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. I’m referring to liability, disability and life insurance.
Let’s talk about liability first. 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 and should get a dirt-cheap umbrella policy that covers you up to $1 or $2 million. Make sure you take advantage of this cheap insurance. And if you are self-employed it’s important to have the right business insurance too.
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, may or may not need senior term life. This depends on your unique situation. If you work during retirement, that’s a sign you might require this coverage. On the other hand, if you and your spouse make due with passive investment and pension income, you might be fine without the policy.
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 if you get divorced. 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.
Of course, no amount of money in the world is worth spending your life with the wrong person. 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 money, 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. It’s not critical which program you use. 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. What are you doing to safeguard your assets?
Kay Lynn @ Bucksome Boomer says
Instead of “don’t get divorced”, maybe the advice should be “pick your spouse carefully”. If I would have done that, I would never had gotten divorced!
Luckily, I got it right the second time and we’re still happy after 15 years.
rosa rugosa says
I think you have to qualify this statement:
“You have a much greater risk of becoming disabled than of dying.”
Dying is a certainty for everyone!
I like #2 – don’t get divorced. Pretty funny.
Yeah, the will sounds like a good idea too. We don’t have one yet, but I know we should.
Sustainable PF says
Write a will and update it after every major life event!