What parts of this ship are actually worth insuring?

• ...from what I've many times seen, people tend to not insure for all the catastrophes that they should. They may insure their iPhone, but not their lives, for example. (05:29)
• Disability insurance on the other hand, because you are actually much more likely to be disabled than you are to die as a young person, it can be a little bit more [expensive]. But again, you can kind of tailor it any way you want. (06:38)
• And the line that I always share with young people is, and this is the one that motivated me, if I was to die today, is the relative that would be the loudest and the most convincing in a courtroom, would that be the person I would actually want to raise my child? (07:55)

Quote for the episode: "Understand that there is insurance for almost anything, but this general concept of catastrophe versus inconvenience, can help you know what is worth insuring what you have absolutely have to insure like your life, or your income potential." (08:40)

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Welcome to the EnjoyMore30s Family Finance

podcast. The only podcast dedicated to making life more

enjoyable for young families by hitting on the financial topics

that tend to weigh on us, stress us out, and distract our focus

from simply enjoying life.

Hello, and welcome once again to EnjoyMore30s

Family Finance podcast. Every week, I'm here trying to talk to

you about money so you can take those steps forward, gain that

confidence and therefore really remove that financial anxiety

that you may be having so you can focus solely on making your

life more enjoyable to you and to your family. This series is

all about the new year, and the new you along with that, Setting

Your Compass for the New Year.

As always, if you like what you're hearing, please make sure

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Clicking that star, leaving those reviews, it really really

does help us reach the other of millions of other young families

out there that are just like you.

So far this season, we covered setting your compass with your

spouse. So pretty much joint goal setting, then we discuss

the importance of actually paying yourself first, you know

giving some of that hard earned money to yourself each month to

reach the goals that you would actually want to to make you

happier. And then we covered bucketing your goals. So setting

separate accounts for each goal. That way you can easily track

them, you can more easily achieve them. And then the next

episode was kind of an extension of this with what I call money

blocking. So again, setting funds aside, but this time is

setting them aside for kind of those smaller daily things that

monthly massage, kind of things like

that. Finally, last week, reaching the importance of using

the right fit for each investment. So we've got those

buckets, but we want to make sure we're using the right

investment for each one. Too conservative may mean not

reaching your goals. So if you've missed any of those

episodes yet, I would definitely obviously recommend you check

them out soon.

Today's episode is titled Insure For Catastrophe, Not

Inconvenience, exclamation point where we are going to cover the

mentality that I would recommend when looking at which pieces of

this trip we're designing are the most important to insure.

What parts of this ship are actually worth insuring? So the

goal for today's episode is to understand that there is

insurance for pretty much anything that you want to buy

insurance for out there. But this general concept of

catastrophe vs inconvenience can really help you know what is

worth insuring, and what maybe isn't. When you think of all the

parts of this ship, there are some that are just going to be

more important than others. But you may be able to get insurance

if you really wanted to on any of them. That doesn't mean that

you should. Insuring the hull of the ship, for example, though,

is much more important than say insuring one of the nails on the

ship. If the hull breaks, we're kind of in a big problem, though

the whole ship is pretty much worthless, the journey is lost,

you know, we don't want any of that to happen. If one nail

comes out, comes loose, breaks, that ship keeps on going. And

you can afford to put in another nail.

If you think of your daily life, there are certain insurances

that everybody has. Homeowners insurance, for example, you

cannot have a mortgage without having homeowners insurance. The

bank says you really need to have this because if the house

burns down, we don't want to lose our investment our loan

that we made to you. Now generally, it might add, say,

you know, $100 a month to your your budget, something kind of

like that. So it's something that's affordable, you know, we

don't enjoy paying for it, but it's affordable. If they didn't

make you get homeowners insurance, though, if they

didn't make me specifically get it, I would still 100% have it.

The reason is because if my house God forbid, burned down, I

don't have $400,000, sitting to the side to you know, rebuild my

house in the next week or whatever it might actually cost.

