Helping you manage your finances better
Once we start thinking about our arrangements across these three pots the benefits quickly become evident.
As with all aspects of our life a sense of order helps us to stay in control. When we segment our money it helps us to manage it better and put it to better use.
Easier to prioritise
While we need a certain amount of money to provide for us daily, we shouldn’t neglect our longer-term needs or forget to enjoy ourselves. The three pots help us to assign our wealth according to our goals and our ability to fund them, and they help us keep track of all of our capital.
Life would be rather humdrum if we didn’t treat ourselves, or pursue goals and hobbies that are meaningful and fun. By recognising how we divide up our capital with the three pots, we have the freedom to fund more passions and thus reap greater rewards, whether financial or psychological.
At Netwealth we often emphasise that investors should pay attention to the factors they can control when investing. The three pot theory lends itself to efficient money management and, by clearly defining how our three pots are funded, and focusing on them as needed, we can take better care of our money and enjoy ourselves more.
Please remember that when investing your capital is at risk.