Asset 2

Keep some money in your investing budget for insurance

When you’re starting out on a financial journey, it’s natural to want to aim for the things that give you a payoff quickly.

You might want to invest in shares that could quickly shoot up in value, or funnel all of your available money into buying an investment property so you can call yourself a landlord and start pulling in rent.

By doing this though, depending on your circumstances, you may miss a key foundation step, which can catch them out in the long term. Here’s why investing in Insurance makes sense.

The importance of protecting your financial future

While getting good personal insurance policies in place may not be as much fun as buying a stake in an up-and-coming company and seeing its fortunes soar, it can be a vital part of your wealth plan. As you focus on creating your financial security, it’s also important to protect it from life’s curveballs and – depending on your situation – these are some types of insurance to consider.

Income protection

This is a big one. Many investment strategies require part of your current income, either to service debt or pay for the investment asset. If something happened that meant you no longer had your normal stream of income, you might have to sell the asset – with little choice over what the market was like when you did so – and could end up starting from scratch again.

Income protection gives you a buffer so that you can keep your plans on track, no matter what happens.

Life insurance

If you’re investing with a goal to help your kids in the future, you may want to take out life insurance to ensure it happens. Without it, your family could end up having to use all your hard-won investment assets to keep themselves afloat if you were not around.

If you’ve got an investment strategy that won’t yield returns until some point in the future, it’s even more important – future riches won’t take care of your family if they need help now.

Emergency fund

This isn’t one that an adviser can help you with but it’s important just the same. Complementing your cover with an emergency fund can put you in an even better position, so that if you’re off work or not earning for any reason (not just the sickness or accident that your insurance will cover you for), you still have money to rely on before you think about tapping into your investments.

Plus, an emergency fund can also be useful if you spot other opportunities you wish to take along the way.

Want to chat?

We’d love to help you protect the pillars of your financial life. Give us a call today to get the conversation going.


Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.

Schedule your free
15-minute phone call

Please book in your free 15-minute phone call to see if we can help you with your financial life.

Choose your time