That would be a catastrophe that would basically ruin my family

financially. On the other hand, I can get insurance for

somethings normally in the form of an additional warranty or

something like that for let's say, my washing machine. But I

don't know if my washing machine goes, it will be annoying. I'll

be kind of irritated. I'll have to buy a new one. But it's not

going to ruin me by any means financially. I can come up with

a few 100 bucks if I have to, you know and getting a new

machine. It's an inconvenience, not a catastrophe. Now, if you

want to get insurance for your washing machine, that additional

warranty you can but the point is that there's a difference

between insuring things that if you get the insurance or not,

you know, it's going to be okay either way. First things where

if you don't have the insurance, it's going to be a catastrophe,

and you may be ruined financially. So this is a big

deal, if you don't have the proper coverage. Cars can be the

same way we have to get the insurance, but don't need to buy

the additional warranties. So if you again, if you had the

financial flexibility, the additional warranty makes you

able to sleep at night. Sure, you know, go ahead and get it,

that's your call. And sleeping at night is you know, that's

important. But as a rule of thumb, you again want to just

really make sure that you're insuring for those catastrophe

scenarios at a minimum.

And the thing is, from what I've many times seen, people tend to

not insure for all the catastrophes that they should.

They may insure their iPhone, but not their lives, for

example. Homes, cars, those are easy, because they make you get

the insurance, you don't have a choice many times. They don't

make you get life insurance, they don't make you get

disability insurance. And as a young family, dying or becoming

disabled, you know, they're not on your top of your list to

think about, but both of these kinds of things are protecting

your greatest asset. The most important asset that you have as

a young person, and that is your future earning potential. So

over the next 30 years, this is likely to add up to millions of

dollars. Life insurance is really the easier of these two,

because as a young healthy person, you might be able to

get, say a 30 year term insurance policy that has a

value of 1 to $2 million or more and not have to break the bank

financially, it depending on where you live your health, you

know, it could be maybe $100 a month, you know, in that kind of

just very, very rough general range.

Disability insurance on the other hand, because you are

actually much more likely to be disabled than you are to die as

a young person, it can be a little bit more. But again, you

can kind of tailor it any way you want. If you want to say you

know have to wait for six months for the cover to to kick in

instead of three months then it's cheaper. So like in New

Jersey, the state provides you with some short term disability

for this first six months. So that makes sense for somebody

living in New Jersey, that that kind of thing. But again, we're

focusing on the catastrophic. If you can't work for three months,

you know, it would kind of stink, wouldn't be great. But

you're likely to recover for that. If you can't work for 2

years, 5 years, 10 years, that's a really big problem. So there's

that catastrophic scenario kicking in again.

The last catastrophic kind of thing, which isn't exactly

Overall, there are a ton of times that you come across

insurance, but it's an add on that I really want to put in

here is that we see way too many young families with kids that

don't have a will or their other important legal documents. So

who will raise your children? Who will be in charge of their

insurances, warranties, things of that nature, that you can

finances? These are huge decisions. Is getting a will

fun? Absolutely, 100% not, you have to think about yourself

dying, not fun, but it's very, very necessary. And the line

that I always share with young people is, and this is the one

buy, and we can't cover all of them here today. But just

that motivated me, if I was to die today is the relative that

would be the loudest and the most convincing in a courtroom,

would that be the person I would actually want to raise my child?

So more times than not when I say this to a young family, I

see very anxious faces and you know, looks going back in

remember this higher level concept to help you in that

between the you know, the husband and the wife. So, you

know, this is something that motivated me, and I've seen it

motivate other people as well.

decision making process. Understand that there is

insurance for almost anything, but this general concept of

catastrophe versus inconvenience, can help you know

Thanks for tuning in today, as always, and join us for next

week's episode called Diversify, But With One Advisor, where

we're going to cover some very important differences between

what is worth insuring what you have absolutely have to insure

diversification vs having multiple advisors. And why you

don't need the latter, the multiple advisors to have the

former diversification. Again, a fancy way of saying spread out

your money well.

Overall, if you are able to implement what we cover today,

like your life, or your income potential. And what you know,

that's great. That's fantastic. You have less to worry about

than before and you can focus more on just really enjoying

your life. If you are wanting help with these things though,

always remember that feel free to reach out to me ask

questions, check out my website, www.enjoymore30s.com. That's

maybe isn't necessary, like you know, the washing machine.

enjoymore30s.com There's an Ask Joe section on there. Shoot me

an email and just reach out I'd be happy to help any way that I

can. Until next week. Thanks for joining me today and I look

forward to connecting with you soon.

The conversations on this show are

Joe's opinions and provided for general information purposes

only. They do not constitute accounting, legal, tax, or other

professional advice for your specific situation. You should

always seek appropriate advice from a financial advisor,

accountant, lawyer or other professional before acting upon

any content or information found here first. Joe is affiliated

with New Horizons Wealth Management LLC, a branch office

of TFS Securities, Inc., and TFS Advisory Services an SEC

Registered Investment Advisor, Member FINRA/SIPC.