How to Wisely Cash Out in a Bull Run, Improving Your Life While Continuing to Invest

When you achieve unrealized profits in investments that can change your life, it is wise to cash out at the right time. This is not just advice, but a lesson learned from painful experiences by many investors. In the early stages of their careers, many people have hesitated whether to realize their gains, and this hesitation often leads to regret. Although the value of our assets may fluctuate with the market, the fundamental principles of investing remain unchanged.

One important realization is that cashing out at the right time can not only bring financial gains but also lead to substantial improvements in the lives of you and those around you. Imagine how wonderful it would be to instantly enhance your quality of life just by a simple "sell" operation. If you have such an opportunity, make sure to seize it.

Many investors always want to wait for the "best" selling opportunity, hoping to gain higher returns by waiting a bit longer. However, the perfect selling opportunity often exists only in imagination. Truly successful traders do not rely on accurately grasping every market peak, but instead achieve long-term success through continuous profits and maintaining liquidity. They have long understood that cashing out part of the profits is key to surviving in this market for the long term.

A mindset that helps alleviate selling pressure is: opportunities are always emerging. This idea can ease the fear of missing out that investors often have when considering cashing out. While giving up a well-performing position may feel regretful, it is important to remember that blindly holding onto it out of fear of missing opportunities may lead to greater losses in the long run.

"Escape velocity" is a concept worth contemplating. It refers to a financial situation that has stabilized to the point where you can take on certain risks without affecting your basic quality of life. Once you reach this level, you can participate in the market more freely and pursue higher returns wholeheartedly.

Retirement Fund Needed: Actual Amount May Be Less Than Expected

As someone who often thinks about retirement issues, I frequently ponder: how much money do I really need to retire comfortably? Although the media often promotes astronomical figures for retirement funds, in reality, for many people, 1 to 2 million dollars may be sufficient. Let's analyze this issue from a traditional finance perspective.

According to statistics, the average retirement account balance for people aged 65 and older in 2022 was only $232,710. In contrast, suddenly having $1-2 million in retirement funds is clearly not a small amount. In fact, only about 3.2% of retirees have savings exceeding $1 million.

Of course, most readers of this article may not be 65 yet, but hope to retire early. The notion that Americans need $1.46 million to retire comfortably may feel pressuring, but it is important to recognize that this is just an average. Each person's actual needs may vary significantly.

We can refer to the famous 4% retirement rule. If you have $2 million in savings, according to this rule, you can withdraw $80,000 per year for living expenses. 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 enjoy a simple life? According to data from the Bureau of Labor Statistics, the average annual spending for individuals aged 65 and over in 2021 was $52,141. Savings of $1 million to $2 million can fully cover this level of expenditure.

The choice of residence after retirement has a huge impact on your financial situation. One million dollars may be tight in New York, but can afford a superior lifestyle in small towns or certain countries.

The Importance of Psychological Factors

Knowing that you have savings of $1-2 million can greatly alleviate financial pressure and allow you to truly enjoy retirement.

Ultimately, whether 1 to 2 million dollars is enough for retirement 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 you joy. Remember, the quality of retirement life depends not only on the numbers in your bank account but also on whether you can create a lifestyle you love.

Once you deposit enough life-changing funds into a bank or invest in stable assets like real estate, you can participate in the market with a more relaxed mindset.

Here, "easy" does not mean making money more easily, but rather that your mindset will be more composed. You can make decisions more calmly and only trade when you are truly confident. Even if you encounter losses, you will not lose everything because you already have basic protection.

As one investor said: "The real fun starts here." From this perspective, each new investment cycle becomes more interesting. Even in the worst-case scenario, you still have a safe foundation to rely on. Of course, some people perform better under pressure, but for most, a stable financial foundation leads to better investment decisions and a more enjoyable investment experience.