May 27, 2024

Thrive Insider

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Portfolio Diversification May Help You Enjoy Greater Financial Independence and Financial Freedom

To be financially independent is to experience the joys and benefits of financial freedom—being able to allocate your wealth as you see fit while building a financial legacy to leave behind. Or as stated by Michael Reagan, son of President Ronald Reagan, “My father believed you could not be free without being financially free. Gold makes you financially free.”

Traditionally speaking, financial independence is defined as having enough passive income to cover all your day-to-day living expenses. Passive income may include stock dividends, high-yield savings accounts, and rental income. Excluded are usually all forms of income that depend on others—including employment income and any income generated from a business you are responsible for running day-to-day.

Building Financial Independence

There are many ways you can gradually build your financial independence and enjoy the financial freedom that comes with it. For example, U.S. Money Reserve, as America’s Gold Authority®, can help you diversify your portfolio with precious metals like gold and silver. These alternative assets can increase your exposure to an asset class beyond stocks and bonds. Such assets can be held as part of an overall wealth-building strategy. 

Since maintenance is less costly than replacement, it may be financially helpful to take good care of your belongings. The same applies to taking care of your health—and your finances. Setting life goals and sticking to a carefully planned budget, paying off loans and obligations quickly, and placing money in an interest-bearing account or building a portfolio early in life can all help facilitate long-term financial independence.

Generally speaking, you can be considered financially independent if you have at least 25 times your annual expenses in savings. With the right strategies—and depending on your unique financial situation—this status may be achievable, and there are numerous benefits to attaining financial independence. For example, financial independence can provide you with more security, less stress, and more control over your time. It can offer you the opportunity to pursue your passions or enjoy more leisure activities. With financial security, you may also be in a better position to explore other wealth-creating opportunities.

Building a Diversified Portfolio with U.S. Money Reserve

Today’s macroeconomy can be thought of as an extension of a village market. Actions and events in one part of the market invariably have an impact on other parts of the market. For example, market instability affecting producers can lead to fuel price increases, which in turn impact the prices of goods and services. This principle also applies to economic and political instability: Today’s government-implemented fiscal strategies impact inflation, while fuel prices are often affected by ongoing geopolitical conflicts.

Within this context, it may be detrimental to put all your wealth into one asset or asset class. Although some alternative asset classes, like cryptocurrency, have been known to generate high returns in the short term, the high level of risk associated with these types of assets may not be for everyone. Furthermore, inflation can eat away at the strength of your portfolio if you do not hedge against it through diversification. Imagine owning stock in only one, two, or even a small handful of companies that simultaneously experience a market downswing. Such an event could quickly wipe out any gains and severely affect your retirement plans.

This is why many financial experts recommend portfolio diversification. By allocating funds across different industries and asset classes, you may be able to reduce your overall risk exposure and not be unilaterally hit by a market-wide recession. Through U.S. Money Reserve, you can also explore the benefits of diversifying your portfolio with alternative assets like gold and silver. Precious metals have a long history of being a highly sought-after asset class that can potentially insulate your portfolio from the volatility exhibited by assets such as cryptocurrencies, stocks, and even real estate.

Whether you have been planning for and striving toward financial independence for a long time or are just getting started on your financial planning journey, U.S. Money Reserve can help you explore the benefits of holding gold, silver, or other precious metals and how they can fit into your overall diversification strategy. 

About U.S. Money Reserve, America’s Gold Authority®

U.S. Money Reserve is one of the nation’s largest private distributors of government-issued gold, silver, platinum, and palladium products.

Founded in 2001, U.S. Money Reserve has grown into one of the world’s largest private distributors of U.S. and foreign government–issued gold, silver, platinum, and palladium legal-tender products. Hundreds of thousands of clients across the country rely on U.S. Money Reserve to diversify their assets with physical precious metals, primarily in the form of legal-tender gold and silver coins and precious metals IRAs.

U.S. Money Reserve’s uniquely trained team includes coin research and numismatic professionals equipped with the market knowledge to find products for precious metals buyers at every level. U.S. Money Reserve goes above the industry standard to provide superior customer service, with the goal of establishing a long-term relationship with each and every one of its customers. U.S. Money Reserve is based in Austin, Texas. Like them on Facebook, connect on LinkedIn, and follow on Twitter.