In the world of investing, there is a crucial decision often before us: when the investments we hold have accumulated unrealized profits that can change our lives, how should we decide?
Taking my personal career as an example, in my early days, I was always hesitant when faced with the opportunity to take profits, and every hesitation ultimately turned into deep regret. It was only later that I understood that when profits reach a life-changing level, the choice to sell means far more than just money; it signifies a permanent improvement in the lives of you and those around you.
Many people often fall into the trap of waiting for the best selling opportunity, fantasizing that if they just hold on a little longer, they can reap more profits. In reality, the so-called best time is mostly an illusion. Successful traders do not stand out because they precisely grasp every market peak, but rather because they consistently profit and maintain liquidity. They understand that liquidating assets is key to surviving in this investment game.
In investing, we also need to overcome the fear of missing out (FOMO). When our positions perform well, letting them go can indeed feel difficult, but choosing to hold due to FOMO may come at a higher long-term cost. Remember, opportunities are always present; maintaining such a mindset can help us be more composed when faced with sell decisions.
So, how much is enough to retire? The media often promotes astronomical figures for retirement, but for most people, 1 to 2 million dollars may be an ideal choice. From a traditional finance (TradFi) perspective, the average retirement account balance for those aged 65 and over in 2022 was only 232,710 dollars; in contrast, having 1 to 2 million dollars in savings is undoubtedly quite considerable. Although many wish to retire before the age of 65, and Americans generally believe that 1.46 million dollars is needed for a comfortable retirement, this is just an average; individual needs vary significantly due to lifestyle differences.
According to the 4% rule, if one has 2 million dollars, they can withdraw 80,000 dollars per year, which is enough to support a comfortable retirement for many. Furthermore, the choice of residence after retirement can also significantly impact the use of wealth. A retirement fund of 1 million dollars may feel stretched in New York City, but it can afford a luxurious lifestyle in a small town or abroad.
From a psychological perspective, having 1 to 2 million dollars in savings can significantly alleviate financial pressure, allowing us to truly enjoy the beauty of retirement life.
In summary, whether 1 to 2 million dollars is enough for retirement ultimately depends on individual circumstances. For most people, this is not just ample funds, but even exceeds our expectations. The key is to start saving early, plan expenditures wisely, and focus on things that truly add joy to life. After all, the quality of retirement life depends not just on the amount of money, but on our ability to create the lifestyle we desire, regardless of whether the figures in our bank account reach millions.
When we properly position funds that will change our lives, such as depositing them in a bank or investing in real estate, our mindset will be more relaxed when we participate in the market again. This does not mean that making money becomes easier, but rather that we can make decisions in a more composed manner, allowing investment opportunities to come to us. Even in the event of investment losses, having a solid wealth foundation as a safeguard means we won't lose everything. As Fiskantes said, 'The real fun starts here.' Although some people work better under high pressure, for most, a relaxed mindset is often more conducive to making wise investment decisions, making the investment journey more stable and enjoyable.