After doing my first free Empower financial professional review back in 2014, I decided to do another investment portfolio review with them. Given the portfolio review is free for anyone with over $100,000 in investable assets, and my financial situation has changed so dramatically since then, I figured, why not spend a little time uncovering potential optimization opportunities?

I also wanted to experience the process firsthand again, in case any of you want to take advantage of their free financial review as well. Overall, I found it to be a worthwhile and educational experience. You can sign up here if interested once you’ve opened up a free account and linked your assets.

For background, I’ve been using Empower’s free wealth management tools since the end of 2012. I even consulted with them part-time in their San Francisco office in 2013 and 2014. Finally, Financial Samurai is a long-time affiliate partner.

Empower’s Free Professional Review of My Retirement Portfolio

Once you sign up for a free Empower account and link at least $100,000 in investable assets, you can schedule a free financial review. The process includes two calls – a short discovery call, followed by a recommendations call.

The First Call: A 17-Minute Discovery Chat

After scheduling my appointment, an Empower professional called to verify my identity and gain a basic understanding of my financial situation, goals, and desires. Note: you must have linked at least $100,000 in investable assets to qualify for the call.

The conversation lasted about 17 minutes. I told him my age (48), my plan to start withdrawing from my rollover IRA after 60, and my goal of maintaining a comfortable retirement with about $60,000 a year in gross income/withdrawals, supplemented by Social Security.

I didn’t tell the Empower professional that I run Financial Samurai or that I’m a personal finance junkie. This way, things were more realistic for retirement to help more people.

For the purpose of the review, I only shared my rollover IRA with about $1.5 million. This was my 401(k) that I maxed out from 1999 to 2012 before leaving my job. I converted it to have more flexibility in my investments and reduce fees. Since the conversion, I haven’t contributed a single dollar.

I was curious to hear whether their recommendations were similar to how I invest my overall public investment portfolio.

The Second Call: A 40-Minute Recommendation Session

A week later, we had the follow-up phone call. I logged into my Empower dashboard where I linked my IRA so he could walk me through his recommendations via slides. No video or in-person meeting was needed, which was convenient.

Based on my $1.5 million in assets, he introduced Empower’s Private Client service, for those who have a minimum of $1 million in investable assets. As a Private Client, you get two dedicated advisors, priority access to their Investment Committee, retirement and wealth planning specialists, and even private equity investment options.

My Rollover IRA’s Current Asset Allocation

The next slide broke down my IRA allocation. I learned that 99.6% of my holdings are in U.S. assets, complete home-country bias. About 97.5% is in U.S. stocks, with the rest in cash, alternatives, international stocks, and bonds. I thought I was 99.9% in stocks.

Sector-wise:

• 34.4% in Communication Services (Google, Meta, Netflix)
• 35.2% in Tech (mostly Apple)
• 12.2% in Consumer Discretionary
• 5.5% in Financials
• 3.9% in Health Care
• 3.7% in Industrials
• 2.1% in Consumer Staples

In my mind, I just lump Google, Meta, and Netflix into “Tech,” but technically they’re Communication Services. So, my IRA is roughly 70% tech-heavy, a concentration I’m comfortable with given my outlook.

Personal Strategy Allocation Recommended By Empower

Empower recommended a portfolio of:

• 75.6% Stocks
• 10.1% Alternatives
• 13.6% Bonds

Within stocks:

• 69.9% U.S.
• 21.8% Developed International
• 8.3% Emerging Markets

Although I worked in international equities for 13 years, I’ve avoided them for years due to corporate governance concerns and political risks. Except for Taiwan Semiconductor (Ticker: TSM), I’ve stayed U.S.-focused. Fortunately, that worked out well. U.S. stocks have outperformed for over a decade (though 2025 has been a rare year of international outperformance).

Within Alternatives, about 64% was in real estate (including foreign real estate), which caught my eye since ~40% of my overall net worth is already in real estate. I didn’t ask which foreign markets they meant. Worth asking if you take the review.

A 20.9% gold allocation would’ve been nice, given gold’s record 2025 performance.

At only 13.6%, the bond allocation seemed light for someone retiring in 12 years. However, if you view real estate as bonds-plus type of investment, the overall portfolio roughly resembles a 75/25 stocks/bonds mix, which feels right for someone in my position. That’s about my allocation in my taxable accounts too, so Empower’s recommendation made sense.

Smart Weighting: Empower’s Core Strategy

Empower’s Smart Weighting strategy has been around since my consulting days there. It’s their proprietary method of constructing portfolios by evenly weighting across style, size, and sector, instead of following a market-cap index dominated by the biggest names.

The idea: diversify away from bubbles and reduce concentration risk. You end up with a more balanced portfolio that doesn’t lean too heavily on a single sector like tech.

