As the theme of our site is compounding gains over time, we do not recommend an overly aggressive allocation to the riskiest plays. We take a balanced approach with most of your money in tier 1 and 2. Over time we expect to have a tier 2 heavy portfolio with tier 1 making up less and less of your portfolio % wise as your gains start to compound and you put more to work in the other tiers.
Lets say you have a 100k portfolio to work with. Over time we would expect this to be 30k in tier 1, 60k in tier 2, and 10k in tier 3. If you have a different allocation, your mileage may vary.
Tracking Spreadsheet Template
Tier 1 – Safe money
30-45% of your total portfolio.
This portfolio allocation should be around the equivalent of 50% of your emergency fund. If that is 3 months or 6 months of cash that you rely on. As you collect interest, you can move it into tier 2. This tier uses mainly stable coins so there is very little volatility any easy to track in fiat terms. This is making up to ~12%
Tier 2 – Excess of Safe Money
45-60% of your portfolio
This is money that you could have tied up for an extended time that you wouldn’t need to access immediately. This could be money that you would have invested in real estate or put into a standard investment account. Investments in this category are making 12-30% which approximate returns you could expect in those type of investments. The underlying assets we are comfortable holding for the long term like BTC, ETH, and other tokens for blockchains. You need to feel comfortable with a 50% drop in fiat terms on these assets. We look at long-term plays and interest is paid in the same asset. When you have money invested across all tiers, this will be the largest portion of your portfolio allocation. Once this tier is equal to your tier 1 allocation, the excess should be put to work in tier 3.
Tier 3 – High Risk Money
10% of your portfolio
This is throw away type of money that you can loose and not lose sleep at night. This should not exceed 10% of your portfolio. You should never commit more than 1% of your portfolio on each opportunity.