Video Wealth Health Tip 05 - Insurance
This is John Buerger, CERTIFIED FINANCIAL PLANNER™ professional and Wealth Coach with another Video Wealth Health Tip.
We try to keep these both fun and simple ... because complicated is overwhelming and makes it so people don't want to watch. Sticking to the big picture really helps here and our last Video Wealth Health Tip was the ultimate in "big picture."
We talked about the money game and the three basic elements: offense, defense and celebration.
This time we're going to focus on the defense: protection, keeping more of what you've already got ... basically insurance. You'll find that as you grow older, insurance becomes more important mostly because there is more to protect.
Now insurance is (technically speaking) pooling small amounts of money from millions of people in order to build a reserve and protect against rare but catastrophic losses by a few. Insurance is a concept that was originated back in the 17th and 18th centuries in the days of the sea merchants and their nemisis the sea pirates.
One of the natural rules of insurance is that trying to protect yourself from small, everyday losses is much more expensive than trying to protect yourself from much larger but much more rare occurences. The reason for this is that the insurance companies are taking on the risk and the more risk they take on, the more they want to be paid.
A perfect example of this is healthcare. In this country we really don't have Health Care Insurance. Instead we have Health Care Pre-payment Plans. You're going to go see the doctor anyway and all those doctor visits and everything else will likely add up to hundreds if not thousands of dollars every year.
But what you're doing is paying thousands of dollars to the insurance company each year in order for them to pay those bills for you - This is health care pre-payment, not particularly efficient and grossly ineffective and one major reason why health care costs have skyrocketed.
Your Video Wealth Health Tip has two parts this time. The first one is "Protect What You Already Have." Remember that the best offense is always a good defense.
The second part is: "Insure only against the big losses that happen rarely and keep around cash reserves around to cover the small, everyday losses that you're going to be paying anyway. This will save you thousands of dollars each and every year.
Remember, "Get Control Over Your Money BEFORE It Takes Control of Your Life!" This is John Buerger with ALTUS Wealth Solutions. Thanks for watching.