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The 3 Bucket Approach To Investing

composition of calculator with paper money and notebook with pen


Today, I want to encourage you to be wise with your money.

Proverbs 21:20 gives us the following advice …

“The wise man saves for the future but the foolish man spends whatever he gets.”

If you spend everything you earn, you will never build up your wealth portfolio. Be wise and invest part of your income in order to build towards financial freedom.

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Today we are going to look at THE 3 BUCKET APPROACH TO INVESTING:

Sir John Templeton, a well-known philanthropist, and highly respected investor, became wealthy by pioneering the use of globally diversified mutual funds (i.e. Unit Trusts), and he came up with a strategy known as the “THREE BUCKET” ASSET ALLOCATION STRATEGY…

Sir John Templeton suggested that you should ….

  1. Decide what percentage of your income you want (or can afford) to invest,
  2. Then allocate your savings and investment into 3 buckets …
  • Bucket 1 – to provide safety and cover your needs,
  • Bucket 2 – to grow funds to meet your future objectives, &
  • Bucket 3 – to help you achieve your future dreams

Sir John Templeton’s 3 buckets consist of…


He suggests that you should consider diversifying your investment savings between the various buckets, in line with your needs and goals.

By determining your asset allocation in advance and sticking to your plan, you will avoid the temptation of spur-of-the-moment decisions.

So let us look at the 3 BUCKET APPROACH TO INVESTING…

  • This is where you save up money to secure your future
  • Your first investments MUST be put into this bucket.

The funds you put into your SECURITY BUCKET can include:

  • CASH – A contingency fund where you can build up a reserve to fund unforeseen emergencies that may arise from time to time. You may for example want to build up 3-6 months of back-up income to provide cash flow security. (A bank savings account will be an appropriate investment vehicle to take care of this need.)
  • HOME
  • INCOME INVESTMENTS (Eg. If you are retired, you need to secure your income needs)

AIM: The funds that you place into your SECURITY BUCKET should remain invested. You should allow all profits to be reinvested.

  • This bucket is to grow funds and create wealth over various terms.

The funds you put into your GROWTH BUCKET can include:

  • RETIREMENT SAVINGS (A Retirement Plan or long term investment is ideal to build up your nest egg to cover your golden years)

AIM: Every time an investment in your GROWTH BUCKET matures, you should reinvest as follows …

  •  of the profits in your security bucket,
  •  in your growth bucket, and
  •  in your dream bucket

This bucket is to create an opportunity fund to help you achieve your dreams

The funds you put into your DREAM BUCKET can include:

  • Investments set aside to fund your WANTS, DREAMS & DESIRES
  • Investments set aside to fund DREAM HOLIDAYS
  • Investments set aside to fund your DREAM OPPORTUNITIES (business or ministry or just funds available to be a BLESSING to others)

AIM: This bucket is to REWARD your family and yourself for taking a disciplined approach of building towards your financial freedom. The dream bucket is to help you build towards your dreams and making them come true.



  1. How much do you have AVAILABLE TO INVEST? (Maybe you need to review your budget and make space in order to prioritize your investing goals.)
  2. How much are you going to invest in your SECURITY BUCKET?  
  3. How much are you going to invest in your GROWTH BUCKET?  
  4. How much are you going to invest in your DREAM BUCKET?  
  • It is always important to first allocate savings to build up your SECURITY BUCKET, in order to cover your needs before you focus on your wants. The SECURITY BUCKET will help you build up financial protection.
  • Once you have allocated funds towards your SECURITY BUCKET, you can now begin allocating funds towards your GROWTH BUCKET, thereby building up growth investments over time.
  • Once you have allocated funds towards your GROWTH BUCKET, you can allocate funds towards your DREAM BUCKET, thereby building up funds to help you achieve your dreams and desires.
  • I suggest that you automate your investment decision, by setting up a debit order to come off your bank account, directly into your allocated investment “bucket”. This will make it easy for you to stick to your plan.

“Good planning and hard work lead to prosperity, but hasty shortcuts lead to poverty.” (Proverbs 21:5)

I want to encourage you to invest part of your hard earned money, so that you can build towards FINANCIAL FREEDOM. I must add that when investing it is very important to get advice.

Why now consider making use of THE 3 BUCKET APPROACH TO INVESTING?

I want to encourage you to re-examine our priorities:

  • Put God 1st,
  • Then pay yourself next, by saving and investing part of your hard earned money, &
  • Live on what is left over.

I want to encourage you to make the right choices…

  • Dare to dream – Aim high and reach for the sky! If you miss the sky, you will still hit the stars!
  • Develop a plan – You can set up a plan for your (and your family’s) future.
  • Get determined – It is time for action!

With a dream, a plan and a little discipline, you can build towards FINANCIAL FREEDOM.  


If you do not start investing before age 45, you will need to save 3 times as much as if you start investing at age 25.

Don’t delay your investing decisions. Start early. Automate it. Allow compound interest and growth to work for you over the long term.


“Someone is sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffet


“Wealth from get-rich-quick schemes quickly disappears; wealth from hard work grows.” (Proverbs 11:13)

“He who gathers money little by little makes it grow.” (Proverbs 13:11)

It is good to invest in your future, but there is so much more to life than money. Have you invested in your eternity?

God saw that we were separated from him so he sent His Son, Jesus, to pay the price for you and me on the cross, so that we can come into a relationship with Him. You can start a walk with God, not because of what you do, but because of what Jesus did. This relationship ensures that you and I do not need to face life alone, and this relationship continues into eternity.

If you do not know Jesus as your Savior, why not invite Jesus to be your Lord and Savior? Give Him your life, along with your burdens and concerns.

Have you accepted Jesus as your Lord and Savior? If you want to start or restart your walk with God, click here to pray a simple prayer we have set up for you.

“For God so loved the world that he gave his one and only Son, that whoever believes in him shall not perish but have eternal life.” (John 3:16)

The three bucket approach to investing involves sacrifice.


Father, thank you for making a way for me. Thank you for sending Jesus to rescue me. Jesus, I ask you to be my Savior. Thank you for the price you paid on the cross for me so that I can be set free and live under the shelter of your protection, not only during my temporary life on earth, but right into eternity. Today I put my life in your hands and thank you that you are my God. Please help me to make good choices and to follow through. I ask for your wisdom. Today I put my hope in you. I ask this in Jesus’ name. Amen.


I challenge you put your life in God’s hands and live to please him. And please do not forget to start building up your wealth portfolio. You can consider the 3 bucket approach to investing. 

God bless you.

If you found this blog post helpful and encouraging, please leave a like and drop us a comment. Join us by subscribing! We would greatly appreciate your input and support!

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