The Purpose Of The Moderate Bucket

Added: 2026-06-03

[00:00:00]The moderate bucket, your middle bucket, that one is focused on income.

[00:00:07]And if I'm focused on income, then I would normally have somewhere between 3 to 8 years of living expenses in this bucket.

[00:00:17]And if I have 3 to 8 years of living expenses, my goal with this bucket is to keep up with inflation. [music] So, if I'm keeping up with inflation, I can expect to be somewhere around that 3 to 5% [music] return.

[00:00:31]And so, this could be your TIPS, which is your Treasury Inflation-Protected Securities.

[00:00:37]This could be your bonds, where we're getting paid interest.

[00:00:40][music] And the way the bonds work is the same way that your your car payment or your mortgage, you [music] make a principal and interest payment. So, you pay them back the money you borrowed to buy that asset, and then you also pay them interest for borrowing their money.

[00:00:55]Bonds are the same way. We have the ability to loan our money to businesses or the government, and they take our money and they they fund something in the current environment. And they promise to pay you back with [music] interest going forward. This one where we're talking about A-rated investment-grade [music] bonds. We're not We're not investing in the companies that are giving you a 20% interest rate [music] because, just like in regular human credit, when someone has a high credit score, they're going to have a very low interest rate cuz they're not a high risk. But, at the same time, if someone has a very low credit score and they were able to get approved, then they're going to have the highest interest [music] rate possible. So, you chasing interest rate returns or yield on your bonds is not going to be the idea of my moderate bucket. I'm not trying to be very aggressive here. Free gift, [music] the Tax Smart Retirement Stage Assessment, it tells you which of the seven tax smart stages you're in and what to focus on. Take it at of cityofwisdom.com/assessment.

[00:01:56]And on the thank you page, if you'd like our team to look at your situation directly, >> [music] >> you can book a call.