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Lifestyle Investing

Of the many ways to look at investing, the traditional method was to choose your investments and then plot them into the investment pyramid, a graphic you have seen frequently in this book. The problem with the investment pyramid is that it's overly one-dimensional and difficult to apply to your retirement planning because you will typically go through phases. To more broadly accommodate the manner in which you invest, it can often be easier to approach investing from the angle of a lifestyle preference.

Applying this concept, we all go through three phases in our lives: accumulation to preservation to distribution. These are not defined by age per se; they can also be defined by your emotional state of mind. Taking risk as an example, I will illustrate my point, but first let's look a bit more closely at each of these phases.


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