In an age when our financial well-being is usually expressed in terms of numbers--the size of our paychecks and bank accounts, the amount we need to have saved up before we can retire, and so on--it's easy to forget that the ultimate goal isn't just having enough, it's how having enough makes us feel. If you look deeply enough, you may find that the real goal is to have peace of mind--secure in the knowledge that you can afford the lifestyle you want now as well as later in life, and that you can weather any financial storm.
In some cases, achieving peace of mind may mean making financial sacrifices. Think of a retired investor who is content to settle for the lower returns offered by a 50% stock/50% bond portfolio rather than risk the volatility (and sleepless nights) of a portfolio made up entirely of stocks. Or think of someone who prefers to keep an unusually high allocation to cash in case of emergencies or just to be on the safe side in case the market heads south.
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Adam Zoll does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.