How the Barbell Investment Strategy Works

September 16, 2020 1 min read

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Financial advisor Jeff Rose talks about the barbell investing strategy, an investment strategy that forgoes stocks and bonds and prioritizes risk-averse investments (cash) and high-risk investments. 

Rose discusses the key principles of the barbell investing strategy, namely:

1. Cash is always king (one side of the barbell). Access to money from risk-averse investments such as a savings account gives you the flexibility to pursue the right high-risk investments when they present themselves.

2. Have the right and proper amount of insurance. Get the insurance you need — life, health, home, auto, business, etc. — and build up from there.

3. Limit your investments in stocks and bonds (the barbell’s “middle”). Invest no more than 10 percent of your money in traditional stocks, bonds and commodities, considering these investments as fun. 

4. Focus on high-risk, high-return investments (the other side of the barbell). These include cryptocurrency, startups and your own business. Aim for ten-to-twenty percent exposure. You can make as much as four-to-100 times your investment, growing $10K to $1,000,000. 

Related: 7 Ways to Double Your Money (Fast)