IMPORTANT: Be sure to read our Disclaimers and Notices here and throughout the Intrinsic Value Wealth Report before you begin our wealth-building program.
STEP ONE
Set up a recurring investment into your bank account.
Set up a recurring savings amount into your bank account. This can be done on a periodic basis such as weekly or monthly. All banks make it easy to save like this each month. The important thing is to pick some amount that you will actually be able to save at a periodic interval. Don’t choose an amount that you won’t be able to sustain. Sticking to your saving and investment plan is one of the most important parts of this wealth building program.
STEP TWO
Determine an investment allocation.
Asset allocation is the process whereby you divide your investment dollars into the various investment categories such as stocks, bonds, and real estate.
The link, Asset Allocations, takes you to a page where we have three suggested asset allocations that depend on whether you are a Conservative, Moderate, or Aggressive investor.
The suggested allocations are just a starting point for your consideration. No two investors are the same; so you must consider your own tolerance for risk, savings and retirement needs, and other personal needs and circumstances. The suggested allocations are somewhat typical for what the average conservative, moderate, or aggressive investor might prefer (although in our research in putting these guidelines together, we did notice a pretty wide range in the allocations suggested by other investment firms). But not you or anyone else is typical! So, only use these suggested allocations as guidelines and as a starting point in determining your own asset allocation.
This link, Asset Allocation Resources, will take you to other resources that may help you in determining a suitable asset allocation that is appropriate for you. The Schwab and Vanguard links also have questionnaires that may help you determine your tolerance for risk, which is an important component of determining a suitable asset allocation.
STEP THREE
Select your investments.
Review the Intrinsic Value Wealth Creation Pyramid to gain an understanding of the major investment categories in which you should consider investing.
Under our program, you have two options for investing: (1) you can invest in individual securities (e.g. individual stocks, bonds, and other investments); (2) or you can invest in mutual funds of stocks, bonds, and other investments. If you are just starting out, we suggest you invest in mutual funds. Click Individual Securities or Mutual Funds for a description of each of these investments.
If you are starting out, or want to add to your mutual fund or other portfolio positions, go to our Mutual Funds page to start investing.
If you are an experienced investor and already have a portfolio of investments started, go to the Individual Securities sections to select individual securities and other investments.
A good investment strategy to consider is to invest in both mutual funds and individual securities. Starting out, you can invest in mutual funds exclusively until you have invested around $5,000 to $10,000. This will help to ensure that you have a good measure of diversification. After that, start investing in individual securities.
A variation on this strategy is to invest some portion of your periodic savings amount, say 25 percent, in individual securities and 75% in mutual funds. This strategy can be employed from the beginning or once you get to the threshold of $5,000 to $10,000. Once you have reached the threshold amount, you can consider investing exclusively in individual securities or increasing the proportion you put into individual securities – but you should target having a diversified portfolio of 25 to 30 individual stocks after a period of 18 to 24 months of periodic investing. When investing in individual domestic stock securities, consider using the mutual funds for the other portion of your asset allocation into bonds, international securities, and real estate securities to ensure adequate diversification.
STEP FOUR
Invest!
Start your program of building wealth today by following the four steps to building wealth.
Go to the Step Four Supplemental Page to learn about where to go to invest in the investments you have chosen; retirement planning; dollar cost averaging; and other topics that may be helpful to you as you begin or continue your savings, investment, and wealth building program.