Book Reviews | Oct 29 2025
Edited extract from Retire life ready: Practical steps to build your wealth and live your ideal retirement by James Wrigley.
There are two key investment risks I help clients manage in the financial advice work I do that are important for you to understand and implement in your own plans. One is to avoid being a forced seller. The other is to avoid being a panicked seller.
In order to manage the risk of being a panicked seller, you need to accept that your investments will go up and down over time on your journey to building your net nest egg balance and retiring life ready.
No-one panics that their investments have gone up too much; the panic starts with a downturn in whatever market you are investing in.
A hypothetical scenario
The market has just gone down, and you’re panicking and sell out thinking you’ll reinvest when things bottom out or start to look better again.
The problem is, how will you ever know when the market has bottomed? Who will tell you? What’s your sign for things to be better for you to reinvest?
If the markets continue to fall, you will pat yourself on the back for making the right call, but you probably won’t invest again just now as it might fall some more.
So, you wait. Then, all of a sudden, things start to go up, but you know they will go back down again, so you wait. What’s the trigger for you to reinvest?
These are all questions with answers nobody knows, so it’s important you aren’t a panicked seller, and instead, are investing in a manner you are comfortable with so that you can ride out the inevitable ups and downs.
How far is too far?
In my work as a financial adviser, we always ask clients a question (among others) along the lines of: “How far are you willing to accept your portfolio may drop before things have gone too far for you?”
Responses from clients vary from minus 5 per cent, minus 10 per cent, minus 15 per cent and minus 20 per cent. Most of the time, although not always, the younger someone is, the more likely they are to pick the minus 20 per cent answer
because they have time on their side for things to recover.
Client story: Cashing out when the going gets tough
In all the years I’ve worked in financial advice, I’ve only ever had one client sell out twice, and it did a huge amount of damage to their retirement savings. Let’s call this client Wendy.
Wendy earned an average income but put a little extra into superannuation each year, so she had built up a balance of over $500,000.
Wendy and her husband had a mortgage on their own home that they were not going to be able to pay off by the time they reached 65, and they were always going to need to access Wendy’s super to clear the mortgage when retirement came.
If we go back to 2008/2009, the GFC hit and caused share markets (and, as a result, superannuation balances) to fall significantly. At this stage, Wendy was still 15 years off retiring.
As markets began to fall, Wendy started panicking. She watched her super balance drop and started calling me regularly.
My advice to her every time was to leave her super balance alone; things would eventually turn around. She was 15+ years off from retiring and had plenty of time to ride things out.
In March 2009, Wendy had had enough. She instructed me to move her whole superannuation balance to the cash investment option in her super account and said she would reinvest ‘when things got better’.
The day after she made the switch, markets dropped a little more. By 9 March 2009, stock markets around the world bottomed and started to recover.
Wendy was convinced things would drop further, so didn’t reinvest her super. Almost a year later, I convinced her to reinvest half her super balance.
In the years that followed, she reinvested the remaining balance but would always say to me ‘super never recovered since the GFC’.
In reality, the share markets and super balances had recovered, and we eventually reached all-time record highs again.
If Wendy had not sold out her super balance, she would also have had a super balance at the highest level it had ever been. Instead, her balance hovered around $300,000 after making some withdrawals once she turned 60 to pay for a few different things.
Fast-forward and we had the COVID market downturn. Wendy was a whole lot closer to retirement by now, but she went one better than she did during the GFC.
This time Wendy picked the absolute bottom of markets during COVID to tell me she’d had enough and wanted to sell out. Fortunately, I convinced her to hold onto some of her investments, so the damage wasn’t as bad the second time around.
Wendy has now retired, cashed out all her superannuation and paid off their mortgage. She doesn’t have any superannuation left. Had she not been a panicked seller, Wendy would have had several hundred thousand left in her superannuation fund after the withdrawal to clear the mortgage.
If you can’t accept that your investments may go down from time to time, you shouldn’t be investing. You can’t expect to earn the good returns when times are good and not endure some of the poor returns when things aren’t so great.
Edited extract from Retire life ready: Practical steps to build your wealth and live your ideal retirement by James Wrigley (Wiley, $34.95), available 29 October at all leading retailers.
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