Money Master The Game: How To Have An Income For Life

Section 5  Upside without the downside: create a lifetime income plan

Chapter 5.1 Invincible, unsinkable, unconquerable: The All Seasons Strategy

Chapter 5.2 It’s time to thrive: Storm-proof returns and unrivalled results

Chapter 5.3 Freedom: Creating your lifetime income plan

Chapter 5.4 Time to win: Your income is the outcome

Chapter 5.5 Secrets of the Ultrawealthy (that you can use too!)

Wow! We still have three more sections to cover in the book Money Master the Game. This should have come last week, I apologise for the delay. The aim of this section is to show the reader how to create an income for life. Tony does this by first showing by the example of a well-researched, time-tested investment portfolio/strategy –the All-Seasons or All-weather investment strategy of Ray Dalio, how Governmental institutions, Wealthy clients and Educational institutions have made money through Ray.

Ray Dalio is the founder of Bridgewater associates, the #1 largest hedgefund in the world with assets under management of $160 billion. He advises governments, wealthy individuals and corporate institutions. There was a time that Bridgewater was not taking money from clients unless they had a net worth of at least $5 billion and an initial investment of $100 million. The portfolio strategy in this section is a mirror of what he uses for his clients.

He also made a simplified video on how the economy works to help the average citizen understand it. 

The All weather strategy puts about 40% in long term US bonds, 30% in stocks, 15% in intermediate US bonds, 7.5% in commodities and 7.5% in Gold.

And when a back testing of this All seasons portfolio was done against the S&P over a 75-year history period (1939-2013), the S&P lost money 18 times, had the largest single loss of -43.3% with an average loss of -11.4%, while the All weather lost money just 10 times with the largest single loss being -3.93% and an average loss of -1.63%.

Annuities as a source of income for life

The section also talks about creating a lifetime income through annuities. In fact, the website www.lifetimeincome.com was created by Tony to help readers get help on setting up a suitable annuity.

There are Immediate annuities, and Deferred annuities. The deferred annuities are of three major types;

1) Fixed annuity:  You get a fixed, guaranteed rate of return every year for life, but at that set rate of return.

2) Indexed annuity: Your rate of return is tied to the Index fund/stock market returns.

3) Hybrid ‘indexed’ annuity: a mix of an indexed annuity and a ‘lifetime income’ rider.

An annuity is a form of life insurance that you can take out before you die. It is as powerful and safe as the insurance company issuing it. The rich use tax-exempt, special life insurance plans to invest/keep their money safe and protected from losses or even the government, in developed world where the taxes can be very high.

Final thoughts

This section teaches a lot about how the rich get an income for life. For you to also become (or behave like) the rich, you have to start by earning from one source of income. Then save enough in order to find opportunities to invest and earn multiple streams of income.

The rich have multiple income streams. There is nothing that stops you too from being called rich. However, start today, start with one.

See you at the very top.