Managed Growth: How to Win the Money Game

If money were a game, many of us would be losing. Making big income doesn't mean you're winning. Millions are drowning in debt. Bankruptcies don't just happen to the working poor—they befall people from all walks of life.

Why People Lose the Money Game

Some people make a lot, but they spend a lot too. Others make big bets when the market is hot but shy away when the market is undervalued.

They lose and don't know why they lose. And those who win don't often know why they win. If they knew, they would continue to do what makes them win and avoid what makes them lose.

Lack of knowing how money works is the main cause for losing the money game.

The Growth vs. Safety Dilemma

Do you want growth or safety?

When thinking about safety for their money, most people think about banks. When they want growth, most think about investment securities.

The problem is: if you want growth, you may not get safety. And if you want safety, you may not get the growth to beat inflation.

Sound like a catch-22? Can you get both growth potential and safety?

It can be possible. When you play sports, you have to play both offense and defense. You've got to be strong on both sides. You can't have all the players attack and leave no one to defend the home base.

The Four Pillars of Managed Growth

When building your future and making financial decisions, you should ask these four questions:

1. Can it potentially grow to achieve my goal?
2. Is it safe enough?
3. Does it have tax advantages?
4. Does it have proper protection?

If you have a good answer to each of these questions, you are likely moving in the right direction toward your goal.

The Strategies That Make It Possible

Diversify your assets
You allocate your assets into different positions. Don't put all your eggs in one basket.

Use dollar cost averaging
Capitalize on the downtime in the market by investing consistently, regardless of market conditions.

Rebalance periodically
Occasionally rebalance your investment mix if your objectives have changed and to make sure your investments are doing what you need them to do.

Take advantage of tax advantages
Use what the law allows to grow more and keep more. A tax savings of 20% is as good as a 20% gain in rate of return.

Build a strong defense
You must definitely have good protection of your life, your investments, and your estate.

The Math That Matters

The math of losses is brutal. Lose 50% of your portfolio, and you need a 100% gain just to get back to even.

A 7% annual return doubles your money every 10 years (Rule of 72). Over 30 years:

• $10,000 becomes $80,000
• $50,000 becomes $400,000
• $100,000 becomes $800,000

No gambling required. No stress. No watching the market every day hoping your picks work out.

Growth Is Good. Managed Growth Is Better.

The people who end up financially secure aren't usually the ones who made one brilliant bet. They're the ones who showed up consistently, year after year, with a strategy that addresses all four pillars: growth, safety, tax advantages, and protection.

Managed growth isn't about getting rich quick. It's about getting rich for certain.