I have adopted ourselves because you know, the truth is, is that we want money liquid available too, just in case, you know, we never know what happens. Even though I have multiple streams of income coming in from multiple sources. My wife told me the other day, she said, Chris, I think we need to increase our emergency savings. I just feel like we need to have more cash on hand just in case.

And I said, all right, well, how much? She said, we need to have at least $200,000. Now think of it in my world. I’m thinking that is a lot of money to just have, do nothing. You know, we had, you know, well, well over a hundred thousand before, but she’s like, no, we need 200,000 in savings. So I’m thinking there’s an opportunity cost of this money. What if this money could be out invested? But I also understand the importance of, you know, she happy me happy, right? I’m sure you guys understand that. And I also understood too. I’m like, well, you know, she could be right. Sometimes she has amazing intuition that sometimes she could be right about that. And so I said, all right, let’s do that. But let’s diversify our savings. And she said, well, what do you mean? I said, well, we keep a lot of it.

We have a lot in the bank. We have some in our insurance savings. She’s like, I keep forgetting about the insurance savings. I’m like, yep. That’s there. We can use that. I said, let’s do this. Let’s have two thirds earmarked from the insurance savings to be part of this money. So if it’s 200,000 that she wants, like great, let’s make sure 130,000 125,000 or so of it is there as emergency. As emergency fund, right? Inside the life insurance. Inside my infinite banking policy, right? As you guys have heard it before mentioned. This is money I’m not investing with. This is money that I’m keeping as a baseline. So that means that anything above 130,000 140,000 that’s in the life insurance, anything about that? Great, that can be out investing in double-dipping. As you’ve heard me talk about, you know, making money twice where I’m making money in insurance and making money on my real estate and other investments at the same time, perfect.

That can still work, but earmarked money that we don’t touch, that we let stay in there that earns, you know, that’s 140,000 or whatever. Right? Now, the other 60,000, we split up between online savings accounts that paid better than what the bank will pay locally, but we still keep money in the bank in case we need to get money today. So it’s a three phase thing. There’s money in the bank that money we can access today, you know, to keep about a good 20,000 give or take. We probably have more than that even, but that’s the kind of money earmarked for those emergency savings, right? Then beyond that there’s emergency savings in the online banking. That’s like the other 40,000 plus. That money is there primarily, just so we can, you know, we know it can be transferred within a day or two to the local bank anyways.

So it’s that next wave. So first wave is if I need money today, you go walk into the bank, ATM, whatever, pull money out. Oh, by the way, we keep cash on hand as well. For money in case the ATM is, are broken down or power goes out EMP who knows catastrophic stuff, right? Earthquakes, whatever. We have cash too, but obviously we can walk into the bank. We can walk in and pull cash out.

Second phase, online banking. You know, there’s an online banking sources. I’ll email you guys about it, if you’re on my email list, you’ll actually get that. There’s at least 1% paying out. Even though the rates have dropped like a rock. There are still online savings accounts that pay like around 1%. So we have that as well. And that is paying a certain ammount too. And then of course the rest, it’s the life insurance. Now do the math of me a little bit, right? If I just had say we had $200,000 earning 0.1% a year in the local bank, right? I mean, do they do the math here? That’s 200 bucks a year. Not a month. A year of $200,000. 200 bucks a year.

I just got done doing an episode last time where we talked about having someone to invest in 200,000 to make almost 2000 a month, right? So, to go from 2000 a month, to 200 a year is not impressive. This is why people are like going stir crazy. I get clients sometimes I’ll have a half million sitting in their bank or their checking account. They’re like, this money could be working for me. It’s doing nothing. Well, okay. Well instead of 200 bucks a year. Can we do better than that? Well, here’s how I break it down. That 200,000, right? That he said 20,000 with a local bank, right. That 20,000 makes 0.1%. It makes a whopping, what does that? 20 bucks a year instead? So 20 bucks a year, right? So that 10% of that it’s making 20 bucks a year. So there’s 20. Then we’ve got the 40,000 earning about 1% a year. So that 40,000 earning 1% means is there any 400. That’s 420 total with this 60,000, that’s already better than 200,000 at 0.1%. Right? So there we go, 420.

