What Is Your Largest Asset? (It Might Not Be What You Think)

Last week I had my annual physical. While my doctor was performing my check-up, she asked me a great question about my job. She asked, “What is the biggest mistake you see people make with their financial planning?”

Without hesitation, I answered, “People don’t protect their largest asset.” The reason why is simple: they don’t realize what their largest asset really is.

What do you consider your largest asset? Most people think their home, business, or investment accounts are their largest assets.

They’re wrong. If you work for a living, your largest asset is the ability to earn income.

If, God forbid, you pass away or become disabled and can no longer earn income, will your other assets be enough to take care of you, your family and everyone else relying on you? Would your spouse and children be forced to leave their home? Would your children still be able to attend college someday? Would your employees be out of a job?

I have watched a widower forced to sell his family home and move his children away from everything they know and love. I have seen young people forced into full-time jobs instead of having the opportunity to continue their education. I have watched businesses go under and relationships severed because the partners did not protect each other in the event of death or disability.

My doctor would never issue me a prescription without first examining me. I choose not to manage assets without making sure my clients have sufficiently protected their ability to earn income.

If you have not had an independent professional review your life and disability insurance lately to determine if it’s sufficient– or worse, if you do not have life and/or disability insurance– I encourage you to revisit and reprioritize your plan.

So much of what we hear today is focused on saving for retirement which is, of course, important. But don’t forget to plan for what may happen before you reach retirement age.

You get your health physical every year. Treat this with the same diligence and find an independent advisor to give your financial planning a physical as well. If you need a financial planner in Charlotte, we’ll be happy to help– contact us to schedule a confidential consultation.

Just don’t put it off– when it comes to your finances, an ounce of prevention really is  worth a pound of cure.