Because you work hard for your money, you want to make sure it is protected and will be available when you want it. Having your assets insured is a sound financial practice, and it is imperative that you have a financial plan in effect if you hope to protect your cash. There are at least as many ways to lose money as there is to make it. Once you have it, you need to insure and protect your financial assets. Following are a few tips on how to do that.
Credit Rating
For most people, there is a need to have a good credit rating in order to have a sound financial portfolio. Unless you’re independently wealthy, you will undoubtedly need to borrow money now and then in order to have the working capital to expand your enterprises and make more money. That means you will need a good credit rating, and when you work hard to establish a good credit score, you need to make sure it remains that way. One way to do that is check your credit report often and make sure there are no errors or fraudulent entries. If you notice something amiss, you should bring it to the attention of the credit bureau immediately so appropriate steps can be taken to correct the problem.
Diversify
One way to make sure you will retain as much of your assets as you can is to diversify your portfolio. A simpler way to say that is, ‘don’t put all your eggs in one basket.’ Both statements mean the same thing: spread your money around so it’s not all tied up in the same thing. If you have a large number of shares of an automobile stock, make sure you also stick some money into real estate. That way if the bottom falls out of the market and your stock become worthless, you will still have a portion of your wealth in real property. An even better way would be to buy different kinds of stock so if one stock drops significantly you will still retain a portion of your investment. Instead of buying 1,000 shares of auto stock you could spread it around and buy 100 shares of 10 different stocks. It would be very unusual if they all dropped at the same time. Consulting a professional financial planner or stock analyst could help you come with a plan that will suit your purpose of financial diversification.
Carry an Adequate Amount of Insurance
If you want to be absolutely sure you will never suffer a devastating financial loss, you have the option of taking out an insurance policy on your tangible assets. Whatever you own can be insured against loss or theft. It doesn’t matter what it is, if you’re willing to pay the premiums you should be able to find a carrier that will write a policy. If your present policy won’t cover all your assets, you could take out an umbrella policy to cover what your traditional policies don’t. When you sit down to figure out how much coverage you will need in an umbrella policy, don’t forget to include such things as artwork, the value of your homes contents, and your retirement accounts. All of these are tangible assets and should be protected.
Retirement Funds
If you’re smart, you will have begun a retirement fund at the beginning of your career. If you ever have to change jobs make sure those funds go with you. Money from a 401k or an IRA is a valuable asset that should be protected. Make sure the institution that handles those funds is insured by the Federal Deposit Insurance Corporation (FDIC.) The FDIC recommends that you don’t keep in excess of $250,000 in your checking, savings, or retirement accounts in any one bank. Instead, you should spread the money around to a number of financial institutions so if one fails the rest of your money will be kept safe.
Guest post from Jessie Mars. Jessie writes about cheap insurance quotes for InsuranceQuotes.org.
