You're listening to LifeKit from NPR.
Hey, it's Marielle.
Okay, I'm going to do things a little differently today.
I'm going to jump right into one of our tips for diversifying your investments.
It's a formula called the rule of 120.
The very simple calculation that folks can use is just take 120 minus your age.
120 minus your age.
And that should be your stock allocation.
By the way, this is Amanda Holden,
founder of a financial literacy business called Invested Development,
an author of How to Be a Rich Old Lady.
When she says stock allocation, she's talking about stocks versus bonds.
If that means nothing to you, sit tight.
We got you.
Anyway, the rule of 120.
Let's say you're 30, so minus 30 leaves 90% stocks, 10% bonds.
120 minus 30.
leaves you with 90% stocks.
And basically this breaks down to more stocks when you're young, fewer stocks as you get older.
That is just a starting point, but it is a really simple way to think about diversification,