Of course a diversified investment portfolio is important. However, I think it's equally important to be able to lower your standard of living, should that be necessary. That way you always know how to distinguish necessity from luxury, and won't feel bad about selling your car and switching to a bicycle, in case your gov't fund or the stock market... or even the allegedly rock-solid real estate market don't deliver as promised. Also, by being aware of what luxury means, you'll be able to enjoy it more, as it does not turn into a false sense of necessity.