Now the other 140,000 is in life insurance. Now, even those of you that might be older than me, or maybe don’t have quite the same health. Usually you can at least net a 4% return on your money. Usually it’s at least four to five or more depending on your age and health. But let’s just say it’s 4% a year, right? You go conservative here. And that 4% that 160,000 or sorry, 140,000 earning 4%. That’s making me about 5,600 a year. So 5,600 plus the 420, it means we’re making about 6,000 a year instead of 200 a year. That’s 30 times better. Right? That’s kind of like how we do that. So, you know, I had, you really explained like, Hey, the money’s still liquid. I can get to my life insurance money by the way, within a week to week and a half max.

So I know I can get to that money quickly anyways. So for emergencies, it’s amazing. By the way, it’s amazing to where I’ve seen a lot of people last few months have been reach out to me about that very strategy to say, you know, Chris, I don’t even care about leveraging it and using it to invest like you’ve taught. I just need to have money sitting around just in case. I needed something for peace of mind, but I wasn’t earning better money. Oh, here’s the other thing too, in that first example, $200,000, right? You’re only earning 200 bucks a year. Realize you have to pay taxes on that stupid 200 bucks a year. So you don’t get 200 bucks a year. Cause you have to pay taxes on it, right? Income tax on that interest, you know, with the money in the life insurance, I don’t pay any taxes on that.

The only thing I had to pay, I was on that 420, the other 5,600. I paid nothing. There’s no tax on it. It’s like a Roth IRA, no tax money at all. So now I’m keeping more money, not to mention I’m making 30 times more, but now keeping more of that money. So it’s more than 30 times as a result. And so that’s the thing that I’m trying to point out here is like, guys, you can be more efficient and that’s why some people are doing, they’re saying, you know what? Heck, this could be supplemental retirement. I’m getting a pension from the airline or whatever I worked for or from this company. Or I got this or I got this other real estate too. Honestly, I don’t even need to use this money to invest and create cash flow from it. Cool. It gives you options.

You can diversify it. You can use it however you want. I use it, whether it’s for emergency savings and I use it for investing, right? So it’s an ability to, for me to be able to use that appropriately. So using my life insurance man, some people poop all over it, but the truth is that those of us that know how to use it, realize it’s brilliant. And I’ve had many clients realize the same thing they say, man, why doesn’t everybody know about it? The truth is because most time, even there are people teaching about it. They teach you in a crappy way of, it’s someday. It’s like a 401k. You’ll lock it up and someday they’ll touch it, but they never tell you, Hey, if you design it the right way, which most don’t even know how to do it the right way.

If you designed it the right way, you can have access to cash from the first month that you set it up. You’ve got money available right away. So that’s my point guys, is that you can design it. You can diversify your savings, but you got to do it the right way and do in a way that again can create some real, some real growth, some real money, you know? So not only can you keep money safe, but at least it’s doing something for you versus doing nothing. And you’re losing it because you’re not only earning no interest, there’s opportunity costs. But now you get taxed on earning hardly any interest. So that’s my point for you guys want to diversify your savings, but for different ways to put it. But again, diversifying investments, whole another story, and it doesn’t have to look the traditional way. In fact, it could be better with less risk depending on how you do it. And you can do it well and you can make amazing returns and you can create cash flow now, which is the key.

We want that life today. Look at that. Sign on my board right here. I’m trying to get my finger on it. I’m trying to do this in reverse. There! There it is! Live your life now not tomorrow, right? This is about living that dream life today. Doesn’t mean you just go and blow it. This means you create the life now. That is the purpose of this podcast. Guys. Hope all of you make a wonderful and prosperous week. And we’ll see you later.