Friday, July 16, 2010

Tier 2: Protection

As I spoke before the first part of a building that has to be built is the foundation. Can you imagine if someone started building the walls to their house without a foundation. What if someone moved into their house before the roof was built? Can you imagine what would happen to their stuff when a storm came? Financially speaking a person's nest egg is the stuff they move into the house. But a nest egg isn't just a chunk of money. It's all their hopes and dreams, everything they want for the future. So even though they are moving into their dream house, they still have to wait for the foundation to be built, and they have to wait for the roof to be completed.

Tier 2 is the roof to our building. Protection includes auto insurance, home owners insurance, property insurance, life insurance, disability insurance, health insurance and any other type of insurance that may apply. The fact is few of us get through life without a little bad luck, and some of us have a lot of back luck. Instead of crossing our fingers and hoping nothing happens why not prepare for it?

When an unexpected event happens that causes a liability, it is absolutely essential that the proper protection is in place. If the proper insurance is not in place, assets are used to pay the liability that is created. With decreasing assets it also puts a strain on the family's cash flow.

You might say, but I won't become disabled, or I'm young I won't get cancer. I met a 22 year old man yesterday that is disabled for life because of a car accident. I have family and friends that both contracted cancer before the age of 23. Life happens. But when you are young, you feel invulnerable. As you get older you will understand that you are not invulnerable. I simply hope that you take the proper steps to protect your hopes and dreams from the rain.

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