Anonymous wrote:I don’t understand why people don’t consider inflation risk. Having that much cash on hand and having a paid off house is extremely risky due to inflation, as has been proven out over the last few years.

You’re not conservative, you took on way too much inflation risk and you’re continuing to go down the same path.
Your net worth is probably half of what it should be. Change course immediately and invest in S&P 500 index funds.

Anonymous wrote:OP, most people don't include their car in their net worth. It's a depreciating asset and it's highly unlikely you could sell it for what you paid for. Real estate on the other hand often increases in value, but it's illiquid value - you need somewhere to live after all, and if you ever decide to sell there are associated costs (realtor fees, settlement fees, potentially capital gains).

So really, what you have is low expenses (thanks to a paid off home and car) and a liquid net worth of $270K.

I'm self-employed too and I don't care what the experts say, I like having a lot of cash on hand. However, I also invest in index funds (I'm 60% stocks, 40% fixed income which includes bond funds, treasuries, CDs and cash) so I don't worry too much about inflation or feel like I'm missing out on gains. Being all cash is risky too, it's just a different kind of risk.

I have a friend who used to be terrified of the stock market but over the past few years, slowly got to 30% stocks (which her financial advisor told her is the minimum needed to keep up with inflation). She's been very happy with her decision, especially lately. Maybe you could consider starting off at a similar level, and investing 1/3 of what you have.