When it comes to investments, many people wonder where to start and how to build a strong portfolio. Ryan King, Director of Three Kings Wealth Management, shares a practical and strategic approach. He consistently advises clients on the importance of combining diversified assets with leveraging their personal skill set.
This blog explores Ryan’s philosophy on portfolio building. It offers insights into creating a tailored investment strategy. This strategy aligns with your strengths and financial goals.
The Importance of Diversification
Diversified assets are the foundation of any secure and sustainable portfolio. They offer long-term stability and reduce risk by spreading investments across various asset classes, like property, shares, bonds, and superannuation. Diversification ensures that no single investment dominates your financial future, giving you peace of mind and steady growth.
Yet, Ryan’s approach goes beyond just diversification. While this forms a crucial part of your portfolio, the strategy should also leverage your unique skill set.
Leveraging Your Skill Set for Growth
Your skill set can be the most powerful tool in your financial arsenal. Whether you’re a builder, chef, or entrepreneur, using what you already excel at can accelerate wealth creation. Ryan suggests splitting a portfolio evenly. Half should be diversified assets. The other half should be focused on areas where your skill set adds value.
Examples of Skill-Driven Investments
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- Tradies and Builders: If you have skill in property or construction, consider starting with real estate investments. Renovating, flipping, or developing properties can offer high returns with relatively lower costs due to your industry knowledge.
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- Business Owners: Entrepreneurs with business acumen should focus on building or investing in businesses. Whether starting your own or partnering in ventures, your skills can drive profitability.
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- Creative Professionals: If you’re skilled in interior design, concentrate on properties where your creativity can shine. Also, if you have a knack for Airbnb management, focus on these properties. This approach not only generates income but also helps you refine your skill.
Where to Start: Skill Set vs. Diversification
The starting point depends on your current knowledge and strengths:
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- If you have a skill set: Start by building your portfolio around that expertise. For instance, a builder will invest in property, while a chef will focus on restaurant ventures. Once profitable, reinvest the gains into diversified assets for stability.
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- If you don’t have a skill set yet: Start with a diversified portfolio. This allows you to explore different markets while building your financial foundation. Over time, you discover an area of interest or expertise to pivot into.
The Five-Step Growth Plan
Ryan outlines a five-step growth strategy that applies to all types of investments and businesses:
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- Create: Build the foundation of your portfolio by focusing on what you’re good at or starting with diversified assets.
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- Manage: Monitor and manage your investments to ensure they align with your goals.
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- Grow: Reinvest profits to scale your portfolio over time.
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- Diversify: Spread your investments to reduce risk and secure long-term stability.
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- Enjoy: Reap the rewards of your hard work and planning, enjoying financial freedom and security.
Practical Examples from Three Kings Clients
Many clients at Three Kings Wealth Management have found success by integrating this strategy into their financial plans:
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- Property Enthusiasts: Clients who started with property investments discovered they enjoyed interior design and renovation. This passion led them to profitable Airbnb ventures, which now form the core of their portfolios.
- Entrepreneurs: Business owners used their skill to invest in or grow their ventures. Once profitable, they diversified into shares and maximised their superannuation.
These stories highlight the importance of aligning investments with your strengths while maintaining a balanced portfolio. Visit our Google reviews and follow our Instagram page for more client success stories
The Role of Diversified Assets
While leveraging your skill set is crucial, a diversified portfolio remains the backbone of financial stability. Diversified assets offer steady growth, lower risk, and act as a safety net during market fluctuations. Here’s how each asset type contributes to a well-rounded portfolio:
Shares: Shares are ideal for liquidity in longer-term investment time frames. They offer opportunities for growth, income, tax advantages, and flexibility when draw downs are required. This makes them an essential part for balancing risk and reward while maintaining accessibility.
Bonds and Annuities: Bonds and annuities are often misunderstood. They should not be confused with insurance or investment bonds, which are merely structures that can hold these assets. Bonds and annuities are excellent for low-risk income generation. They provide stability and guarantees, making them suitable for financial goals that require lower risk and more certainty.
Property (Direct and Listed): Property investments, whether direct or through listed avenues, excel in leveraging growth and forced savings. They lack liquidity. Properties are less suitable for scenarios requiring direct income yield or draw downs. Nonetheless, property remains a powerful asset class for wealth accumulation and long-term financial planning.
What Happens When You Don’t Diversify?
Ryan emphasises that focusing solely on one type of investment increases risk. By reinvesting profits from skill-driven ventures into diversified assets, you guarantee financial stability even when markets fluctuate.
Key Takeaways
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- Start With What You Know: Your skill set can offer a faster, more profitable start to building your portfolio.
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- Diversify for Stability: Use profits to build a balanced portfolio with shares, bonds, and other assets.
- Reassess Regularly: Continuously evaluate your portfolio to align with your financial goals and life changes.
FAQs About Portfolio Building
1. Why is diversification important?
Diversification spreads risk across different asset classes, ensuring long-term stability and protection against market volatility.
2. What if I don’t have a skill set?
Start with a diversified portfolio to build your financial foundation. Over time, explore areas where you develop skill.
3. How can I balance skill-driven investments with diversification?
Assign profits from your skill-based ventures into diversified assets to create a well-rounded portfolio.
Conclusion: Build Your Portfolio with Three Kings
Building a portfolio isn’t just about making money—it’s about aligning investments with your strengths while ensuring long-term security. At Three Kings Wealth Management, we specialise in helping clients tailor strategies that leverage their skills and diversify for stability.
Ready to take control of your financial future? Book a Discovery Meeting with us today to explore personalised strategies tailored to your financial goals.
What You’ll Gain:
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- A clear understanding of your current financial position.
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- Customised scenarios to balance short-term ambitions and long-term stability.
- Actionable insights to take your financial planning to the next level.
Click Here to Book Now! Your financial future is waiting—let’s build it together.