Smart Weighting is a rational, disciplined approach. However, I’m based in San Francisco and am a strong believer in tech, so I’m fine staying overweight. Still, if this were my only portfolio at age 48, having 70% in one sector would be considered excessive.

For instance, my IRA fell from $1,115,000 to $827,000 in 2022, a 26% drop. That’s nearly five years of living expenses gone in one year, if my $60,000 annual living expenses are true. If the exuberance of 1999 is truly back, my tech-heavy portfolio could easily lose 40% of its value during the next bear market.

Therefore, getting a professional review of your investments might be more important than ever.

Smart Weighting May Outperform The S&P 500 During Difficult Times

This below chart tries to emphasize how Smart Weighting outperformed the S&P 500 during two difficult time spans (12/31/1999 – 12/31/04 and 12/31/07 to 12/31/12). However, in a raging bull market, Smart Weighting would underperform given Empower would sell your winners in order to maintain their target weightings.

The closer you are to traditional retirement and the more cautious you are about the stock market, the more Smart Weighting makes sense. Personally, I think the ideal return scenario in retirement is slow and steady returns. I do not like to see more than a 10% downward swing in my net worth in a year, which is why my net worth is so diversified.

On your call with the Empower professional, ask:

• What is the drift threshold (%) per sector / style / size that triggers a rebalancing trade in Smart Weighting?
• How do you balance tax consequences vs. drift correction (especially in taxable accounts)?
• Is there a grace band or “buffer zone” to prevent constant churning?

Holistic Financial Planning

Of course, for most people, a retirement portfolio like an IRA is just one piece of the financial puzzle. Nor is optimizing it the only goal. The slide below shows how Empower can help with broader savings and withdrawal strategies, an area even the most disciplined FIRE enthusiasts often struggle with. Having professional guidance here can make a meaningful difference.

Determining how much to save for your children’s education is another big challenge, especially given the relentless rise in college costs and the uncertain impact of AI on future careers. I’ve explored this in detail in my post on 529 plan savings amounts by age and whether or not to superfund the 529.

For those working in tech with a large portion of compensation tied to stock options, consulting with an advisor on tax-efficient selling strategies can be invaluable. Proper timing and diversification can help reduce tax drag and lower overall portfolio risk.

Estate Planning Is Important But Often Neglected

Finally, estate and legacy planning may be the most overlooked yet essential area of financial management. Most of us don’t like thinking too far ahead, let alone contemplating our own mortality. But having an estate planning specialist walk you through different scenarios can help you minimize estate taxes and ensure your wealth is distributed as intended.

If you’re fortunate enough to die with an estate worth more than the federal estate tax threshold (set to return to around $15 million per person in 2026), you’ll want to plan carefully to reduce the 40% estate tax on every dollar above that limit. One way is through an irrevocable life insurance trust.

Being able to talk to an Empower estate planning professional as part of its service is a big value add.

A Retirement Forecast

Finally, we wrapped up the call by reviewing what my retirement could look like starting at age 60, just 12 years from now, if I followed Empower’s recommendations. You can model similar scenarios yourself using their free wealth management tools by adjusting your own input assumptions.

In general, you want to target at least a 90% probability that your portfolio will support your retirement goals. Ideally, you aim for 99% to build in an extra cushion for unexpected events or lower-than-expected returns.

Based on my assumptions – spending $60,000 a year, receiving $37,416 annually in Social Security, and having ~$1,500,000 in my IRA invested per Empower’s recommendations – I’m comfortably on track.

In fact, if I live to age 92, the projection shows I’d pass away with nearly $4 million left over. This result, ending up wealthier in death than at retirement, is actually quite common when following the 4% safe withdrawal rule.

That’s why, once you officially retire, it’s well worth conducting a detailed financial analysis of your situation and running multiple withdrawal rate scenarios. Doing so can help ensure you strike the right balance between living well today and not running out of money tomorrow.

A More Luxurious Retirement Assumption

Given I don’t want to die with a net worth 2.5X higher than when I retired, I decided to bump up my annual spending from $60,000 to $96,000 and YOLO a little. Even at that level, $96,000 still represents just a 4% safe withdrawal rate if I retire at 60 with a $2.35 million portfolio.

In other words, I’d still be projected to die with around $2.4 million left over. This is plenty of cushion to sleep well at night while enjoying life more along the way. That said, my probability of this retirement scenario coming to fruition is only 81%. So maybe I “only” die with $1-$2 million instead of $2.4 million. That’s fine by me.

The Process Of Hiring Empower

Overall, I thought the 40-minute free financial consultation was worthwhile for understanding where my IRA portfolio stood. It feels great knowing that if I can make it to age 60, I should have no problem spending at least $96,000 a year from my IRA portfolio alone. The projection assumes I rebalance my current highly aggressive portfolio, but since I’ve been semi-retired since 2012, I’m not too worried.

