Harness Money Tip #14

Diversification versus concentration.

Honestly, I am probably over diversified. which isn’t necessarily a bad thing.

When I was broke, I vowed that I would not be broke a second time and then I went broke a second time. So I knew that I had to make some big changes to ensure that I would not be broke a 3rd time. So I created several different emergency funds and several different investment accounts.

Emergency funds: Rent, Health, Food, Car

Investment Accounts: 401k, ROTH IRA, M1 Finance Brokerage

That is where I should have stopped, but I kept opening different accounts at different places to see which ones worked best. Like Fundrise, MySavingsDirect, BlockFi etc.

The good thing is that I never stopped funding my care accounts or investments. So today I have a nice nest egg for my yearly expenses and investments. But I wasted time and effort and money looking for ways to maximize my dollars.

For most people simple is better.

Focus on funding one account to the max before trying a bunch of different things. Master your 6mo emergency fund before funding your brokerage account. Choose one index fund and growth it as large as possible.

The same goes for stocks or index funds.

Once you have created a massive foundation then you branch and diversify.

For more tips like this check out the Harness Money Newsletter.

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