The Taoist symbol for yin and yang is an incredibly insightful philosophical tool, but did you know the concept can also be applied to building your investment portfolio? Curious how? Good! Because you need sound principles guiding your investment strategy. And, in addition to talking about when to invest, we also want to talk about how. Applying the idea of yin and yang to money is a great approach to take.
Yin represents uncertainty, chaos and risk. When you’re building your Freedom Generator, you need investments that perform well when the market is slow, because such times are as inevitable as the ebb and flow of tides. Cash and bonds, for example, are investments that usually perform well when the market is in a down cycle.
Yang symbolizes stability, optimism and positivity. Buying investments that perform successfully when the market is doing well is just as important as choosing those that perform in a cloudy market. For instance, property and shares are great investments in a yang environment, because they perform well in sunny times.
Invest For Balance
The key to the yin and yang of investing is balance. You want a combination of investments that perform well in cloudy times balanced with investments that perform well when the market is sunny. No Freedom Generator will be successful if you only invest in bonds or if you only invest in shares. A diversified portfolio supports your path to Financial Freedom when the market is both risky and stable. So don’t expose yourself to unnecessary risk by focusing on just one type of investment.
Your Freedom Generator Should Be Boring
Ups and downs in your Freedom Generator are unavoidable. But overall your Freedom Generator should actually be pretty boring if it’s properly balanced. The value of your investments isn’t what’s most important (remember it’s Cash Flow, not net worth!) to your Financial Freedom. Focus on investments that provide regular income. You’ll have the Freedom to follow your passions no matter what the market looks like.
Taking a yin and yang approach to your finances helps you build a balanced, stable Freedom Generator that protects your financial health and provides you with consistent income. And having consistency and balance in your investments puts you in control of your Freedom and choices!
image credit: Bigstock/mike mols
Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.