You can take 3 easy steps and easily protect your assets. Besides health concerns, the worst fear you face is running out of money. People spend tons of time thinking about how to make more money, but they often fail to take the time to protect what they’ve got.
How do you protect your assets?
The bedrock of your asset protection plan is insurance. You need to protect your assets and income, and insurance is the way to do it.
There are two risks to your assets. The first risk is that you’ll spend them down to nothing. We’ll deal with that risk in a bit. The second risk to your assets is being sued. If you are not involved in high-risk activities that involve other people, you’re not very likely to be sued. Just the same, you can get a dirt-cheap umbrella policy that covers you up to $1 or $2 million. Make sure you take advantage of this cheap insurance. If you have your own shop, it’s even more important to have the right business insurance.
The second risk is to your income. If you and your spouse rely on your income, you need to do your best to replace it in case you’re not around to make it. The easy solution? Get cheap life insurance. And while you’re at it, disability insurance is a must. Disability is actually a greater financial risk than premature death.
If you’re over 60, you should consider getting inexpensive senior term life. Remember, even if you aren’t working during retirement, you still might run into unforeseen problems. Perhaps your pension disappears or your Social Security spousal benefits are reduced. Don’t forget about surprise challenges.
2. Don’t Get Divorced
If you’re single, this is pretty easy to do. Just stay single and you’ll never have to worry about divorce. If you’re married like me, I hope you were fortunate enough to marry an angel like I did. If not, find something about him or her that you enjoy and focus on that. Whatever you do, don’t do something completely idiotic that will force your spouse to divorce you.
Numerous studies that examine the attributes of the average millionaire have confirmed the financial significance of staying married. Divorce can eat up 75% or more of your assets. You’ll have to give your “schnook” husband half of everything you have. Of course your shyster lawyer will eat up another good chunk too. If there is a problem in the marriage, find a therapist rather than an attorney. It’s a lot cheaper.
If you do end up getting a divorce, make sure you take steps to protect yourself. There is no reason to make a bad situation worse friend.
3. Track Your Spending
When you retire you have more time to spend, and that’s just what you’ll do unless you track your spending.
Many retired people resist this. They agree that budget tracking is important to working people, but they argue it’s less important for retired folks. They say that their expenses are fixed, as is their income.
But spending isn’t fixed. You simply must make sure that your spending is in line, and the only way to do that is to track it. I personally use a budget tracking software program called You Need A Budget. It’s not critical which program you use (even though I threw away my QUICKEN when I learned about YNAB). What is critical is that you track your spending and make sure you can afford the life you lead.
As you can see, you can easily protect your assets. The steps I’ve outlined are very straightforward. All you have to do now is take action.