Protect Your Assets
Growing up as the youngest with three older brothers who all played soccer, the only football I ever watched was that one game in February with the really funny commercials. I was pretty football-illiterate, to say the least, until I met my husband who played at both the collegiate and professional levels. I went to watch him play in a casual, pick-up game when we first started dating. After his team scored a touchdown the kicker ran out to kick the extra point. He measured out his steps, the ball was snapped, his holder caught it, spun it, and just as the kicker took his last step and started to kick the ball, the line collapsed. This allowed the opposing team to not only run through the offensive line and block the kick, but also tackle the kicker (that cute guy I came to watch), knocking him to the ground under the weight of several massive men. Up until that very moment, I truly thought that the PAT (point after touchdown) was a free kick that couldn’t be blocked. I definitely never imagined that the kicker, of all people, could be tackled.
I have come a long way in my knowledge of the game in the last 6 years, but I will never forget the picture of that team folding in on itself and failing to protect an asset to their team (and my future asset), the kicker. My boyfriend was pretty banged up after the game and it took about a week to recover from the hits that he unnecessarily took. It reminds me of what could happen to our financial well-being when we fail to protect our assets. Each stage of life brings new risks that need to be mitigated in order to protect ourselves against loss.
In our earlier years, while we are single or newly married without children, our two largest assets that need protection are our stuff and our ability to continue working. That said, most of us carry property and casualty insurance in case of a car accident or a house fire. However, many young people never think about disability insurance, which would supplement their income in the case of an accident or illness. The fact is that 1 in 4 of today’s 20 year-olds will become disabled and be unable to work for at least 3 months sometime before they retire. Therefore, it is important for them to protect themselves by purchasing basic insurance to cover their needs and also work on establishing an emergency fund for the expenses that are unplanned for, but bound to occur.
We are presented with new risks once we start a family and add children to the household, in addition to those we’ve already covered. It’s important to have enough life insurance in place to provide for our spouse and children if we passed away prematurely. Another way to protect our assets is to set up an estate plan with a will, power-of-attorney, and any necessary trusts. This allows us to choose who inherits our assets and how they are divided when we do pass away so that Uncle Sam is not the major beneficiary.
Finally, when we reach the stage of life when the kids are grown and gone, and we’ve come to the end of our working careers, we have additional risks that need to be addressed. The possibility of the need for an assisted living facility or a nursing home is a real risk to our financial assets. Long-term care insurance can help offset costs and help protect our assets. Another major risk would be investment allocations and appropriately diversifying those resources to meet our long-term goals.
In reality, life will happen and the unexpected will occur. I became aware of that as my kicker, boyfriend, soon-to-be husband was mauled on his extra point attempt. If caught unprotected, it can knock us down with a heavy blow. We can potentially avoid a catastrophic loss and come out on the other side, without too many bruises, if we plan ahead and protect our assets.