Bull run earnings: The balance between improving life and reinvestment

It is wise to cash out at the right time when making substantial profits during a bull run. This is not just advice, but comes from lessons learned. Early in my career, I missed good opportunities due to hesitation, and I still regret it to this day. Although market fluctuations are unpredictable, the fundamental principles always remain unchanged.

As time goes by, I gradually realize a truth: when the returns are enough to change the quality of life, cashing out at the right time can bring immeasurable benefits. This not only can immediately improve the living conditions of oneself and friends, but also pave the way for the future. If you have such an opportunity, I strongly advise you to seize it.

Waiting for the best selling opportunity is indeed tempting, always feeling that if you wait a little longer, you can gain more. However, the perfect timing is often just an illusion. It is not hard to see that successful traders do not achieve their success by perfectly capturing every peak, but rather through continuous profit-taking and maintaining liquidity. They realize early on that cashing out profits is key to long-term survival in this market.

One of my most valuable realizations is that opportunities always exist. This mindset helps alleviate the common fear of missing out when considering selling. While it may be hard to let go of well-performing positions, remember that blindly holding out of fear of missing out can be more costly in the long run.

I often think about the meaning of "escape velocity": that is, a financial situation that allows you to take on planned risks without jeopardizing your life stability. Once you reach this level, you can truly start to participate in the market and fully commit to pursuing higher returns.

Retirement Funds Required: A Realistic Perspective

As someone who has long been concerned about retirement issues, I often ponder: how much money is needed for a peaceful retirement? Although the media often emphasizes a astronomical figure, in reality, for many people, 1 to 2 million dollars may be sufficient. Let's analyze this issue from the perspective of traditional finance.

Data from 2022 shows that the average retirement account balance for individuals aged 65 and older is only $232,710. In contrast, having suddenly $1-2 million in savings is undoubtedly quite substantial. In fact, only about 3.2% of retirees have savings exceeding $1 million.

I understand that most of the readers of this article may be under 65 years old and hope to retire early. When I first heard that Americans believe they need $1.46 million to retire comfortably, I was also surprised. But then I realized a key point: this number is just an average, and each person's actual needs may vary significantly.

Let's consider the well-known 4% withdrawal rule. Suppose you have $2 million in savings, according to this rule, you can withdraw $80,000 each year. For many people, this is enough to maintain a comfortable standard of living. Your actual retirement needs largely depend on the lifestyle you expect. Do you want to travel the world or pursue a simple and peaceful life? Data shows that the average annual expenditure for people aged 65 and older in 2021 was $52,141. Savings of $1 million to $2 million can fully cover this level of spending.

Choosing a place to live after retirement can greatly impact your wealth utilization efficiency. A retirement fund of one million dollars may be tight in New York, but it could allow for a relatively luxurious life in a small town or certain foreign areas.

The Importance of Psychological Factors

Having savings of 1-2 million dollars can greatly relieve financial pressure and allow you to truly enjoy the pleasures of retirement.

Ultimately, whether 1-2 million dollars is enough to retire depends on individual circumstances. For many, this is not only sufficient but even exceeds expectations. The key is to start saving early, live within your means, and focus on things that truly bring happiness. Remember, retirement is not just about money; it's about creating a lifestyle that you love, regardless of how much is in your bank account.

I deeply agree with the opinion of a certain market observer. Once you deposit life-changing amounts of money into a bank or invest in stable assets like real estate, you can participate in the market with a more relaxed mindset.

The "ease" mentioned here does not mean that making money becomes easy, but rather that your mindset becomes more relaxed. You can make decisions more calmly and only trade when you are truly confident. Even in the event of a loss, you will not lose everything because you have already established a safety net.

As that observer said: "The real fun starts here." From this perspective, the current market cycle is more attractive to me. Even in the worst-case scenario, I have a reliable backup. Of course, some people perform better under pressure, but I believe this does not apply to most.