It Pays to Prepare Early

Letting Go of a Little Now So You Don’t Have to Give Up Everything Later

As a financial advisor, one of the hardest parts of the job is watching people lose what they’ve worked so hard to earn when they could have prevented the loss. Too many people avoid planning for potential risks because they don’t see the immediate benefit and they think it will ruin the lifestyle they have now. Instead, they choose to hold on to what they have and hope for the best later. But the reality is, when you’re not willing to sacrifice a little in the present—that is when you end up paying for it later and potentially losing the life you worked so hard to create.

Your life doesn’t always play out according to the best-case scenario. Sometimes you experience a tragedy. For example, sometimes we find ourselves in the middle of a pandemic where even the most successful people can lose their jobs. That’s why it’s important to know how to use and protect your money wisely. One of our simplest and most effective recommendations is that people use the resources they have now to establish safeguards later in life. One can never know what the future holds, and it’s better to sacrifice a little bit of your pleasures today than to risk everything later.

Unfortunately, some people think they only have two options: to fly high or to get crushed—they believe that they can spend heavily, invest riskily, and hope to live rich while they can—or that they can save their money, living as if they’re poor in order to build something substantial for the future. But there is a middle ground—there is a world of financial possibility between the moon and the sewer.

In our last article, we told the story of a man who wisely diversified his assets, and it saved him from losing his business after a tragic accident for which he was liable. While he kept his business, there’s another part to the story that isn’t as positive when you look at what could have happened. He lost $5 million in personal assets—money he could have saved if he’d been willing to invest in protecting it. This business owner could have purchased liability insurance, and his plan would have helped covered the losses after his accident. Instead, he wanted to avoid the expense and spend his money on more tangible, exciting things. And while there’s nothing wrong with enjoying your money, you also need to know when to sacrifice a little so you can save yourself from a great loss later. He could have afforded the insurance policy; instead, he had to be happy that the lawsuit didn’t cost him more than it did.

We want to make it clear—there is nothing wrong with spending your money on the fun things in life. In fact, spending money is what makes our economy thrive. And when you use it to create memories with your loved ones, your wealth takes on more value than any number could assign to it. We want to help you prepare properly so that you can spend your money—with complete confidence about your future and zero guilt about your choices.

That’s why insurance is so important. Investing is also important to a comprehensive financial plan, but investments won’t pay your family if you lose your ability to work or you pass away unexpectedly. Investments help you build your assets so your wealth lasts, but strategic insurance planning protects you from specific risks you can’t otherwise control. There are people who will stand in line to buy the newest iPhone but won’t spend on an insurance policy—we don’t want you to be one of those people. We realize insurance isn’t sexy, but it’s incredibly worth it in the long run. Compared to your entire future and the wellbeing of your family, a little sacrifice should be well worth the investment.

This educational third-party article is provided as a courtesy by Sam Alame. To learn more about the information or topics discussed, please contact us.