Are You Protected?

ARE YOU PROTECTED, OR ARE YOU NAÏVE?

Whenever I have an opportunity to speak to groups or individuals I share two key scriptures of Financial Warning so I can bring safeguards to those who will hear.  These two scriptures call us not to be naïve, and to avoid financial mistakes that can cripple  . . .

“A prudent person foresees danger and takes precautions. The simpleton goes blindly on and suffers the consequences” Proverbs 22:3

In the Middle Ages before people would build a castle or a community, they would first build the mote or wall to protect them.  In our present times, we build a financial wall by protecting ourselves with a paper mote . . . called Insurance. Insurance is used to provide where a potential loss or liability would be excessive and unaffordable.  That is especially true when we have caused another’s loss.  It is critical that we make every effort to have certain Insurances in force to protect ourselves & others.

Health Insurance can be expensive and difficult to acquire at times, but we need to be diligent to research and get coverage. The number-one cause of bankruptcy today is medical bills (number 2 is credit cards).  In 2008 I was diagnosed with cancer and went through surgery, chemo, and multiple ongoing diagnostic exams and tests . . . I still have follow up assessment and checkups.  The bills were over $100,000, and coupled with be unable to work for a season . . . would have been unaffordable without adequate Health Insurance coverage. Unfortunately, getting good (and potentially life saving) health care is now dependent upon having insurance coverage.  So be diligent and make ever effort!  Look into Florida Healthy Kids for low income parents, Medishare (a low cost sharing program), and all the governmental, state, and public programs. To choose to go without Health Insurance is imprudent due to the high cost of medical services.

Auto Liability Insurance covers the most liable activity we do:  driving a two ton vehicle 70 mph in the rain two feet from another person . . . If you hurt someone else and you are at fault (or you are hurt by someone else), you will want to remunerate that other family.  Imagine if you caused an accident that disabled someone else who was the provider for his/her family?  I had a client that was driving down a wet road, was hit by another car and his car slid off the road and hit a worker and killed him . . . his legal bills alone were $70,000.  He had recently obtained an umbrella policy for $1 Million in Liability coverage, so his bills were paid and the Insurance Company rightly compensated that man’s family. Understandably, not having adequate Liability Insurance on your car is imprudent.

Disability Income Insurance pays a portion of your Income to you if you are sick or hurt and unable to work.  Most people have plenty of Life Insurance, but few get Disability Insurance . . . even though the odds are much greater you will have a Disability than die before age 65.  If you are thirty-two years old, you are 12x more likely to become disabled that to die by age 65.  Your ability to earn wages is your biggest asset . . . remember that “the rain falls on the good and the evil alike”.  Many employers offer group plans you can sign up for . . . make sure you opt for the Long Term Disability that pays until your at least age 65. You can also purchase a policy privately if your employer has no group plan.  It is imprudent not to have Long Term Disability Income Insurance.

“Know the state of your flocks, and put your heart into caring for your herds, for riches don't last forever” Proverbs 27:23-24

Most of my financial planning is helping people discover what they have and what they do not have . . . what they know and are aware of, and what they are unaware of.  Do you know what the % rate on your credit card balance is, and how to lower that?  Have you homesteaded your primary residence?  What are you Liability limits on your car, and what does Uninsured Motorist cover? How is your 401k invested, and it is diversified?  What are the fees your bank is charging you? Should you refinance your mortgage? What cable, phone, cell phone, and internet charges can you save on? How much are your expenses per month compared to your net income?  You get the idea; we need to know the condition of what we manage.

We are not expected to know everything, but we are responsible as stewards to manage well.  So . . . get sound counsel, get understanding, get knowledge . . . it will be a crown of wisdom to your financial management.  

Jeffery Masters, President of Jeffery W. Masters & Associates

Securities offered through LPL Financial, member FINRA/SIPC 

Investment Advise offered through Independent Advisor Alliance,

a Registered Investment Advisor. Independent Advisor Alliance and Jeffery W. Masters

& Associates are not affiliated with LPL Financial.  Call for questions @ 954.977.5150