Structure Your Finances – Part 2
Adrian B Early, Ph.D., MBA, CFP®
Chief Investment Officer, shareGRO™ Practice
The art is not in making money, but in keeping it.
He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all.
– Eleanor Roosevelt
Finance serves two primary purposes, growing wealth, and protecting or guarding it. Part 1 was about building wealth and organizing that process. This Part 2 deals with protecting wealth once built.
A key danger is that unforeseen events can require huge drains on resources. This harms not just us, but our families and others. So emotions and the weight of import impinge on the decisions. The insurance industry is built on products to address individual types of risk. The dangers involved are so massive, we buy coverage for ones we can afford, and think likely to occur. This list gives some to consider:
|1.||Pay healthcare needs, esp. for large expensive procedures||Health insurance|
|2.||Protect against losing income through death||Life Insurance|
|3.||Provide income as long as alive||Annuity (Typically for retirement)|
|4.||Pay for nursing or other care||Long term Care (LTC) Insurance|
|5.||Cover income lost to Disability||Disability Insurance|
|6.||Homeowner’s||Homeowner’s (Property & Casualty, P & C Insurance)|
|7.||Auto liability coverage||Auto (Property & Casualty Insurance), Liability on both Property & Casualty Types|
|8.||High liability coverage||Umbrella liability policy, typically in multiples of $ 1 Million|
|9.||Legal fee prepayment||Prepaid legal service (insurance against legal fees from lawsuits)|
Protecting finances has long started with buying insurance you think you need. The list above can guide. But choosing a tool for each issue is onerous, and there are conflicts of interests between insurance suppliers and their customers. In wealth management, the industry can provide fiduciary compatible service (putting investors first, without significant conflicts of interest). That is not true with insurance [i].
But there is now another tool, integrated finance, that merges fiduciary compatible protection of wealth with its growth. It can address a portfolio of risks (and opportunities that insurance cannot). This works through a tiny amount of voluntary wealth redistribution among a network of investors. It can enable a smaller account under stress to recover faster through compound returns on the sharing cash flow.
May strategizing and winning the game of finance bring joy in life, and secure your financial freedom.
[i] Future of Finance by the Author
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