Understanding and Applying the Rule of 100

Risk Management: Understanding The Rule of 100 And the Benefits of  Putting it to work for Us
I’m Steve Shyman, at Wilsave, we are Specialists in Safer Money Strategies
Everyone agrees that as we get older we need to take less and less risk with our money.
How much risk and how much safety should we have?
Let’s Understand the “Rule of 100” and how to apply it to our own situations.
After I explain the concept, I’ll show you numbers of how it might work for you.
The “Rule of 100” is a general guideline to help your money last as long as you live and tells you how much of your money should be safe and how much can be at risk based on your age.
Simply put, the “Rule of 100” says if you subtract your age from 100, the remainder can be at risk, and the rest should be safe from market risk.
For example, if you are 60,
100 – 60 = 40, so at age 60, the rule says have 60% safe and 40% at risk.
At age 80,
100- 80 = 20, so the rule says that age 80, 80% of your money should be safe, 20% can be at risk.
The Rule guides to have more safety as we age
Why separate between risk money and safe money and use the Rule of 100?
It may help you
Do better overtime
Meet your lifestyle needs and goals
Make you more comfortable and confident about your investments
Risk money,
Is money that you want to get a higher rate of return on, but to get the higher return, you are willing to take risk
Stocks, Bonds, Mutual Funds, ETFs, options are all examples of risk money
Today, we can use modern tools and technology to lower the risk on our risk money, if you are interested in that, please contact us
Safe Money is
The Money you never want to see go down
It’s guaranteed against losses
Banks typically offer low interest earning safe accounts
Insurance companies offer the ability to earn higher rates of return while keeping your money safe
Insurance products like fixed index annuities may give you extra features and benefits like
Potentially higher rates of return than other safe vehicles
Upside Market Participation with No Downside Risk
Enhanced Death Benefits
Guaranteed Income for Life
Tax Deferral
If you are interested in having some money safe, with the potential to earn reasonable rates of return, please contact us
Market losses can be devastating and life changing,
No one wants that
The rule gives us general guidelines on how much to have at risk and how much to keep safe to help us not outlive or make mistakes with our money.
The Rule of 100 is not a hard and fast rule
You can adjust it for your own risk tolerance and comfort level.
We feel based on the rule of 100, a well balanced portfolio has both a risky and a safe, guaranteed portion, which should adjust to have less risk as you age.
We help our clients earn reasonable rates of return on their safe money.
We help our clients keep their risk money safer using modern Risk Management Methods.
We often blend both risk and safety together to create an all weather financial solution.
When most people invest, they generally focus on the potential gains but usually don’t plan for what happens if and when the market falls.
By properly blending risk and safety into our portfolios we are investing for the reality of money which is the “full market cycle”
Markets go up and down and to do better, we need to invest considering the whole picture which means investing for the full market cycle from up to down and back up again.
By properly blending risk and safety into our portfolios considering the full market cycle from up to down and back up again, we can:
reduce our overall risk
reduce our stress and worry about our money
become more comfortable about our money
increase our confidence in our financial futures
At Wilsave, we blend both risk and safety together to create an all weather financial solution.
As we get older, most agree that we need
less risk and more safety with out money.
The market is more volatile than ever.
One look at this graph of the S&P
Illustrates the volatile world we live in.
Notice the smooth uptrend from 1980
till 2000
and the wild swings since 2000.
This volatility, called by some experts as
“the new normal” is likely to continue and
these swing can be hazardous to your wealth.
The landscape has changed over the last 40 years. To keep up and do well, you must be able to adapt your investment style to what is going on today.
To see how you can help protect your money and limit your losses
Please contact us at 312-796-7400, send me an email at steve@wilsave.com, or fill out the meeting request form at www.wilsave.com
There is no charge for our no obligation consultation.

Leave a Reply

Your email address will not be published. Required fields are marked *