Several years ago, regular reader and guest author Vagabond MD wowed us with the fact that he happily sat on a half a million dollars in cash.
It is personal finance dogma to maintain a liquid (i.e. cash) emergency fund which would be expected to cover three to six months of living expenses in the event of job loss.
When you do not need or want to take risk, it has a way of piling up, especially if you are still working and not spending or investing all money that is inbound.
We had countless friends in “good, stable jobs” that lost these “good, stable jobs” and witnessed the financial and personal carnage that this wrought upon them.
It is very likely that when there is another financial upheaval, some of the other assets that you own will lose their value and or their liquidity.
The gist is that if you have enough saved to live in retirement, reduce the risk you take with your portfolio, especially later in life and as you approach retirement.
Interest rates are likely rising in the next few years, after a prolonged period at historic lows.
If our equity investments continue to increase in value in the next few years, we are on track. If the stock market takes a dive between now and then, we are still on track.