With the consistent monthly income being generated from the site, I feel confident enough to take the next step up in the Investment Pyramid. Going up the investment pyramid helps me put my excessive cash balance to work in a more effective way.
If you haven’t seen this investment pyramid (see below), it is just a simple depiction of the risk-reward concept. The higher the risk one takes in an investment decision, the higher the potential return they can expect. From my perspective, the key to this pyramid is diversification. Make sure you understand how each investments interacts with each other and don’t forget your time horizon with each decision.
If you are a regular reader and have seen the balance sheet for the Money Tree, you will see that I have started at the foundation with #1. an Ally Savings account as a holding account and #2. Certificate of Deposit Ladder. Now I am onto the next step up this pyramid, understanding it will come with some more risk.
I am currently researching two different options for the next investment decision and those are centered on the Level 2 Income section of the pyramid. I am between a dividend exchange traded fund (ETF) or a preferred stock on a microcap company…Any thoughts?
I am a finance professional with over 20 years of experience and very passionate about all topics related to finance; enjoying the aspect of teaching and educating others along the way. All in all, I will show you how big this money tree can get over time as I get the branches (Earn, Save, Invest) as high as possible…Click here to see my financial progress to date: How high is the Money Tree?
