I am into my 40s, and at this age, I know I am at my peak earning years for the next 10 years till 50 or so.
My biggest fear is inflation. Whatever I own, I need to at least allow my net worth to track inflation. For example, my $1m should be $1.04m next year. This also means the maximum I can use is my return above inflation. If my properties and shares and other investments earn me 5%, then I can only use 1%, else I will be eating into my capital...
Some young people will say it is ok, because in the long run, STI has been moving up 8%p.a. excluding 2% dividends, or REITS pay 6-9% dividends every year. Well, if you think it is ok, then you haven't really experienced the wonderful feeling of shaking in fear each day for months, when your stocks will falling 5-10% per day.
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