Here's a tidbit to consider before we get into the details: You have $100,000 in some sort of investment, let's call it stocks (equities in the investing lingo). Let's say that you never touch the principal (however much you had at the start of last year, each year). If you do everything wrong, what's the worst outcome you could have in 10 years?
Not touching the principal is one of those rules everyone hears about, it seems reasonable. Leave your money invested and let it make money for you! Great idea, but is it more complicated than that? Well, as it turns out, yes.
