The story of Noah is an old one, recently retold (and completely reinterpreted) by Russell Crowe… although I must say not retold very well! Many ancient cultures mention a Great Flood in their writings or legends. Why is it that this story has been so compelling and retold over millennia? It has to do with survival. Warnings of a great storm and the plans set in place to ride out that coming storm…
Noah had the advantage, so the story goes, of God warning him of a coming catastrophe and what he needed to do to so that he and his family could survive. The account tells us that Noah listened to the instructions, made adequate preparations and when the storm came, he and his family were able to survive.
How does this relate to our financial future you may ask? Well, we too could face huge financial storms in our lives; redundancies; life changing events; economies grow and shrink, events that often leave us exposed and vulnerable. What lessons can we take from old man Noah then?
For one thing… seek the right advice. Seek a qualified person who takes a personal interest in you. Listen to the advice and implement it. Don’t wait until the storm hits! Act immediately and make needed adjustments. Noah had never seen rain before, yet he acted on the advice given and built his Ark. He was able to keep his head above water, so to speak, while everyone else drowned around him.
His adviser also believed in diversification, two of every kind was to go onto the boat. This was good advice. Even today this is regarded as a good strategy.
So even if you have never experienced a financial storm in your own life, always be prepared for one, make sure you build your financial ark with the aid of the right advice. It could save your (financial) life!!
In our busy day-to-day activities, we sometimes overlook a very important aspect of our planning: that of protecting ourselves, and our loved ones financially if things don’t go according to the Grand Plan.
Sure we provide financially for them now, but what about the ‘what ifs’?
If you currently have insurance in place, whether its default cover inside your superannuation fund or out, tailored or not; when last did you have a good look through it? Have a few years passed since you last considered whether your insurance is still relevant or more importantly, adequate? Maybe you’ve had a few changes since you first implemented your strategy.
This brings us to the point of this article: Have you had a major life event occur? Here are just four to consider, known to Advisers as review triggers: Marriage or Separation
What happens when I Do, becomes I Don’t. Either event is a huge change to your life and when a thorough review of your financial situation is most critical. You need to assess your new financial needs, levels of debt and the need to provide some kind of protection for both parties. When going your own way, do you need to reduce cover? Update your beneficiaries? Increase personal protection? Maintain what you have until the property settlement is complete? There’s a lot to consider! New job and income changes
You may have, or need to consider acquiring an Income Protection policy. Your ability to earn an income is your most important asset. Yet most will protect their house or car before this! Without an income, our lifestyle and material possessions cannot be sustained. If things have changed, ask yourself, does your new income reflect the amount you are currently covered for, are you paying too much in premiums? Do you have an agreed value or an indemnity benefit type? Do you know what waiting period was selected? Or how long you’ll be paid out in the event of illness or accident? All these factors could have a major impact if not done correctly and you’re suddenly unable to work.
Have you been remembering to claim the premiums at tax time? New home purchase
New homes normally come with increased debt. Life insurance can cover this in the event of your death. But what if you become disabled or suffer a serious illness… how will be payments be made? What’s your Plan B? Birth of a child
With an extra mouth to feed, your family’s income needs will have changed, and your expenses too! You may want to consider saving for future education expenses, taking out child cover to provide options in the event of major illnesses, and increasing your life insurance if you’d like to provide a legacy for your family.
If you have had one or more of these triggers, don’t you think it time to take action and do your review? Contact your Wealth Planning Partners adviser now to set up a time convenient to you. We also offer in-home visits or SKYPE calls if the 9 to 5 doesn’t suit you.
Most of us have been touched by having someone we love be diagnosed with, battle or suffer with cancer. Most recently, a lifelong girlfriend of mine passed away after a 7 year fight with breast cancer, at the age of 44.
Thankfully, I’d set her up with a Trauma Policy some years before and the lump sum financial assistance she received meant she had treatment options and could explore the avenues of her choice. Although her only lament was, that she wished she’d gotten more.
Trauma Insurance provides cover for many individual events (up to 50 with some providers) which include breast cancer, and pays a lump sum regardless of whether you’re prevented from working or not. It can provide invaluable financial support, security, and importantly options for treatment, care and recovery.
Women have unique needs. As a result, some insurers provide financial protection for health conditions of particular concern to women. Almost 81% of female Trauma claims with CommInsure are for cancer, making it undoubtedly the leading cause for claims.
Listen to Susie’s story here:
If you’d like to contact one of the WPP Advisers for a review of your situation, call the office on 07 5593 6895 to talk to one of our risk specialists now.
A recent chat with a friend soon turned into a request for a review of his financial situation, as I had a bit of time over the weekend we ended up having this very important discussion.
The lack of proper financial advice soon became very evident when looking at his situation. The family home still has a substantial mortgage; and he and his wife also own an investment property, which is being serviced with an interest only loan.
The husband is 54 years old, and is the main income earner who works in a very physically demanding job.
When the simple question was put to him that should he be injured and could no longer work or worse still, suddenly pass away, in what financial situation would his wife and daughter find themselves in?
His answer staggered me, he said: “Well, my wife could go back to work and my daughter is at uni, so she still has many years ahead of her to earn an income, my family will be fine and besides, I have $120,000 in my six superannuation funds which will be more than enough for them.”
Wow,! His 52 year old wife would have to go back to work, sell the investment property which would not generate any profit at current market conditions, his super payout would not cover the amount owing on the family home and his daughter would be left without any financial legacy from her father. Besides this worrying situation, if he was injured and could not work for any length of time, this family would be in dire straits.
Unfortunately this individual has set himself and his family up for failure in the event of the unexpected. What a sad legacy to leave his family.
I explained that this situation had an easy fix and provided him with a few strategies to think about, and showed him how inexpensive it would be. One of these was rolling his super into one preferred fund and saving hundreds, if not thousands of dollars a year in fees. As an option, death cover could be funded through the super, incurring no ‘out of pocket’ expense to the family but enabling them to be debt free in the event of his premature demise.
Having left this information with my friend for a week or two, I contacted him to see if he had given his situation any further thought and if he wanted to implement any of the strategies we spoke about. Once again his answer was very disappointing, although he thought doing the super consolidation was a good idea, he still didn’t think that he needed any other insurance.
It is not amazing that most people are willing and do provide for their families when they are alive, this is who we are as humans and it is what we do. It is the nature of things. What is truly staggering though is that so many people still fail to provide for their families once they have passed away.
In the end, the choice is always ours, we can ensure our families are well cared for financially once we are gone, or we can fail them, leaving them at a time of sadness and distress with a financial burden that could so easily have been avoided.
Unfortunately, financial literacy still isn’t a staple part of our education system, and until that time comes, people will continue to struggle with Credit.
Want to finally understand how credit can work for you?
If you can actually afford to borrow?
Want to know how to find out if the people you’re dealing with are reputable?
What options do you have if things go bad and you can’t pay your debts?
Where can you turn to complain?
Download the MoneySmart brochure here and start investing in your financial literacy. Learn tips on credit cards, car loans, rent to buy schemes and mortgages.
Isn’t it time you took the challenge today to get a handle on your finances?
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