Wealth is a great thing to have and a great thing to share. – Harold Honickman
Not sure how to invest your money in these perilous times? I’ve created a portfolio that you and your family can aspire to build over the long-term. African Americans can’t invest like our counterparts because our need to still develop wealth is high. Other groups also have the advantage of resources either multi-generational or able to receive reverse remittances from their home countries. Therefore, we won’t be able to hold as large of cash positions as typically recommended. This presents some very tricky problems with hard assets in a lot of cases not producing a lot of cash in the short-term but having much greater long-term appreciation. “Cash is King” as my old entrepreneurship teacher use to say so don’t get over zealous when deploying your cash position into hard assets. At least 8% cash position is always needed and if you’re less risky don’t be afraid to bump it up to 15%. Especially in these uncertain times.
The breakdown of the portfolio consist of two parts. The asset class itself like cash and then the vehicle breakdown of which that asset should be deployed. Any questions feel free to put them in the comment section. Build wise. Build strong.
Cash (Checking, Money Market, & Cash Alternatives) – 8%
Checking 40% l Money Market 30% l Cash Alternatives 30%
Fixed Income (Corporate Bonds, Muni Bonds, Junk Bonds) – 10%
Corporate 55% l Muni 35% l Junk 10%
Alternative Investments (Hedge Funds, Collectibles, and Metals) – 4%
Collectibles 50% l Metals 50%
Stocks & Index Funds (Africa, BRIC, and Euro/US) – 28%
Africa 45% l BRIC 35% l Euro/US 20%
Real Estate (Rental Property & Land) – 23%
Rental Property 65% l Land 35%
Private Equity (Entrepreneurship/Franchises) – 17%
Philanthropy (Non-Profit Investing) – 10%
Childhood Education Programs 50% l African American Arts 25% l HBCUs 25%
INVESTMENT ACCOUNTS (Limits):
ROTH IRA ($5000/year)
BROKERAGE ACCOUNT (Unlimited)
ROTH IRA FOR MINORS ($5000/year)
529 PLAN ($200,000)*
*Max contribution to the account over the lifetime of its existence.