Stay in Style, Stay Invested: Your Financial Fit Through the Years
- liveyourmoneystyle
- Jun 16
- 3 min read
Welcome back to Deeply Invested. In this episode, we’re continuing our journey through the 5 Pillars of Personal Finance by zooming in on Investing. In Part 1, we introduced the basics, this episode dives deeper. We explore how to assess your risk tolerance, how your investment strategy might evolve as you age, the importance of diversification, and some of the most common investing mistakes to avoid.
Whether you’re just starting out or getting closer to retirement, this episode is designed to help you think more intentionally about your investment choices.
Risk Assessment: What’s Your Comfort Level?
Risk is a key factor that often gets overlooked in early investing conversations. The truth is, everyone has a different capacity for risk, and understanding yours is crucial.
Investing isn’t just about numbers; it’s also about behavior and emotions. If you’re putting money into riskier assets but constantly losing sleep or checking your account in a panic, then your strategy isn’t serving you.
Think of it like wearing a fashion trend you hate just because everyone else is doing it - it won’t feel right. Your investment strategy needs to match your personal style and comfort level so that you can stick with it over time.
Investing by Age: Adapting as You Grow
Your investing goals and approaches can evolve across different decades of life. While these are general guidelines, your own experience, goals, and tolerance for risk should always lead the way.
In Your 20s
Time is on your side. With a long investment horizon, you can afford to take more risks, knowing there’s time to recover from market downturns.
Consider a riskier portfolio if you’re comfortable with it
Open a Roth IRA early and contribute regularly
Build strong investment habits now - consistency matters
Even small amounts invested consistently can grow substantially due to compound interest.
In Your 30s and 40s
Now’s the time to refine your strategy and ensure it aligns with long-term goals.
Focus on diversification - not just among asset types, but also within each category
Increase your monthly contributions as your income grows
Consider opening an HSA, which offers powerful tax advantages and can help with medical expenses in retirement
If you have children, look into 529 college savings plans. Even small contributions can go a long way over time
In Your 50s and Beyond
As you approach retirement, your focus may shift to preservation rather than aggressive growth.
Shift toward lower-risk, reliable investments such as bonds and blue-chip stocks.
Max out retirement contributions, including catch-up contributions if eligible.
Begin thinking about withdrawal strategies:
When to start taking distributions
How much to withdraw annually
Which accounts to draw from first, keeping tax implications in mind (typically: taxable → tax-deferred → tax-free accounts)
Diversification: The Backbone of a Strong Portfolio
Your investment portfolio is like your wardrobe. You wouldn’t fill your closet with just one type of clothing and expect to be prepared for every occasion. The same goes for your investments.
Diversification protects you from the downside of any one investment performing poorly.
Diversification can happen at multiple levels:
Across account types: brokerage, Roth IRA, 401(k), HSA, etc
Across asset classes: stocks, bonds, real estate, mutual funds
Within asset classes: a variety of companies, sectors, industries, and locations
Being diversified helps cushion your portfolio from volatility and provides more balanced returns over time.
Mistakes to Avoid: Learn From the Common Pitfalls
Here are a few mistakes that people tend to make when they start to invest:
Trying to time the market Trying to buy low and sell high sounds ideal, but in practice, it’s almost impossible to do consistently. What matters more is time in the market, not timing the market.
Reacting emotionally to fluctuations Don’t mourn losses you haven’t realized or celebrate gains you haven’t cashed in. The value of an investment only becomes real when you sell it. Keep emotions in check and focus on your long-term goals
Comparing yourself to others Everyone’s financial situation, goals, and risk tolerance are different. Following someone else’s strategy blindly can lead to poor outcomes for your unique path.
Falling for get-rich-quick schemes If something sounds too good to be true, it probably is. Be wary of trendy investment “opportunities” or anything promising guaranteed high returns. Stick to strategies that are time-tested and aligned with your long-term goals.
What’s Next?
We’ve only scratched the surface of what it means to build a thoughtful, resilient investment strategy. In future episodes, we’ll explore more specific topics - from how to pick investments to understanding different account types in more depth.
If you have questions or a topic you’d love for us to cover, we’d love to hear from you. Email us anytime at hello@liveyourmoneystyle.com.
Resources
