Why Cash Reserves Are Essential

One of the most important elements of a retirement portfolio is having cash reserves or conservative investments. These reserves are your safety net, allowing you to avoid selling stocks during a market downturn. The financial and emotional stress of withdrawing from your portfolio when the market is down can’t be overstated, which is why a diversified portfolio is crucial—it’s not just about growth but also about providing stability.

What Counts as Cash in Your Portfolio?

When we talk about cash, it doesn’t always mean literal cash sitting in a bank account. It could also include cash equivalents like money market funds, short-term bonds, or other stable investments. The key is understanding how much of your portfolio is in these safe assets versus stocks, so you can determine the size of your “cash bucket.”

A Smart Withdrawal Strategy

A well-planned withdrawal strategy is another critical piece of the puzzle. Your portfolio should generate cash through dividends, interest, and regular rebalancing. For example, during a market upturn, you can rebalance by selling appreciated assets to generate cash for living expenses while maintaining your desired allocation.

When to Use Your Cash Reserves

Knowing when to tap into your cash reserves is just as important as having them. I typically recommend setting a trigger point—for example, if the market drops by 20-25%, it’s time to start living on your cash reserves instead of selling stocks. Setting the trigger too low, such as 5%, means you’ll rely on cash too often, while setting it too high, like 40%, could leave your portfolio overly depleted.

How Cash Needs Change Over Time

Cash needs don’t stay the same throughout retirement. For instance, if you delay Social Security benefits, your portfolio might carry a heavier burden initially. However, once Social Security kicks in, your reliance on cash from the portfolio may decrease, allowing for a higher stock allocation over time.

Your Portfolio as a Cash Machine

A well-structured portfolio should generate cash through dividends and interest, reducing the need to tap into the principal. In some cases, even a 100% stock portfolio could work if it produces sufficient dividends to cover living expenses. This approach isn’t for everyone, but it highlights the importance of tailoring your strategy to your unique situation.

Calculating What You Need in Retirement

Understanding your retirement needs starts with a clear picture of your expenses and non-portfolio income sources. Begin by identifying your monthly living expenses, then subtract any income from Social Security, pensions, or other sources. The gap is what your portfolio needs to cover.

For example:

• Monthly Living Expenses: $5,000
• Social Security Income: $3,000
• Portfolio Need: $2,000/month or $24,000/year

This calculation provides a framework for determining the size of your cash reserves and portfolio allocation.

Factors That Affect Retirement Calculations

It’s important to remember that retirement planning isn’t static. Factors like taxes, inflation, marital status, lifestyle changes, and healthcare costs can all impact your calculations. Keeping these variables in mind ensures your plan remains flexible and realistic.

Practical Steps to Get Started

To create a solid retirement plan:

1. Understand your expenses and income sources.
2. Use a combination of bottom-up (detailed expense tracking) and top-down (percentage-based) approaches to estimate costs.
3. Adjust for taxes, inflation, and other factors to refine your plan.

Final Thoughts

Retirement is about more than just numbers; it’s about creating a plan that allows you to enjoy life while feeling secure about your financial future. By balancing your cash reserves and portfolio withdrawals, you can weather market fluctuations and ensure your money lasts.

You should always consult a financial, tax, or legal professional familiar about your unique circumstances before making any financial decisions. This material is intended for educational purposes only. Nothing in this material constitutes a solicitation for the sale or purchase of any securities. Any mentioned rates of return are historical or hypothetical in nature and are not a guarantee of future returns.

Past performance does not guarantee future performance. Future returns may be lower or higher. Investments involve risk. Investment values will fluctuate with market conditions, and security positions, when sold, may be worth less or more than their original cost.

The post How to Manage Cash Reserves and Portfolio Withdrawals in Retirement appeared first on ROI TV.

If you’ve ever wondered why some people seem to thrive financially while others struggle, it often comes down to these fundamental wealth-building principles.

1. Shift Your Money Mindset

Before you can build wealth, you need to think like the wealthy. Jaspreet emphasizes four key mindset shifts:

Believe that wealth is possible – Anyone can build wealth with the right habits.
View money as a tool – It’s not about hoarding cash, but using it to grow your wealth.
Understand that money is abundant – There is more than enough opportunity for financial success.
Accept the responsibility to succeed – You must take ownership of your financial future.

