What is the three-pot method?
The three-pot method involves, as you might have guessed, splitting your money into three. You’ll have one pot for short-term goals – the cash you want to be accessible whenever you need it; one for the medium-term – home improvements, for example; and the final pot for long-term goals, such as saving for retirement.
Harry Donoghue, a chartered wealth manager at Tideway Wealth, said: “Money naturally moves from long-term to medium-term, and then to short-term as goals get closer.”
The level of risk, he adds, should then be adjusted with that.
“When used properly, the three-pot framework makes investing feel more manageable – and helps people grow their wealth with greater confidence,” he said.
What’s more, when short-term needs are covered, people also tend to feel more in control and are far less likely to make rash decisions when markets are volatile.
Get it right, and you could find that it transforms your finances. So where do you begin?
To read the full article, visit: The Telegraph.