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Why Practice Diversification

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Diversify, diversify, diversify. If it’s important, you should probably diversify it. Obviously, you don’t need two cars, but you do want to avoid single points of failure like only owning fiat wealth. Let’s break down what I mean.

Diversification is defined as a risk management strategy that mixes a wide variety of investments within a portfolio. Diversification should help you mitigate risk in whatever it applies to but mainly focuses on your finances. It shouldn’t necessarily cost you anything extra but will take more time to understand and operate. While it usually applies to investing, I think you can take it further applying it to where you trade assets, where you store them, and much more.

 

I don’t even touch on this in the video, but another aspect where I’ve diversified a great deal is on my social media. I’m actively using around 25 platforms in order to diversify my content distribution and to provide redundancy for my content if I were banned elsewhere. I guess in many ways diversification can act as a means of redundancy for you, but I’m sure not many people would look at it that way. And by redundancy I don’t mean pointless, I mean having backups and access to whatever it is. So in this case, my content has a lot of redundancy by existing in many places and it’s the exact same content.

 

While the many platforms I post on are how I’ve diversified my distribution to cover all venues which mitigates my risks. So this way the channels themselves are the diversified approach to my social media. For example, you could put all your energy into having the best Twitter channel ever, but then if Twitter bans you, you are done. Even if you back up all your tweets (redundancy), you still have no platform because you didn’t diversify your content distribution onto multiple platforms ensuring that losing any single platform has a much smaller impact on your overall social presence. Wealth would be treated the same.

 

Diversify who you consume news from, diversify the places you go to learn from, and the ways you learn. You can apply this to anything and it won't hinder you. It will only give you more information and help you see the bigger picture.

 

So for example, having two bank accounts generally won’t cost you more if you have the minimum balance, but it allows you to avoid issues that may occur with one of the banks. I would further suggest that you have money in both a small local bank and a larger bank with better online features etc. This will hedge against political and financial threats. While most people don’t consider ever losing their bank account, it happens a lot more than you might expect. And those people who may have been using Paypal and other payment gateways as a solution could and have been further financially cut off. A good example of this is sex workers being cut off from Paypal. To diversify your finances and protect your financial independence, you can use cryptocurrency.

 

Say your stock trading account is attached to your bank account so then you may want to trade on more than one exchange. Say you are investing in gold, whatever kind of gold you acquire given it’s bought from a legitimate source, it’s fine. However, where you store it is where you should really worry about diversification. If you store it only with the bank, you may run into the same issue explained above. If you only store it at your house, you could get robbed and now you’ll need better home security, etc. You can diversify a bit or you can get really in-depth with it to the point where you are spending more money to do so. Though I would say that having home security is something you should have anyway. The point really is that you are mitigating against any risks that may come your way to ensure that if something does happen, only a small portion of your wealth is affected by it.

 

In regard to cryptocurrency, when I’m lending crypto, I want to test out different lending platforms as well as I don’t have any expressed loyalty or trust in any of them solely. Even if you’re not worried about risk, this still exposes me to the benefits and drawbacks of 3 platforms I use giving me more access and experience with the full range of what is available to me. Diversification isn’t always just as a way to mitigate risk, but a way to expose you to more assets which can introduce different risks, but the idea again is your also getting to reap the benefits of each as well.

 

How diversified is too diversified? How far do you go to diversify your wealth? How do you diversify outside of finance? Let me know all of your thoughts on this in the comments below and don’t forget to like, share, and subscribe.

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Wow article

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1 year ago

great.please subscribe to my acct

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1 year ago

Diversification is soul concept of Portfolio management based on maxim " Never put your all eggs in a single basket ".

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1 year ago

Exactly! Spot on :)

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User's avatar scottcbusiness
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1 year ago

hi

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1 year ago

Your are doing hard work. It's really to manage the 25 platforms .Hope you not get banned .Have a nice day and wonderful life.

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1 year ago

Haha thanks mate!

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1 year ago

Diversification comes with a good and bad outcomes. You need some guts to take risk, Thanks for Sharing Bro really informative and helpful

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1 year ago

Sure, but no reason to have unnecessary risk. What's the bad outcome of diversifying?

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1 year ago

Diversifiy strives to smooth out unsystematic risk events in a portfolio, so the positive performance of some investments neutralizes the negative performance of others. The benefits of diversification hold only if the securities in the portfolio are not perfectly correlated that is, they respond differently, often in opposing ways, to market influences.

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1 year ago

For sure, only diversify into good assets, not randomly

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User's avatar scottcbusiness
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1 year ago

Deversification comes in idea that makes Good thing . This is Good article thanks for sharing this. I always watch on your Yt channel too.

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1 year ago

Good Article

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1 year ago

Nice and interesting

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1 year ago

Subscribe done sir...please subscribe me,sir

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1 year ago

I practice diversification too, but not always

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1 year ago

Plz sub my account sir

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1 year ago

I already subscribed you.Please SUBSCRIBE BACK me. I need also SPONSOR.please sponsor me.

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1 year ago

wow article

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1 year ago

Great article

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1 year ago

Wow 😧

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1 year ago

Nice article

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1 year ago

Diversification is indeed the way to go. Let me narrate my personal experience with my Bank. Initially I stuck with only one bank utilizing it for all my transactions online and offline but at some point I started having issues with online transactions like failed transactions with lengthy periods for dispute resolution which wasn't initially the case. Thereafter I opted to reactivate one of my dormant accounts with another Bank. With the reactivated account this far I haven't experienced any issues with online transactions and failed transactions are promptly resolved. So what I do now is to use the former bank for offline transactions while the latter is solely for online transactions.

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User's avatar M3i
1 year ago

A perfect example as to why this is important. Thank you for sharing your story

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1 year ago

nice article sir please support me

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1 year ago

nice article sir.

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1 year ago

Nice words sir... I appreciate

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1 year ago

Greetings very true and useful is this information when I started working online I tried to focus my funds on a few platforms that I thought were safe and in the end they ended up becoming scams, then over time I began to diversify so when any platform failed I did not lose all my funds and I could recover from the loss or at least lessen it.

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1 year ago

nice articlle

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1 year ago

Nice article 👌

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1 year ago

Thank you for sharing your article

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1 year ago

Nice artical..thank you for sharing

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1 year ago

Diversion is an idea to be more productive and progressive on what business or profeesion you have, having that look to gain benefits and profit more.This is an informative article thanks @scottcbusiness

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1 year ago