Investing rule of Thumb

While cruising around the web I found a suggested guideline for investing. To find out the percentage of your assets which should be exposed to risk, simply use the Rule of 100:

100 – (Your age) = Percentage of your assets which should be invested.

I am 25, so 75% of my savings should be exposed to some risk, and therefore a larger chance of gain. The other 25% should be tucked away in a fail-safe account such as a CD or other savings device. This is by no means the correct method for everyone, but for my needs it seems right. As a semi-active investor I’d like to see more of my net worth exposed to some potential gains. I think it is better to learn financial mistakes while you are young and can easily recover rather than when you are older and have bills to pay and a family to support.

To restructure my finances to meet this 75% mark, I am going to be channeling my funds into my dividend portfolio after I have saved up 6 months of expenses.  The current yield I look to be earning is between 8-10% annually, without counting for any stock price fluctuations. The risk is that the companies may not choose to disperse any dividends(they have a 25-year record of paying dividends), but the reward would be making extra $$$ on a quarterly basis.

While it's awesome to be paid for saving your money, it's a better feeling of having the moolah to fall back on.