If you’re looking at your investments right now and feel a pit in your stomach—a creeping anxiety settling in your chest—I suspect the issue isn’t the market.
It’s your asset allocation.
You’ve got it all wrong.
No, it’s not a problem of equities. You, of course, have followed the simple path to wealth. Or the Bogleheads’ three-fund portfolio. Or the golden butterfly. Or, basically, whatever catchphrase signifies some mix of broad category diversification.
You may be one of those forward-thinking investors who’s incorporated some type of premium tilt. Small-cap. Value. Whatever floats your boat. Maybe you spend hours on forums debating whether your foreign equity allocation is too heavy—or too light.
There will be many for, and many against.
It’s not your bonds, either. You might believe in the 70/30 portfolio. Or 60/40. Or you may have done the math—100 minus your age. Or even pushed it to 110.
Your bonds might span all types—high quality, a little junk, some international exposure. Or maybe not. The permutations are endless.
Alternative investments? That’s not your problem. I can hear the crypto bros echoing through some of your allocations. Then there are those who swear by gold bars, or ETFs, or whatever vehicle suits their precious metal fancy.
And let’s not forget the business owners and real estate magnates. You’ll preach about inefficient markets, sing the praises of tax advantages, and scoff at those who settle for market beta. You’ll grin at the thought of outperforming everyone else—of “winning” the game.
And still, your asset allocation is wrong.
It’s not your cash reserves. Six months. A year. Maybe three. All sitting in high-yield savings or money markets. I won’t fault you for that.
It’s not even your tax-class diversification. You toss around terms like “backdoor Roth” like they’re the secrets to life itself. As if your victorious duel with the IRS determines your financial enlightenment. The devil is in the tax brackets, you say.
No. Your real shortcomings have nothing to do with net worth, sequence of returns, or even dying with zero.
The problem is that your swelling asset values are masking glaring deficits:
Deficits in character
Deficits in meaning and purpose
Deficits in relationships and connection
Deficits in community
Far be it from me to tell you what to do with your money—but I’m going to do exactly that.
You should use your assets to address your deficits.
Your money should serve your time, your growth, your values. It should support deeper connections—with yourself, with others, with the things that truly matter.
I’m not talking rocket science here.
Use some of your excess to hire a housecleaner, so you can take a long walk or get lost in a good novel. Take that lunch with a friend who’s been struggling. Visit the family member you’ve been meaning to call. Volunteer with that organization that’s always tugged at your heart.
When was the last time you did something that lit you up?
An activity where you showed up as your best self?
Who did you meet when you showed up like that? What projects took flight? Whose life changed because of it?
What became of those projects?
Your greatest error in asset allocation isn’t about holding the wrong assets or not holding enough.
It’s that you’re not using those assets in service of your own happiness—or your family’s. Instead, you’re guarding them. Locking them away in a vault. Never to be used, only to be worshipped.
Let’s change that.
Let’s build a better kind of asset allocation.
Let’s learn to truly diversify—not just across markets, but across our lives. Let’s aim not just to die with zero dollars, but to die with zero deficits.
Let’s die with purpose. With identity. With connection.
Let’s die with zero…deficits.
Did you catch this week’s episode of Earn & Invest (Click to listen)?
The Purpose Code is Now Available!
