Vey few people believe a catastrophe will happen to them.Very few of us protect ourselves for such catastrophes. But when something bad happens, we realize how badly prepare we were. Before you go out and buy something nice you did not need, or click the mouse and ordered something to clutter your home, ask yourself if you are ready for an eventuality. And if the answer is no, then prepare yourself by reading the articles below.
Owning stocks can provide serious earning potential, but Jim Cramer considers it just one piece of the investment puzzle.
“There are some people, call them the 1 percent if you will, who can make enough money from their ordinary day-to-day income to become truly rich. But for the vast majority of Americans, that paycheck is simply not enough,” the “Mad Money” host said.
The key to capital preservation is knowing the importance of saving money and preventing loss. Without this, don’t even think about investing in stocks, he said.
The three keys to success in capital preservation are paying off credit-card debt, having health insurance and getting disability insurance. Without these things crossed off the list, investing just doesn’t make sense.
You need enough insurance to cover the following:
- The structure of your home.
- Your personal possessions.
- The cost of additional living expenses if your home is damaged and you have to live elsewhere during repairs.
- Your liability to others.
You need enough insurance to cover the cost of rebuilding your home at current construction costs. Don’t include the cost of the land. And don’t base your rebuilding costs on the price you paid for your home. The cost of rebuilding could be more or less than the price you paid or could sell it for today.
Some banks require you to buy homeowners insurance to cover the amount of your mortgage. If the limit of your insurance policy is based on your mortgage, make sure it’s enough to cover the cost of rebuilding. (If your mortgage is paid off, don’t cancel your homeowners policy. Homeowners insurance protects your investment in your home.)
Natural disasters and other catastrophic events are not fun to talk about. But ignoring the need to insure against catastrophe doesn’t decrease the chance of them happening to you. When (let’s say if) they actually happen to you, it is much more devastating if you don’t have the right insurance coverage.
Homeowners insurance is essential. It is designed to protect your home and possessions. It also shields you from liability for accidents and such. You may think you have already had the discussion with your agent and have no need to examine the risks and coverage each year. If you think this way, carefully consider the many reasons why you need to think again.
1. Your Risks Have Changed: You may be paying for insurance you no longer need. On the other hand, you may need more coverage based on your current life. For example, do you have coverage for the current value of your home. Most homes in our area have gone up in value in recent years. If something happens, insurance based on what you paid will fall short of what you need.