Empower uses BNY Pershing as its custodian, so if you decide to have them manage your money, you’ll simply fill out a transfer form and move your existing assets to Pershing. Having transferred over $1 million portfolios before to get a better mortgage rate, I know the process is straightforward. You just fill out a permission form online and it takes at most two weeks.

Capital Gains Taxes Due To Rebalancing

My main concern was the tax hit from rebalancing. Paying capital gains on roughly $1.2 million of a $1.5 million portfolio would sting. Thankfully, the Empower advisor reminded me that because this was my IRA, there are no tax consequences from buying or selling positions within it.

Therefore, if you are considering hiring Empower, I recommend starting with your tax-advantaged accounts. Alternatively, you could have them manage a smaller taxable brokerage account, ideally close to the $100,000 minimum. This approach helps minimize your tax liabilities.

Empower Management Fees

Empower’s fees are competitive for a full-service wealth management firm.

• 0.89% AUM for investment or wealth management clients with less than $1 million
• Private Clients:
  • 0.79% on the first $3 million
  • 0.69% on the next $2 million
  • 0.59% on the next $5 million
  • 0.49% on assets over $10 million

While nobody enjoys paying management fees, these rates are lower than big names like Goldman Sachs or JP Morgan, which typically charge over 1%, on top of the fees from the funds they invest your capital in.

I know this firsthand because I help manage a close relative’s account for free. She moved her seven-figure portfolio from Goldman to an online brokerage account for me to manage. She was paying over 1% but was unhappy with their service and also wanted to part ways with her ex-husband’s money management firm.

Who Benefits Most From a Financial Advisor

If you don’t like managing your portfolio, aren’t confident in investing, don’t have the time, and want holistic financial guidance, Empower is worth considering. You can try them for a year, learn from their approach, and then decide whether to continue paying or return to managing your money yourself.

Many investors have missed out on huge gains this cycle because they kept too much in cash, paralyzed by indecision. I’ve met many of them and were always shocked to see how much cash they had relative to their net worth. Hiring a disciplined advisor could’ve helped them steadily invest and build wealth.

On the flip side, some investors are too aggressive, trading too often, selling near the bottom, and leveraging near the top. These folks could also benefit from Empower’s structured, unemotional approach to portfolio management.

For those of us who are personal finance fanatics, we can manage our own money just fine. But it’s still smart to get a professional check-up every year or two to ensure we’re on track. Markets change, risk tolerances evolve, and it’s easy to lose perspective during bull and bear cycles alike.

A free Empower financial consultation is a low-effort way to get that second opinion, and maybe uncover a few ways to optimize your wealth along the way.

Thankful For My Free Financial Analysis

Even after decades of managing my own money, I found value in getting a fresh, professional perspective. Empower’s free financial review gave me greater clarity about my retirement plan and confidence that my current strategy still aligns with my long-term goals. Sometimes, an outside set of eyes helps you see what you’ve been overlooking.

It’s funny to think back: when I started Financial Samurai at 32, traditional retirement at 60 or 65 felt like a lifetime away. Now at 48, it suddenly feels right around the corner.

My energy isn’t what it used to be, but my responsibilities have only grown with two young kids and a stay-at-home wife depending on me. The pressure to get our finances right has never been greater. That’s why I’m grateful I went through another free financial review with Empower. It gave me peace of mind and I hope it does the same for you.

Readers, if you’ve had your own free financial review, what are some things you discovered about your portfolio and your overall finances? When was the last time you had a review of your finances and what did you change as a result?

The statement is provided to you by Financial Samurai (“Promoter”) who has entered into a written referral agreement with Empower Advisory Group, LLC (“EAG”). Click here to learn more.

Since starting Financial Samurai in 2009, I’ve encouraged folks to keep an open mind and embrace as many different perspectives as possible. So often, we get set in our ways and think our approach is the only right way to do things. But I can assure you, you’re probably missing something—or could do something a little better—that could significantly improve your wealth or quality of life.

One different perspective I recently shared is how the richest people in the world are not index fund fanatics. I think this viewpoint is important because it helps wealth builders expand their minds to what’s possible. Yes, simplicity sells because it’s easy. However, if you want to break free from the herd, you’ve got to take more calculated risks.

Another perspective I offered was highlighting the value of paying someone to manage your money. I try to minimize fees as much as possible. But after managing a relative’s investment portfolios for a year, I absolutely see why fees are justified. Managing money for someone else can be incredibly stressful. I’ll never do it again for free.

In another post, I discussed how cultural differences may impede your chances of getting ahead in the workplace. If you’re part of the majority, you don’t have to spend as much energy assimilating or “sucking it up” to fit in and be liked. You just expect others to conform to you.

