Individual Risk Tolerance - Spending vs Portfolio Size practice, indicate, individual, general

DarienHacker

Does anyone have a rule of thumb, or some insight in to when a given level of spending is sufficiently large to lower the risk tolerance of an individual?

It seems like in practice exams high spending needs don't always lower risk tolerance, and low spendings needs don't always indicate an above average ability to tolerate risk.

Any general insight into what circumstances and spending requirements would alter an individual's risk tolerance to above or below average would be greatly appreciated.

Thanks

IAmNeil

I haven't really found one. Unless you get one like vol2 #3 am question 1 where the guy has like 26mm then you need to take other factors into consideration. age, time horizon, can they get another job if need be (assuming they are retired), dependents