Challenging the traditional way of thinking about the bucket strategy, author Jason Smith says you should have three buckets: Now, Soon, and Later.
He begins to explain with a story, then dives deeper into the Investing Buckets:
The Now Bucket is for safe and liquid money. This money is not used to invest, it’s to be set aside for emergencies and help you sleep better. Included in this bucket are small and large expenses that are planned. Are you about to retire? Jason says your Now Bucket should contain 12 months of living expenses.
The Soon Bucket is “money you may want to take a more conservative approach on because you may need to draw income or withdrawals sooner rather than later”, Jason says.
The Later Bucket is long-term growth and legacy planning. Jason says this bucket is not just for retirement, it also will cover the increased expenses a widow or widower will have from raising kids as single parent or increased income taxes because their filing status now raises their effective tax rate.
He also cautions against “Freak-out Risk“. Listen as he explains how volatility in the market causes people to make emotional decisions with their money at the exact wrong time.
Today’s episode is sponsored by BUZZ Index
Today’s Guest, Jason Smith
Jason Smith is Founder and President of Clarity 2 Prosperity. His book, The Bucket Plan®: Protecting and Growing Your Assets for a Worry-Free Retirement, covers more than just the three buckets.
Jason Smith’s Website: Clarity2Prosperity.com
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About our sponsor, BUZZ Index
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Invest in the wisdom of crowds. Visit MoneyTreePodcast.com/BUZZ for more information.