Protecting your financial life is crucial whether you are building your wealth or already have substantial assets.
There are several risk factors damaging to your financial life.
- Death or disability that eliminates future earnings and your family’s financial needs
- Liquidity needs when your family needs it most
- Taxes that take your assets and give them to the government
- Liabilities from lawsuits and creditor actions (related to your business, swimming pool, housekeeper, automobile, or many other aspects of your life)
There are a number of ways to address these pitfalls. Some ways might include:
- Self insure
- Transfer the risk to a third party, using insurance
- Transfer the asset(s) to a separate entity, or organization
- Lever up an asset
- Take on the risk, and hope for the best
You may have already chosen one of these options. It may, or may not have been a conscious choice. Let’s discuss the possible pitfalls, solutions and help you understand the consequences.
