Published September 2007

Ten Feet Tall and Bulletproof?

By Ted J. Rulseh (page 10)

There’s no preventing the hard knocks life can throw your way, but with the right steps in financial planning, you can mitigate some of the worst effects.

Well, I start to feel like Superman, then I pick a fight
Only to find that my opponent’s holding kryptonite
You’d think I’d learn my lesson, but I’m still paying dues
Each time I drink and start to think
I’m ten feet tall and bulletproof

Those words are from a country song by Travis Tritt. I thought of them while reading this month’s Money Manager column on the importance of disability insurance.

That subject, believe it or not, has something to do with becoming bulletproof, financially speaking — at least as bulletproof as it’s possible to be in this world.

Life makes us no guarantees. At any stage, things can happen that are devastating to us and to our loved ones, as well. We can’t prevent those tragedies, but we can in many cases mitigate their effects. I’m talking about insurance and financial planning.

Those left behind

Many of us, especially when we’re young, walk around thinking we are “ten feet tall and bulletproof.” And yet we’re vulnerable to all manner of calamities: premature death, a crippling accident, a serious illness. What happens to us is bad enough; what makes it worse is that our families feel the effects, too.

No one wants his or her disability or death to leave a family struggling or destitute. Yet it can happen if we don’t prepare.

Few of us relish the thought of talking to an insurance agent or financial advisor. The conversation can be troubling — and in fact it should be if these professionals are doing their jobs well. The issues are serious; the questions are tough.

What’s more, it’s hard to contemplate financial planning when it’s a challenge just to keep the business running smoothly, and when you’d like to take some of the fruit of your labor and apply it to something you’d really enjoy, like a nice family vacation, a boat, a remodeling job on the house.

But talk we should, and plan we must. As we build businesses or careers, there are basic things we need to take care of before we attend to pleasures — if we’re going to call ourselves truly responsible.

Seeing the positives

Here’s a different way to look at financial planning issues. Instead of thinking about what-ifs in terms of doom and gloom, let’s think of them in terms of how the world looks if we’ve done things right. Put yourself in each scenario and see how you feel.

1. If I should die, my spouse and kids will be able to stay in the house where we now live. Their lifestyle will not change. They’ll have nice clothes and a nice car. They’ll be able to go on vacations just the way we do now. My spouse will not be forced to keep a job solely to help make ends meet. The kids will have ample money for college, if they want to go. All this is possible because I own enough life insurance.

2. If I should become disabled, our family life will not be knocked off the rails. There will be enough income to see us through my recovery — or permanently if that should be necessary. Again, although life may not be as good as before, at least we will not suffer financially. This is possible because I own enough disability insurance.

3. If in later years (or, heaven forbid, before I get old), I need nursing home care, the cost of it will not bankrupt my spouse — nor will I be bankrupted if my spouse needs such care. We will be able to afford the kind of quality care we would want — not just the cheapest place in the county. This is possible because we had the foresight to purchase long-term care insurance.

4. My spouse and I will never wake up one day to realize that we are not prepared for retirement. When we reach our planned retirement age, we will have choices — to take up a second career if we wish; to travel; to volunteer in the community. We will not be forced to cut back our lifestyle dramatically; we will not be forced to take jobs just to pay our bills. This is possible because we are steadily building a fund whose size is based on the way we expect to live in retirement.

How does it feel?

Those aren’t the only financial issues to be faced. People who own businesses have special concerns about how a major life event would affect the companies they have spent years building. But how does it feel to put yourself inside those scenarios? Does it make you feel just a little bulletproof?

If so, you can make the scenarios real by talking to the appropriate financial professionals. The sooner you do it, the more certainty you can buy, and the less per year it will cost.

A story is told about a king who, upon taking the throne, told his chief servant, “Right there, along the edge of my estate, I want a row of oak trees.”

The servant said, “But your majesty — it takes fifty years to grow an oak tree.”

The king replied: “Then there’s no time to lose — plant them immediately.” Perhaps now is the time to start planting the seeds to secure your financial future.