Wealth isn’t about spending on Gucci bags or luxury cars—it’s about investing in income-generating assets that set you up for the future.

2. Cash Is King, but Cash Flow Is Queen

Jaspreet stresses that while having cash is important, it’s cash flow that truly builds wealth. Instead of just saving money, invest in assets that generate consistent cash flow, like:

• Real estate rentals
• Dividend-producing stocks
• Business investments

He shares his personal experience of investing for cash flow since 2011, proving how long-term strategies generate lasting wealth.

3. Study Trends, Not Emotions

One of the biggest mistakes investors make is chasing hype. Whether it’s meme stocks, crypto, or overpriced assets, emotional investing often leads to losses.

Instead, study long-term trends:
Where is money flowing?
What industries are growing?
What businesses are thriving?

To help investors make informed decisions, Jaspreet created Market Briefs, a free financial newsletter that delivers unbiased financial news.

4. Debt Is Spending Future Income

Jaspreet warns against using debt to maintain a lifestyle or buy luxury items.

Credit cards and 0% APR offers sound great, but they trap people in high-interest payments.
Car loans for brand-new vehicles drain your income for years.

Instead, save up and buy what you can afford—this way, your money works for you, not against you.

5. Grow the Pot Instead of Squeezing Pennies

Yes, saving money is important. But focusing only on cutting expenses isn’t enough—you need to increase your income.

Instead of just clipping coupons, ask yourself:

How can I make more money?
Can I take on a side hustle or start a business?
What investments can help me grow my wealth?

Example: If a real estate agent sells your property for a higher price when given an incentive, you earn more instead of just saving a few dollars.

6. Value Over Price

Jaspreet learned a tough lesson when he hired a cheap accountant who cost him more in mistakes than he saved.

Sometimes, going cheap is the most expensive decision. Whether it’s legal services, financial advice, or home repairs, paying for quality often saves more money in the long run.

7. Use the 75/15/10 Plan

To build wealth efficiently, Jaspreet follows this simple rule:

75% of income for expenses (rent, food, daily life)
15% invested (stocks, real estate, business)
10% saved (emergency fund, future goals)

The key? Live within your means while steadily growing your investments.

8. Time Is Your Best Investment Ally

One of the most powerful wealth-building tools is time. The earlier you start, the more your money compounds.

Example:

• Investing $500/month for 25 years = $750,000
• Adding just 5 more years = $1.25 million
• Warren Buffett didn’t become a billionaire until his 60s, proving the power of long-term investing.

9. Don’t Let Salespeople Make Your Financial Decisions

Many financial professionals—insurance agents, mortgage lenders, and car dealers—are salespeople first.

Their goal: Sell you more products.
Your goal: Make smart financial choices based on knowledge.

Educate yourself on:
Investments (stocks, real estate, ETFs)
Loan terms (mortgages, credit, interest rates)
Retirement planning (401(k)s, Roth IRAs)

The more you know, the less likely you’ll fall for bad financial advice.

10. Wealth Alone Won’t Solve Everything

Yes, money reduces financial stress, but it won’t fix everything.

Jaspreet emphasizes that wealth must be balanced with:
Physical health – Exercise and nutrition matter.
Mental well-being – Stress and burnout can impact success.
Spiritual growth – Finding purpose beyond money.

Financial success is just one part of a fulfilling life—don’t neglect the other aspects of well-being.

Final Thoughts: Wealth Is Built Over Time

Building wealth isn’t about luck—it’s about consistent habits, smart investments, and long-term thinking.

Shift your mindset and believe wealth is possible.
Invest in cash flow, not just cash.
Avoid debt and financial traps.
Focus on long-term growth over quick wins.

By following these 10 wealth laws, anyone—no matter where they start—can build a strong financial future.

Jaspreet Singh is not a licensed financial advisor. He is a licensed attorney, but he is not providing you with legal advice in this article. This article, the topics discussed, and ideas presented are Jaspreet’s opinions and presented for entertainment purposes only. The information presented should not be construed as financial or legal advice. Always do your own due diligence.

The post 10 Laws To Live A Wealthy Life appeared first on ROI TV.