This one is driving me crazy. Surely the last sentence on this page is exactly wrong, and the words ‘risky’ and ‘risk-free’ should be switched around?
HC + FC = Total Capital
As you grow older - HC goes down, so FC must become larger in order to complete the above equation.
HC is relatively risk free and FC is the risky portion. So HC is going down and FC needs to go up… so the statement as stated is correct.