< Back to Blog

Bucket Strategy For Your Financial Needs

Our 3-Bucket Strategy For Your Financial Needs

By Richard Riva

Investing and planning for the future can feel downright overwhelming. How do you balance saving for your short-term goals, retirement, plus taking care of today’s needs? Not to mention the unknown of market volatility and rising inflation. If you’re worried about all of this, you aren’t alone. The good news is that there is a solution, an approach to structuring your assets to not only work to provide reliable income when you need it but also strive to grow your money over the long term, to foster long term financial independence. Let’s talk about what our 3-bucket strategy looks like and how it can meet your financial needs.

Invest with Confidence

No matter what life (or the markets) throws your way, it’s crucial to remember two things: what matters most and what we can control. When it comes to your money, what matters most is your purpose and goals, and what we can control is the philosophy, commitment, and process to move you forward toward those goals. That’s what we focus on in our 3-bucket approach.

Here’s a rundown of each bucket and how it plays a role in your overall investment strategy.

Bucket #1: Safe and Liquid NOW Bucket 

The first bucket is focused on your most liquid asset—cash. Cash plays two roles in your short-term investment strategy. First, it allows you to hold onto profits when the markets have given you more than your financial plan and risk tolerance need. Second, it allows you to add back to positions when market returns are below what your financial plan calls for (which is what we’re experiencing now in this financial crisis). The goal of this bucket is to provide you with an emergency fund (income for up to 12 months) and money for short-term planned expenses. 

Bucket #2: Conservative Risk-Off SOON Bucket

With the goal of future income protection, this bucket focuses on “Goldilocks” investments that aim to protect your future income needs with little to no downside risk exposure, while still offering enough growth to preserve your capital against inflation. This bucket seeks to provide conservative growth not subject to sequence of returns and income for the first phase of retirement. 

Bucket #3: Risk-On Long-term Growth LATER Bucket

The last bucket is focused on preserving the buying power of your capital over time. This is where attention to individual stocks comes into play, so you can make sure that the dollar you have today will still buy a dollar of goods and services in the future. A strategic allocation of equities and bonds is known to sustain the buying power of your capital assets over time. Of the three buckets, this is the only one that’s considered to be a “risk-on” strategy because of the pricing volatility inherent in our capitalist market system. The end result is growth and income for retirement for life, a tax-efficient plan, and provision for long-term care and disability to cover your healthcare needs for life. 

A Principled Strategy for Life

As you move through life and all that it brings, we stay focused on your life goals, build your financial plans, and provide the specific wealth management tools needed to address your family’s short-term, intermediate and long-term objectives. If you are looking for a tailored financial plan and a financial partner who is dedicated to your success, then our enhanced proprietary process and the team at Wealth Management Solutions could be the solution to your financial needs. Learn more by reaching out to us at (949) 475-9700 or info@wms-llc.com to schedule a complimentary consultation.

About Richard

Richard Riva, the founding partner of Wealth Management Solutions, helps families advance their purpose in the framework of family financial matters. He brings comprehensive experience in banking, trust and investment services, and as an independent financial business, the passion in helping people and families, as a trusted advisor.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific investment advice or recommendations for any individual. The investment strategies mentioned here may not be suitable for everyone.

RELATED THOUGHTS

Blog

Mastermind Collective: A Conversation with Greg Reese

We have the Mastermind Collective to be a family board of advisors for our clients. Greg Reese is a tax expert and we’ve worked closely together to solve a number of challenges for our clients.

ReimaginINg How Financial Advice and Services are Designed and Delivered

Scroll to Top