Author of The Black Swan: The Impact of the Highly Improbable, Nassim Nicholas Taleb, broke discretionary investing down to a simple guideline. Of your discretionary monies (cash distribution outside of necessary living expenses: i.e. rent/mortgage, food, water, electricity, lifestyle, etc.), 80% should be dedicated to a stable growth environment with little to no volatility, which allows the remaining 20% to be the “designated hitter”, aiming purely for big returns. Balancing your growth vehicles in this fashion provides breathing room and stability moving forward.
Using a Supercharged Savings Strategy gives you the freedom and the power to know what’s ahead and be prepared for when ‘life happens’. Flexibility to work with your current situation but grow alongside you as future life events happen (Buying a New Car, Buying a Home, Getting Married, Moving Out of Town, Changing Jobs/Careers, Annual Vacations, etc.). It also gives you ample opportunity to develop in the market following the 80/20 rule.