Protecting your life investment
Protecting Your Life Investment
Great to be back and tell you guys about protecting your life investments. It was something that spoke to me from the very moment that I learned it. I have applied it to my life which is what I would like to help you do as well.
You are probably giving this crazy look right now that says I have to be out of my mind to think finances is an easy subject. Well, it is an easy subject and here’s why.
This should sound familiar and it is because this is exactly the way we learn to work out and maintain our physical fitness.
As beginners we watch our instructors and learn the basic concepts or movement and how we form muscle and then we put those concepts to use.
“The Theory of Decreasing Responsibility”.
You need to be educated first and second to properly protect yourselves and your families.
The Theory of Decreasing Responsibility is why I believe in Term Life Insurance only.
At Retirement
1. Grown children
2. Lower debt
3. Mortgage paid
Retirement income needed
At Retirement
1. Grown children
2. Lower debt
3. Mortgage paid
Retirement income needed
Today
1. Young children
2. High debt
3. House mortgage
Loss of income would
be devastating
Today
1. Young children
2. High debt
3. House mortgage
Loss of income would
be devastating
The Theory basically states that individuals should own life insurance outside of their job. The reason for this is that a job is not as guaranteed as it used to be and also because we cannot predict how we will… you know… Kick the Bucket. It is a touchy subject for some so I refer to it as Life protection. If you leave a job but have your own Life Protection (Life Insurance) in place you will not experience a break in coverage. Similarly, if you become terminally ill you will still have Life Protection even if you are unable to work at your job any longer.
This is very important because during your younger years you have young children, a mortgage, high debt and a loss of income due to the loss of life in the household would be devastating. Experts say that you need at least 10x your income in coverage so that in the event of the loss of a loved one or significant other you can survive by drawing income for the next 10 years because most households rely on both incomes.
Buying term insurance and investing the difference is the best way to set up your financial plan. As you near retirement where the children are grown, mortgage is paid and you have lower debt now you can start to draw retirement income and live comfortably without Life Protection (Life Insuance) because at this point you are self-insured.
I know my ladies, moms, and wives are the main financial care takers when it comes to balancing the checkbook at the end of the month. So make sure that you, your significant other and the family are covered to protect your family’s well-being.
The Theory of Decreasing Responsibility is very simple as you can see. It basically states that we need to protect our income when we are young and plan for retirement so that we are self-insured at retirement age. This is one bit of knowledge that I definitely want to share with everyone because as hard working adults we need financial education and financial coaching to ensure that we achieve our life goals and end up exactly where we want to be at the end of our lives no matter what happens.
Simple and easy
See you next week!
Facebook.com/TK King
