Are You in the “Almost, Just, Recently” Stage of Life?
Have you almost reached, just reached, or recently reached financial freedom? This period starts ten years before and ends ten after your financial freedom date. It’s a make-or-break stage of life when you should begin to think differently about your financial well-being.
Is there a right way to invest? Everyone certainly has their own take on the best investing strategy.
I learned from Morgan Housel’s excellent book, “The Psychology of Money,” that the best way to invest depends on your goals. Yes, that seems obvious. But let’s dig into it.
Many right investing strategies
If two people have two different goals, then two ways of investing could be considered right. That’s huge! Two investing strategies can both be right. If more experts realized this, we’d have far less arguing over what’s best. Here’s a little more:
A day trader's goal differs from that of a long-term buy-and-holder. It’s why you still see buyers when stocks are extremely overvalued. Because a day trader gets in and out quickly, she won’t think twice about buying an overheated stock. Yet the buy-and-holder won’t touch it, especially if she’s a value investor. Investor type is one kind of difference. Different types of investors have different investment goals.
A second difference is where the investor is in life: the investor’s age or stage. I used to think only in terms of age. You’ve probably heard the asset allocation rule: hold “your age” in bonds. Later, the rule changed to hold “your age minus 20” in bonds. [If you’re 45 years old, you’d hold 45 minus 20 or 25% bonds and, therefore, 75% stocks in a diversified portfolio.]
Now I believe it’s more appropriate to consider your stage of life, not age. If you are early to wealth building, you should consider taking more risk to increase your return. You need not take extra risk if you’ve been financially independent for decades. You have enough money.
The “almost, just, recently” stage is based on your financial freedom date.
Almost, just, recently
I’m most interested in the middle stage of life. I call it your “almost, just, or recently” period that brackets the point when you reach financial freedom. Specifically, it’s the ten years before and after financial freedom. These 20 years are make-or-break.
Are you almost to financial freedom? Just reached it? Have you reached it recently?
Over this period, your approach to personal finances and investing remains consistent. What I mean is that the numbers work out similarly whether you’re five years from financial freedom or five years into it.
Three ever-improving scenarios
Let’s look at three scenarios that could play out during this 20-year period.
1) Here, you rely solely on the stock market and do no work during your “almost, just, recently” stage of life. You take a chance that the market goes nowhere (0%) over 20 years. When drawing on your investments for living expenses, your wealth declines.
The market goes up and down. But over many years, it goes nowhere.
2) Here, you diversify into other holdings like bonds, gold, and commodities so that you can better rely on a positive return (10% in this example) over 20 years. At least one asset class will go up over a 20-year period.
You’re still drawing on your portfolio, so its return is less than 10%.
3) Here, you add part-time (what I call choosy) work to the mix. Limiting how much you withdraw from your investment portfolio helps you diversify even further. You no longer rely solely on the financial markets. In my example, you end up ahead with greater than 10% growth.
Do some part-time or partial-year work to keep your mind and relationships active.
Learn more about this stage
If you play your cards wrong during this period, you risk needing to return to work full-time. I believe it is the most important stage of life to get right.
In fact, it’s so important that it’s my sole focus. If you find yourself somewhere in this 20-year long stage of life, I write for you.
I am writing a (hopefully very good) book for release in 2026!
My proposed title: “Build a Choosy Life: Confidently Craft a Plan to Reach Financial Freedom Faster.”
The book’s core message: Most of us strive for wealth or status. But true success is living life completely and confidently on our terms.
And my promise to readers: After reading, you will have 1) built a plan to reach financial freedom confidently 2) sooner than you thought possible with 3) a support structure in place to achieve it.
I will be sharing stories, chapters, and overflow material early. If you are interested, email me at brian@herriotconsulting.com.
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Brian Herriot writes for us mid-lifers from his home in Alameda, California, and cabin in Hazelhurst, Wisconsin. He also prepares financial freedom plans for consultants and other mid-career professionals in one-week sprints. Check out his take on a new and different kind of retirement at choosyconsultant.com.