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Wealth Preservation Framework
A conservative investment approach focused on maintaining purchasing power and reducing stress rather than maximizing returns, typically used after achieving a significant financial milestone.
How It Works
Works by diversifying across low-risk assets (index funds, treasuries, real estate) while living off separate income streams to avoid touching the principal nest egg.
Components
Set aside 2-3 years of living expenses in liquid savings
Invest windfall in diversified, low-risk assets (index funds, bonds)
Live off separate income streams, never touch the principal
Use 3% withdrawal rule as theoretical guideline
Avoid active trading or market timing
When to Use
When you've achieved financial independence through a business sale or other windfall and your primary goal shifts from wealth creation to wealth preservation.
When Not to Use
When you're still in wealth-building phase, young with high risk tolerance, or when your current wealth isn't sufficient for your long-term goals.
Anti-Patterns to Avoid
Example
“After selling a company for $10M, investor puts funds in 79% index funds, 15% treasuries, 6% REITs, while continuing to work and live off current income, treating the $10M as untouchable security.”
Related Knowledge
For individual investors, selling stocks is almost always a mistake - the optimal strategy is to nev
Human psychology consistently leads to poor timing decisions based on emotion, fear, or external noise rather than fundamental analysis.
Systematically evaluate and optimize personal investment allocation through peer feedback
Clear understanding of current allocation, identification of blind spots, actionable feedback from trusted peers, and refined investment strategy aligned with goals.
Convert entrepreneurial success into sustainable long-term wealth
Financial independence where investment returns can fund lifestyle indefinitely without touching principal, plus continued income from new ventures.
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Crisis Contrarian Investment Framework
Investment approach that involves buying assets when everyone else is selling during market crashes or crisis periods