The Latest Shocking Perspective That Blew Me Away

While visiting my parents in Honolulu, I came upstairs and found my dad in his recliner watching Wimbledon. I glanced at the TV, which was showing Jannik Sinner vs. Grigor Dimitrov, and immediately asked, “What’s wrong?”

“What’s wrong with what?” he replied.

“Your TV,” I said. “It’s blurry.”

“I don’t know,” he shrugged. “Nothing’s wrong—except this horizontal line sometimes appears at the top.”

“What do you mean nothing’s wrong? It’s totally fuzzy!” I said.

“Oh really? I thought I just couldn’t see clearly anymore,” he answered.

He had gotten cataract surgery a couple years ago, which improved his vision. But he thought maybe it was declining again.

The Blurry 55″ TV My Parents Thought Was Normal

For a year and a half, my parents had been watching this blurry TV and blaming their eyesight instead of questioning the product. Zoom in closely: the name “Sinner” and the score are relatively clear in the top left, but his image is blurry. Even worse, the lower right-hand corner—where another match’s names and scores are displayed—is almost unreadable.

Watching tennis, with a tiny ball zipping across the screen, on this TV would’ve driven me nuts. I fiddled with the antenna just in case, but no improvement. I flipped through multiple channels over WiFI, same problem.

After just three minutes, it was obvious: the TV was failing, and they needed a new one. I couldn’t believe they had put up with this for so long, thinking they were the problem instead of the screen. I’ve seen this type of situation play out in marriages, but not with something as simple as a TV!

A New TV With A New Perspective

While I was already shopping for a new washer, dryer, and refrigerator for the in-law unit, I figured I might as well replace the old TV too. I hadn’t bought a TV in eight years and was blown away by how cheap prices had fallen. For just $650, I got them a 65″ Samsung, had the old one removed, the new one installed, and all their apps set up. It was $485 without the delivery and extra services that took more than an hour.

When the installers arrived, they confirmed the issue right away—the inverter was broken. That was a relief, honestly. A part of me had started questioning my own eyesight and worried that even with a new TV, things might still look blurry.

The clarity of the new TV was so much better. Given how many hours a day my parents watch TV, I’d argue this was the highest-impact quality-of-life improvement I gave them this trip. The second was fixing the drip in their kitchen ceiling that had been leaking for over three years!

But the real win wasn’t just a clearer picture, it was helping my parents realize that their vision wasn’t deteriorating at a rapid pace after all. I think as we age, we’re sometimes too quick to accept physical decline as inevitable. We stop questioning things and chalk up discomfort to “just getting old.”

This new TV helped restore not just visual clarity, but confidence.

Please Get a Different Perspective On Your Finances

I hope this story demonstrates how having a fresh set of eyes, literally, can dramatically improve your life. We often let inertia push us forward in the same direction, assuming what we’re doing must be fine. And if we have optimized our finances and lifestyle, great. But if we haven’t, the hidden costs can really compound to the point where we wonder where all our money went 10 years later.

It took me five years of underperformance in my son’s 529 plan before I finally shifted a greater asset allocation toward the S&P 500. With an 18-year time horizon, it made no sense for him to be in a target-date fund with a significant bond allocation. That’s not how I would invest my own money over that duration, as evidenced by my rollover IRA being 100% in equities since I left my job in 2012.

If only someone had reviewed the portfolio with me in 2017 and walked through the logic, his 529 would be over $100,000 larger today! The compounding effect of a suboptimal decision can become enormous over time. Ugh. Back then, I thought I was doing everything right—but I suppose it’s still better than not contributing at all.

When it comes to your finances, please seek out a different perspective. You are likely missing something that could cost you a fortune over time. Maybe it’s being stuck in a high-fee active fund that’s long past its prime. Maybe it’s choosing an expensive target-date fund over a cheaper index version. Or maybe it’s simply forgetting about the idle cash sitting in an old rollover IRA you haven’t touched in years.

Don’t wait 1.5 years watching a blurry financial picture before realizing something’s wrong. A clearer perspective could make all the difference.

Get a Free Financial Check-Up From Empower

If you have over $100,000 in investable assets—whether in taxable accounts, savings, 401(k)s, or IRAs—you can get a free financial analysis from an Empower financial advisor by signing up here. There’s no obligation, just an opportunity to have a seasoned professional review your finances with a fresh set of eyes.

Empower’s advisors build and analyze portfolios for a living. They may uncover hidden fees, inefficient allocations, or overlooked opportunities to optimize your financial plan. Even if you think everything is in great shape, getting a second opinion might help you spot what you’re not seeing—just like my parents with their TV.

The referral is brought to you by Financial Samurai, who has a partnership with Empower Advisory Group, LLC. You can read more about how it works here.

When it comes to your money and your future, don’t go it alone. One conversation could be worth tens or even hundreds of thousands of dollars over time.

