Knowing that you have enough wealth. Staying in the game instead of taking excessive risks.

Knowing that you have enough wealth. Staying in the game instead of taking excessive risks. 1734195

There is a difference between a plan to  building up your wealth and there is another plan to staying wealthy. The key is to know how much is enough.

If you have $50k trying to build up to $500k to be ready for retirement or financial independence,  you tend to take more risks because you have a longer time horizon. You are probably 25 years old thinking  of having wealth to be independent at 50 years old. That’s 25 years old.

You could probably have a 70% equity versus 30% bond allocation. Stocks tend to be very volatile in that at certain points, the equity portion can go down 40-70%. That may be ok (if you have the stomach to take that!) if you are somewhere far from needing the wealth to provide cash flow for financial independence/retirement.

However, suppose you are at 48 years old.  A …

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