If you planned to jump between trapezes or walk a high wire, you wouldn’t even begin until you saw a net securely in place. No one wants to think about falling, but your net would catch you safely if you did.
Reaching your money goals is no different. It’s essential in your journey to Financial Freedom that you prepare for the unexpected.
You need a Safety Net.
Identify Your Safety Net Gap
Remember the story of Goldilocks and the Three Bears? Goldilocks wanted the perfect bowl of porridge. She invested time in assessing her options and consciously choosing what was “just right” for her.
We can learn a lesson from Goldilocks. Before you start shopping for insurance, take inventory of your family’s financial situation and crunch your numbers. Module Four of Financially Fit Bootcamp includes a Safety Net calculator perfect for this assessment.
The calculator helps you tackle the following three questions:
- How much money would you need to feel Financially Secure in the event of a lay-off, health crisis or other catastrophe? This is your safety net.
- What’s your ability to “self-insure”? That is, what financial resources do you currently have in place?
- Finally, what’s your “safety net gap”?
When you’ve built your Freedom Generator, you’ll have closed that gap entirely and created an impenetrable wall of self-insurance around your family. In the meantime, you’ll need to outsource the coverage of that gap to someone else.
That’s where finding an advisor and purchasing just the right amount of insurance come in.
Choose The Right Advisor
Goldilocks didn’t let a commissions-based advisor or insurance agent sell her a Papa Bear-sized bowl of porridge, and neither should you. Once you’ve calculated the value of your safety net gap, you’re ready to find a professional who can connect you with the tools and resources to fill it.
Dr. Tony is the co-founder of MindShift.money and the best-selling author of three books on personal and business finances. Having achieved Financial Freedom at 27, Dr. Tony believes that through Financially Fit Bootcamp and Cash Flow Cure everyone can get there. He has made it his life’s mission to help others live a life where their money works for them—not the other way around.