net worth allocation?

**disneysteve** · 07-09-2008, 05:51 PM

There is no easy answer to that question. It depends on factors such as your age, years until retirement, risk tolerance, whether or not you have a pension and more. I'm sure if you search around online at money.com and the Motley Fool site and other such places, you can find a variety of suggested allocations.

**Snave** · 07-09-2008, 06:52 PM

I am not sure there is a right answer. I know there is a wrong answer - all of your eggs in one basket. Other than that, I don't know. I would also bet that it changes with age significantly also. A higher % is allocated on my home than it will be in future years. I think this would be the case for a lot of people that are younger.

**LivingAlmostLarge** · 07-09-2008, 07:31 PM

It changes I think as you age. We had 3 years ago only home equity. Now it's only 50%, but where it will be? I have no idea.

**jIM_Ohio** · 07-10-2008, 09:47 AM

100% liquid assets. Be so rich that your house is less than 1% of your net worth.

**m3racer** · 07-10-2008, 03:42 PM

I just did a net search and surprisingly there wasn't much useful info.

**jIM_Ohio** · 07-10-2008, 03:54 PM

This would depend greatly on the person and their tools/resources at their disposal.

For example, for you or me to make a fortune at real estate, it would not be prudent- high start up costs (high as a percentage of net worth) and the profit we would make would be low (as a percent of net worth) because we are talking money in the thousands on both sides of that equation.

But you put in Donald Trump and a significant amount of his net worth (I am guessing) is in real estate. He can leverage a $200 million property or find $200 million in financing to make a $2 million or $20 million profit.

That might be a 1% or 10% return to Trump, but because of the magnitude of money he has access to, even a 1% return makes it worth it (maybe) for him. If you or I invested our own money and would accept a 1% return, we could do better at the local bank in absolute dollars.

My point is that to make your fortune you might go about it one way or another-

starting own business vs real estate vs investing vs working a second job and stashing the money in a savings account.

Each has it's assets/liabilities profile and an expected rate of return.
Once a person gets a given net worth, they might diversify more (to grow or maintain the net worth).

net worth allocation?