The Rule of 120 is a simple formula to determine your ideal asset allocation between stocks and bonds. It suggests that you should subtract your age from 120 to find out how much of your portfolio should be invested in stocks. The rest should be in bonds. For example, if you're 30 years old, 90% of your portfolio should be in stocks and 10% in bonds. As you get older, the percentage of stocks decreases and the percentage of bonds increases. This rule is based on the assumption that as you age, you should take on less risk. However, it's important to note that everyone's financial situation and risk tolerance is different, so this rule may not be suitable for everyone. It's always a good idea to consult with a financial advisor or robo-advisor to determine the best investment strategy for you. Robo-advisors, like Daffy, play a crucial role in reinvesting dividends. They research the best ETFs for you to own, considering factors like cost and trading volume that most investors might overlook. They also automatically rebalance your portfolio on an ongoing basis, ensuring that your investments are always optimized. When it comes to dividends, robo-advisors intelligently reinvest them back into your portfolio. This is a complex task that can be difficult to do correctly on your own, but robo-advisors handle it with ease. Some robo-advisors, including Daffy, even offer advanced services like tax loss harvesting, which can help you save money on taxes. All these services are designed to enhance your portfolio returns, making the cost of a robo-advisor (generally around 0.25% of your portfolio every year) a worthwhile investment. Daffy is not just a robo-advisor, but also a Donor Advised Fund (DAF), making it a unique and valuable tool for investors. With Daffy, you can easily donate to almost every US public charity, track tax-deductible contributions, and access donation receipts all in one place. Plus, Daffy waives all membership fees for members with less than $100 in their fund. So, if you're considering using a robo-advisor, Daffy is a great option. Not only will it help you manage your investments and reinvest dividends intelligently, but it will also make charitable giving easier and more efficient. Please note that the information contained in this blog post is for educational purposes only and should not be considered tax advice. To assess your specific tax situation, please consult with a tax professional.