Hi All,

Most of you probably know what diversification is, thats when you spread your investments across various asset classes, across various industries and types of stocks. The main idea behind diversification is that large scale statistical processes allow you to efficiently maximize your return while limiting your risk (1).

Ignore diversification. Its great if you want to buy mutual funds and let them ride, but it makes less sense if you’re serious about building wealth. If you don’t believe me, take from Warren Buffet

“Diversification is protection against ignorance. It makes very little sense for those who know what they’re doing“.

– Buffet quoted in “The Warren Buffet Way”.

Instead, I would reccomend getting informed, taking calculated risks and focusing your wealth building activities. Most people who are serious about money do this.

Best,

James

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1) Collaborate: Meet regularly to talk about money, set goals together, track and monitor them.

2) Understand and respect your partner. Take time to understand your partners values about money.

3) Watch the numbers. Get a budget, monitor your spending and track your net worth.

4) Max your retirement. Maximize contributions to your tax deferred retirement accounts.

5) Invest in stock. Stocks perform better than bonds or cash.

6) Avoid high interest debt. Credit cards and title loans are financial cancer.

7) Diversify. Don't put all your eggs in one basket.

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