It might be a strange thing for a financial advisor to say that building wealth can wait. Yes, part of my job is to discuss ways for my clients to grow their wealth so they can achieve their financial goals. But building wealth is only secondary if somebody’s financial risk isn’t properly addressed.
The inspiration for this blog post was an article I read in the May 2015 edition of Money magazine (www.money.com). The cover story of this magazine was “101 Ways to Build Wealth”. Naturally, I was intrigued. As I flipped through the list of financial tid bits, I noticed a trend. All these wealth building ideas revolved around savings, investing, putting your raises to good use, and maximizing your tax efficiency. Not bad ideas actually.
What was shocking to me as a financial advisor was that absolutely none of those tips mentioned anything about protection. Out of 101 tips, each one assumed that you live in a fluffy fairy tale world where nothing bad could ever go wrong. As someone who sees first hand the types of financial crises people go through, it concerns me that people might read an article like this and follow its advice and assume everything is okay. It’s a false sense of security.
Then life happens. A spouse passes away unexpectedly. Somebody has a heart attack and needs to take time off work to recover. A child is seriously ill and you need to fly them to an expensive specialty hospital. What happens then? All your hard work building up your savings is depleted in one fell swoop. While it was great that your savings were there to get you through that rough time, now once you are recovered, it’s back to square one and your retirement dreams are starting to fade away. But what if your disaster comes even earlier in life, before you get a chance to amass your savings? You wipe out your savings and you go deep into debt just to survive. With interest payments piling up, you spend the next major chunk of your life trying to dig back out.
The good news is that there are strategies that exist in order to safeguard your family against all of those things.
I’m not saying all this to scare you, but to motivate you! You work so hard for your money; make sure it is protected! Book an appointment with a professional financial advisor and tell them you want to make sure you’re covered. The allure of building wealth and the dream of boundless riches is certainly appealing, which is why that magazine printed such an article. But back here on earth, I urge you to protect your wealth first and then find ways to build it.