To expedite your journey to financial freedom, join over 60,000 others and subscribe to the free Financial Samurai newsletter. Financial Samurai is among the largest independently-owned personal finance websites, established in 2009. Everything is written based on firsthand experience and expertise.

As always, The Motley Fool cannot and does not provide personalized investing or financial advice. This information is for informational and educational purposes only and is not a substitute for professional financial advice. Always seek the guidance of a qualified financial advisor for any questions regarding your personal financial situation. If you’d like to submit your question for feedback, you can do so here.

What would you do differently if you knew that you were going to be inheriting a lot of money? This is a question that a Reddit poster asked recently, after he discovered that he and his wife are going to be receiving millions when his parents pass away.

What do you wish you knew before inheriting potentially life changing $?
byu/Maleficent_Cut_4344 ininheritance

Since he wants to be ready for the inheritance that he knows is coming, he asked others who had already received a substantial financial gift what advice they might have or what they wish they knew in advance before the payment came. Fortunately, Reddit users came through with some helpful suggestions.

Finding out that a big inheritance is coming can be life-changing

The Redditor who started the thread explained that he and his wife are both in their 50s. His parents, who are in their 70s, informed him that they will be leaving him 45% of their $5 million estate, including $3 million in retirement accounts, $500,000 in savings, and a $1.5 million home.

The original poster (OP) and his wife have already been budgeting and saving, and they were anticipating retiring in seven years when they hit their own target retirement account balance. Their medical needs will also be taken care of by an employer when they retire early, which he described as a nice bonus since he doesn’t have to pay for individual insurance coverage.

So, now he’s trying to figure out what to do. He said he thinks they may spend around 10% of the inheritance in the first few years after receiving it, then leave 90% of the money behind to build generational wealth for his kids. But he wants to know what others who had received a big sum would do to see if his plan would work, if there are steps he should be taking now, or if they would do anything differently.

Should you make plans in advance for a big inheritance?

A number of Reddit posters chimed in with a smart suggestion for the OP, advising him that he should talk with a professional about his situation. After all, $2.5 million is more money than most people will have in their lifetime, and unfortunately, a lot of people do end up spending an inheritance too quickly if they don’t know how to manage it. The OP has the potential to set up future generations with financial security if he makes the right choices, and a financial advisor could help him to do that.

That may be an especially good idea, as the OP has indicated that he and his wife plan to spend as much as 10% of the inheritance in the first few years. It’s a bit of a red flag that they are already planning on spending money that they won’t get potentially for some years, and a large amount of it, too. Once they start spending, they may get used to living that lavish lifestyle, and it may be hard to cut back. Or they may make commitments and make expensive purchases, like a big new house, that come with ongoing costs.

Other posters also shared concerns about the potential for the OP to squander the inheritance, so they suggested making a careful and detailed budget to ensure that the money doesn’t end up simply slipping through the poster’s fingers. Focusing on long-term growth strategies and spending a small amount at a time, at a safe withdrawal rate, could allow the OP to make the most of the inheritance both for himself and for his kids, rather than just jumping into spending 10% of the money right away in the first couple of years.

The reality is that $2.5 million, and potentially more if the money grows, can make a big difference — but only if the money is truly used wisely. So the OP needs to think carefully about what his goals are for the funds and make a plan to achieve them.

I recently received a question that boils down to this: How do you know when you have enough money? And once you do, when is it time to shift from chasing excess returns to simply maintaining what you have?

There are several ways to approach this question, which I’ll explore in this post. I’ve come up with a framework that I think makes sense for those who think they truly have enough.

Here’s the question presented from a reader.

Hi Sam,

I just finished your piece on risk-free passive income—really well done. A very accurate depiction of the trade-offs between the two approaches.

I have a question for you: You illustrate the comparison using a $5 million portfolio. I’m curious—at what wealth level does the appeal of building more wealth start to fade, and when does preserving capital with 2%–3% returns plus inflation protection become the primary objective?

I fully agree that wealth building is still relevant at the $5 million level. But what about at $10 million? $15 million? Or does it take more? Let’s assume a 3.75%–4% yield and inflation-beating dividend growth (say, via SCHD). Real estate could match this as well, but I question whether it truly qualifies as passive.

At what point in the journey does playing defense and focusing on income stability outweigh the pursuit of more wealth? When is it time to stop chasing and just maintain?

Thanks,

Jim

The Elusive Concept of “Enough”

“Enough” is subjective. For some, there’s never enough money—enough is always a moving target, 2X more than what they think they want once they get there.

For others, it might mean having 25X to 50X their annual expenses in investments, multiples I think are appropriate for 80% of people to answer what enough is. I personally like using the inverse of the FS Withdrawal Rate as a guide.

