The 100 Minus Your Age Rule
A Simple Way to Balance Your Investment Portfolio
FINANCIAL PLANNING
8/2/20263 min read
The 100 Minus Your Age Rule: A Simple Way to Balance Your Investments
Ever wondered how much of your money should be in "risky" investments like stocks versus "safer" ones like bonds? There's a decades-old rule of thumb that makes this decision almost embarrassingly simple — no spreadsheets, no jargon, just one subtraction.
It's called the 100 Minus Your Age Rule.
The Rule, In One Line
Subtract your age from 100. That's the percentage of your portfolio that should go into stocks. The rest goes into bonds or other fixed-income investments.
So:
100 − Your Age = % in Stocks Your Age = % in Bonds
As simple as ABC.
Think of It Like Your Spice Tolerance
Here's a simple way to picture it: imagine your investment portfolio as a plate of food, and stocks are the pepper.
When you're young, your stomach (your portfolio) can handle a lot of spice. A bad meal today doesn't ruin your week — you bounce back fast. So you load up on pepper (stocks), because the heat (risk) comes with flavor (higher long-term growth).
As you get older, your tolerance changes. Too much spice starts to upset your stomach, and you can't recover from a bad meal as quickly. So you naturally dial back the pepper and add more of the mild, steady stuff (bonds) that won't wreck your day.
Stocks work the same way. They can swing wildly in value in the short term, but historically grow faster over the long run. Bonds are calmer — they pay you steady, more predictable returns. The younger you are, the more time you have to recover from a rough patch in the stock market, so you can afford more "spice." The older you get, the more you shift toward steady and predictable.
Let's Do the Math
Say you have a portfolio worth GHS 10,000 (or any currency — the math works the same).
At Age 25 you keep 75% of your investment in Stocks/Shares(Equity) and 25% in Bonds(Fixed Income)
When you turn 45 you rebalance your portfolio this way; 55% to Stocks/Shares and 45% to Bonds(Fixed Income).
Then at age 65, 35% to Stocks/Shares(Equity) and 65% to Bonds(Fixed Income)
Notice the pattern: as age goes up, the stock slice shrinks and the bond slice grows. Every birthday, in theory, you nudge the mix by 1% — a little less pepper, a little more mild.
Why This Works
Time is your buffer. A 25-year-old has 30–40 years before retirement — plenty of time to ride out stock market ups and downs. A 65-year-old may need to start withdrawing money soon, so there's less time to recover from a downturn.
It forces discipline. Instead of guessing when to "play it safe," the rule gives you an automatic, unemotional adjustment every year.
It's a starting point, not gospel. It doesn't account for your personal risk appetite, health, income stability, or how long you expect to live — all of which matter too.
A Few Things to Keep in Mind
This rule was created decades ago, when people didn't live or work as long as they do today. Because of longer life expectancies, some modern advisors now suggest using 110 or even 120 minus your age instead of 100, so you don't end up too conservative too early. It's also worth remembering this rule only covers stocks and bonds — it doesn't factor in things like real estate, cash savings, or a business you own, which many people also count as part of their wealth.
The bottom line: use it as a conversation starter, not a strict formula. Your actual comfort with risk, financial goals, and life circumstances should always have the final say.
Disclaimer: This content is for educational purposes only and does not constitute financial advice. Please speak with a licensed financial advisor before making investment decisions.
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