As longtime readers know, 99% of my investment portfolio is in real estate.
Yet my overriding mantra is: Diversification, diversification, diversification.
It is the key to success both with your investments and your lifestyle.
That’s why my real estate portfolio is very diversified.
It includes agricultural land, raw land, timber, rental properties (city and beach), commercial property, a real estate development, and even some cemetery plots… across a dozen countries and 10 currencies…
That diversification gives me cash flow (in multiple currencies) and allows me not to have to worry much about what’s going on at any given time in any one country. The economies of some places where I’m invested can be struggling, but I don’t have to care. It doesn’t affect my net worth in any real way.
This level of diversification also means important lifestyle upsides. The investment portfolio I’ve built over the past two decades allows for flexibility and creates options for my life that a stock portfolio could never provide.
If I need a quick vacation from day-to-day life, I can hop on a plane and visit one of my rental properties for a few days. Each one is in a place I enjoy spending time… and each place is very different from the others… meaning, again, options.
If safety becomes a concern wherever I happen to be, I can move to occupy another of my properties in another country.
If the world goes completely bonkers, I have at least four options for places where I have the personal infrastructure in place—for energy and food production, for example—to hunker down with my family and ride out the storm.
Some real estate investments I’ve made don’t fit into the options program—for example the cemetery plots I purchased in the U.K.
Although, if I don’t sell all of them, I guess I will have the option of being buried in one.
All of this speaks to a point I make often—which is that I recommend you invest in countries where you like to spend time. As much as possible, work toward an investment portfolio that doubles as a lifestyle strategy.
You don’t want to have to bug out to a place where you don’t actually want to be.
As you’re building your global real estate portfolio, you’ll often find multiple properties that could fit your investment goals… properties offering similar returns and exposing you to comparable risks.
To help break any ties you may come across when trying to determine how to allocate your available funds at any given time, take into consideration what new options a particular property investment could offer.
It could be as simple as a weekend getaway possibility or a place to vacation with your family. Or maybe it’s a potential for residency…
Of course, sometimes the decision can be made simply according to the numbers… which can be OK, too, of course, but, as much as possible, be on the lookout for options.
Having this as a priority agenda helps clarify and even simplify how you perceive the ever-changing global property investing landscape.
Lief Simon