Spend $50,000 a year? You have enough if you have between $1.25 million – $2.5 million. If the 10-year bond yield declines to 3%, then you’d divide $50,000 by 2.4% (3% X 80%) if you use my FS withdrawal rate to get to $2,083,333. My safe withdrawal rate is a dynamic safe withdrawal rate that changes with economic conditions. It helps families build generational wealth.

However, I believe the best way to know you have enough money is this: you refuse to trade your time doing something you don’t fully enjoy for money.

What you enjoy is, of course, also highly subjective. But it should be something you like doing at least 90% of the time or you feel at least 90% of the activity is enjoyable.

The Real Test: Will You Walk Away?

The clearest indicator that you have enough money is your willingness to walk away from a job—or an activity—that drains you.

You can rationalize your way into staying. You might tell yourself: “I don’t need the money.” But if you’re still clocking in at a job you dislike, you’re not being honest. Time is more valuable than money, so if you really had enough, you wouldn’t be doing something you dislike.

Now, I know some of you who are financially independent on paper will say, “But I love my job.” And that’s awesome. Seriously—you’ve hit the career lottery. Keep going. Nobody quits or retires early from a job they dislike.

But I also know many more are saying that out of fear—afraid to let go of a steady paycheck, afraid of losing structure or identity. And if that’s the case, I challenge you: muster the courage to engineer your layoff or find a path out. That’s when you’ll know you’ve reached enough.

Questions to Ask Yourself If You Think You Have Enough Money

To help determine whether you have the courage to stop doing something you don’t enjoy just for the money, ask yourself:

• Would you rather take care of your baby during their precious first year of life, or sit in endless meetings every day?
• Commute during rush hour, or sleep in and read a good book?
• Work late for a month to finish a project, or spend that time playing with your kids or helping them with schoolwork?
• Travel for business for weeks at a time, or care for an aging parent with health issues?
• Meet monthly and quarterly sales quotas, or play pickleball in the late morning and take a nap after?
• Play corporate politics to get promoted, or enjoy the freedom to be your true self and only spend time with people you like?
• Fly out on a Sunday afternoon for a Monday morning client meeting, or travel the world with no set return date?

If given the choice, who would honestly choose the work option in any of these scenarios?

Please, be honest with yourself. Your financial independence number is not real if you continue to subject yourself to displeasure after getting there.

When Is It Time To Stop Chasing More Wealth and Just Maintain?

Once you have enough money, logic would dictate that you no longer need to take financial risks. Instead, you could simply invest your entire net worth into risk-free or low-risk investments that at least keep up with inflation.

These types of investments that generate risk-free income include:

• Money market funds (though yields may not always match or beat inflation)
• Treasury bonds (yields are generally higher than inflation)
• AAA municipal bonds (nearly risk-free and usually yield more than inflation)

The reality, however, is that stocks and real estate have historically been the best-performing asset classes when it comes to beating inflation over the long term. Cryptocurrency—specifically Bitcoin—is also a contender. But as we all know, none of these are risk-free.

Furthermore, nobody is ever truly content with what they have when they know there’s a decent chance of having more given enough time in the market.

Divide Your Wealth Into Risk-Free and Risk-Required Buckets

If you truly believe you have enough money, the best strategy is to allocate a portion of your net worth into completely risk-free or low-risk investments. This bucket should generate enough passive income to cover 100% of your living expenses. In other words, ringfence a portion of your net worth that will take care of you for life, no matter what happens.

Once you’ve secured this financial base, you can then invest the remainder of your wealth in riskier assets for potentially greater returns, without the stress of needing those returns to survive. Think about this portion of your investments as playing with the houses money.

A Fat FIRE Example:

Let’s say your desired annual household spending is $400,000. You’re fortunate to have a top 1% net worth of $14 million. At a 4% safe withdrawal rate, you’d allocate $10 million ($400,000 / 0.04) into Treasury bonds yielding over 4% or similarly safe investments.

You can then invest the remaining $4 million into stocks, real estate, venture, crypto, or any risk asset you want. Even if you lose half—or all—of this risk bucket, your lifestyle remains fully supported by your safe assets.

A Lean FIRE Example:

Let’s say you and your spouse have no children and are content spending $50,000 gross a year. Your net worth is $1.5 million. At a 4% safe withdrawal rate, you would allocate $1.25 million to risk-free or low-risk investments, and invest the remaining $250,000 in riskier assets for possible upside.

Now, of course, allocating 83.3% of your net worth to safe assets might seem extreme. But if you’re truly satisfied with what you have, then this asset allocation makes perfect sense. Especially when the Treasury yield is greater than inflation, as it often is—since inflation helps determine bond yields in the first place.

If you’re uncomfortable with such a conservative approach, then perhaps you don’t actually feel like you have enough. On paper, you might be financially independent, but emotionally and psychologically, you’re not there yet.

You’re still willing to risk losing money for the chance of having more that you want or think you need. Or you’re still encouraging your spouse to work or you’re still working hard on generating supplemental income.

