Cable TV tell-alls, House & Garden, and Sharper Image (NASDAQ:SHRP) show us how the other half lives and what they buy. But even more telling is what the rich do with their money when they're not spending it.

Our mole, the Certified Financial Planner Board of Standards, reports that "upper-quartile" Americans, those whose average annual household income is $106,000, save or invest 12% of their total income and have an average net worth just over half a million dollars -- a Faberge-worthy nest egg. A peek inside the portfolios of the well-heeled reveals how they allocate their assets:

  • Real estate equity (31%)
  • Retirement savings plans (26%)
  • Stock mutual funds (10%)
  • Certificates of deposit (CDs), money markets, and savings accounts (10%)
  • Individual stocks (7%)
  • Pensions (6%)
  • Miscellaneous assets (bond funds, bonds, annuities) (10%)

Well, good for them. So how should the rest of us apportion our hard-earned dough?

Before you even look up the meaning of "REIT" or rifle through your desk for your last 401(k) statement, determine exactly when you need to crack open your nest egg and to start spending it. Divide your dough into three piles by following four rules of thumb taken from a more detailed Rule Your Retirementasset allocation report:

Rule 1: If you need the money in the next year, it should be in cash.

Rule 2: If you need the money in the next one to five (or even seven) years, choose safe, income-producing investments such as Treasuries, CDs, or bonds.

Rule 3: Any money you don't need for more than seven years is a candidate for the stock market.

Rule 4: Always own stocks.

Rule No. 3 may not sound too definitive, and that's intentional. Money you don't need in the short term is a candidate for the stock market -- depending on your risk tolerance. All of the experts who concentrate solely on rate of return ignore one of the most important reasons we don't put all of our retirement eggs in one basket: Comfort.

If you go pale at the thought of losing 5% of your portfolio's value during the course of earning higher returns, you may want to limit your stock investments to just 20% of your overall portfolio. On the other hand, if you don't bat an eye at a 35% plunge (again, in pursuit of a bigger payoff), you could probably live with 80% of your retirement nest egg tied to stocks.

If nothing else, at least act like the rich in one way: Take a healthy slice of today's income -- we'd give the nod to even 10% -- and put it away for your future. You don't have to be filthy rich to see the wisdom in doing so.

For ideas on how to fulfill your champagne wishes and caviar dreams -- and how to build a retirement portfolio that lets you sleep soundly -- take a free peek at the Rule Your Retirement newsletter. We won't let on that you didn't pay full retail.