And that’s OK. Just be honest with yourself about whether you truly have enough.

The Ideal Percentage of Your Net Worth in Risk-Free Assets

You might think the ideal situation is being able to allocate the smallest percentage of your net worth to risk-free assets while still being able to cover your desired living expenses. The lower the percentage, the richer you appear to be. But having too small a percentage in risk-free assets might also suggest you’re overly frugal or not generous enough with your time and wealth.

For example, let’s say you have a $10 million net worth, the ideal net worth to retire according to a previous FS survey, and only spend $40,000 a year. At a 4% rate of return, you’d only need to allocate 10%—or $1 million—into risk-free investments to cover your expenses. But what’s the point of having $10 million if you’re only living off 10% of it? You could have saved all the stress and energy slaving away when you were younger.

Sure, investing the remaining $9 million in risk assets to potentially double it in 10 years sounds exciting. But again, what’s the point if you’re not spending it or using it to help others? Money

A More Balanced Approach: 20%–50% In Risk-Free Investments

Once you have enough, the ideal percentage of your net worth in risk-free assets is somewhere around 20% to 50%. Within this range, you’re likely spending enough to enjoy the fruits of your labor—say, $80,000 to $200,000 a year, continuing the earlier example. At the same time, you still have a significant portion of your net worth—50% or more—invested in risk assets that have historically outpaced inflation.

Even if you no longer need more money, it would be unwise to bet against the long-term returns of stocks, real estate, and other growth assets. And if your risk investments do well, you can always use the extra gains to support your children, grandchildren, friends, relatives, or organizations in need.

When in doubt, split the difference: 50% risk-free, 50% risk assets. It’s a balanced, emotionally comforting strategy that gives you both security and upside.

Nobody Is Going to Follow My Recommended Risk-Free Percentages

Despite the logic, very few people who believe they have enough money will follow this 20%–50% allocation guide. Why? Two reasons:

1. Greed – We all want more money, especially more than our peers.
2. An Unrealistic Fear of the Worst – We catastrophize worst-case scenarios that rarely happen.

Ironically, these two emotions often lead us to take more risk than necessary in pursuit of money we don’t actually need. The result is usually working far longer than necessary and/or dying with far more money than we can ever spend.

There’s also a positive reason many of the multi-millionaires I consult with give for why they keep grinding: the simple challenge of making more. They see it as a game—running up the score through productive efforts like building a business, gaining more clients, or conducting investment research and taking calculated risks.

My Reason to Take More Risk: A Clear Forecast for Higher Expenses

I left corporate America in 2012 because I believed $3 million was enough for my wife and me to live a modest lifestyle in expensive cities like San Francisco or Honolulu. And it was as we could comfortably live off $80,000 a year. The courage to leave was helped by negotiating a severance package that covered at least five years of normal living expenses.

But instead of putting my roughly $2.7 million in investable assets (excluding home equity) into Treasury and municipal bonds, I chose to invest 98% in stocks and rental properties. At 34, I knew I was too young not to take risk—especially since we appeared to be recovering from the global financial crisis. I even dumped my entire six-figure severance check into a DJIA index structured note.

My wife also wanted to leave her job by age 35, which added more pressure to grow our net worth. I also knew that having children would cause our annual expenses to balloon—especially if we stayed in San Francisco. Unsubsidized healthcare and preschool tuition alone could run an extra $4,000–$5,000 a month after tax. With a second child, our monthly costs could easily rise by another $3,000–$4,000.

Putting the 20% – 50% Into Risk-Free Investments To The Test

With a $3 million net worth, my recommended percentages into risk-free investments would be between $600,000 to $1.5 million. At a 4% rate of return, that would generate $24,000 – $60,000. Unfortunately, we wanted to live off $80,000 a year.

At 34, I simply wasn’t rich enough. Covering $80,000 a year in pre-tax expenses through risk-free income at 4% would require allocating $2 million. That means, at a 20% allocation, I would’ve needed to retire with at least $10 million!

In hindsight, the most reasonable allocation to risk-free investments would have been 50%. To do that, I would have needed an extra $1 million in capital—raising my target net worth to $4 million.

This makes sense because one of my biggest regrets about retiring early was doing so too early. If I could do it over again, I would have tried to transfer to another office and worked until age 40—just 5.5 more years. If I had, I would’ve reached at least a $4 million net worth by then, especially given how stocks and real estate continued to rise.

Ah, being able to back up what I felt I should have done with objective math is a wonderful feeling! Instead of accumulating a $1 million greater net worth, I just spent time earning online income to make up for the risk-free gross passive income gap of $20,000 – $56,0000 a year. It was an enjoyable and effective process.

Fear Of A Difficult Future Pushes Me To Continue Taking Risk

Today, I could sell a large portion of my investments and move the proceeds into risk-free Treasury bonds to cover our desired living expenses. But the tax bill would be immense.

Instead, I’d much rather allocate the majority of new money I earn toward building up our risk-free investments. Of course, with my relatively low income, that will take time. So the first step was to sell one rental property and reposition some of the tax-free profits into Treasury bonds.

While our investments are worth more than 25X our annual household expenses, only about 5% of our net worth is currently allocated to risk-free or ultra-low-risk assets.

Now that I’ve written this article, I should aim to increase that allocation to 30% by the time I turn 50 in 2027. Based on our current expenses and realistic net worth projections, this range feels appropriate.

If I can make the asset allocation shift, I’ll let you know whether I finally feel 100% financially secure. Please run your own risk-free percentage allocation as well!

Readers, how do you measure whether you truly have enough? Do you think people who say they have enough but continue working at a job they don’t enjoy are fooling themselves? What do you believe is the ideal percentage of your net worth to allocate to risk-free assets in order to confidently cover your living expenses for life? And why do you think we still take investment risks—even when, on paper, we already have enough?

Suggestions To Build More Wealth

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If you want to achieve financial freedom sooner, pick up a copy of my USA TODAY? bestseller, Millionaire Milestones: Simple Steps To Seven Figures. It’s packed with actionable advice to help you build more wealth than 90% of the population, so you can live free.

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At age seven, Robert Rosenkrantz made a decision that would shape his entire life: he would take full responsibility for his future.

As a child, Rosenkrantz watched his parents struggle financially. His father was unemployed for two years, and his mother worked as a drugstore clerk.

Their financial insecurity was painfully obvious to young Robert. He never knew if the electricity or telephone service would be shut off.

But rather than seeing this as an obstacle, he saw it as a path to self-reliance.

By age 14, Rosenkrantz was managing investments for his family. By 35, he had amassed $400,000 — equivalent to about $4 million today. Then came the pivotal moment that changed everything: a negotiation with wealthy entrepreneur Joe Mailman.

When Mailman expressed concerns about traditional investment structures that created a “heads you win, tails I lose” scenario, Rosenkrantz made a bold counter-offer. He put his entire liquid net worth at risk in exchange for a 50/50 profit split with no carried interest.

“First deal, we lost $100,000. The second one, we made $100 million,” Rosenkrantz says during the interview. “So it averaged out.”

Now 82, Rosenkrantz joins us to discuss his book, “The Stoic Capitalist,” and the principles that guided his career.

For over 35 years, he’s carried the same negotiation card from “Getting to Yes” in his wallet — a reminder that negotiation isn’t about winning, but solving problems together.

We talk about his counterintuitive investment philosophy: look for companies that require minimal specialized talent, like laundromats or self-storage facilities. He says these often make better investments than those needing exceptional management, like restaurants.

This principle guided his first major success, a lawn and garden products business that essentially put dirt in bags — a simple operation that became a regional monopoly and eventually sold for $100 million.

Today, Rosenkrantz funds scientific research on longevity and hosts debate programs that present balanced perspectives on contentious issues. His philanthropy includes backing a groundbreaking study that has extended worm lifespans from 15 days to over 250 days — potentially the longest lifespan extension ever achieved in any organism.

When asked about retirement, he responds: “How do you spell that?”

His advice for decision-making comes straight from stoic philosophy: focus only on what you can control — the present and future, not the past. This means disregarding sunk costs completely when making decisions and using reason to regulate emotions.

For Rosenkrantz, counting the zeros — focusing only on opportunities with enough potential impact — helps prioritize time and delegate effectively. At 82, he still practices these principles daily, considering himself “biologically more like 70 and getting younger.”

Timestamps:

Note: Timestamps will vary on individual listening devices based on dynamic advertising run times. The provided timestamps are approximate and may be several minutes off due to changing ad lengths.

(0:00) Intro

(2:00) Welcome and introduction to Robert Rosenkrantz

(4:00) The negotiation card from “Getting to Yes” in Rosenkrantz’s wallet

(5:00) Negotiation as problem-solving, not a contest

(7:00) Growing up on Upper West Side with financially insecure parents

(9:40) Becoming self-reliant at age seven

(13:40) First stock investment at age 14

(18:20) Managing family portfolio as a teenager

(22:40) Explanation of stoic philosophy principles

(29:00) Transition from $400k net worth to major wealth

(32:20) The pivotal negotiation with Joe Mailman

(39:22) Fear management and rational risk assessment

(43:40) First major deal loss with Ivy Hill Communications

(49:50) The stoic approach to sunk costs

(55:00) Time management and delegation strategies

(1:02:54) How interviewing is one of Rosenkrantz’s most important activities

(1:04:40) Why businesses requiring less talent often make better investments

(1:11:20) Philanthropy and longevity research funding

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