Your ability to earn an income is your greatest asset

« Back to “Personal Financial Planning”

What is your greatest asset? Most people think it is their house or bank account. They are wrong. For the vast majority of people, the greatest asset they have is their ability to generate income. Think about that for a moment… How does the bond for the house get paid? How does that bank account get filled? How do you repay debt, fund retirement and investment accounts, or pay for food, school fees, clothing and other life essentials? Unless you are independently wealthy, you work to create this income.  Yes, there are some who have reached the crossover point with their investment portfolio (the point at which their investments earn more than they do at their day job), but for most of us, this will only be when we retire at 60 or 65.

What is your real net worth?
Your net worth (assets minus liabilities) has a different meaning depending on where you live and your stage of life. Knowing your net worth can be good as a checkpoint, but it can’t predict the future.  Nor does it measure your greatest financial asset – the ability to generate income.  It also doesn’t take into account your future income earning potential, which is particularly important for people whose income will increase faster than inflation, such as young people, business owners and professionals.

Why is it important to insure your greatest asset?
Your income probably looks after your family, your home, your car – even the cats and dogs. So what if something happens to you and you can no longer work? Because your income is your greatest asset, it’s important that you protect it as well as any potential income you may still earn.
If you think you’re too young to worry about this now, think again – your income at the moment not only determines your life right now, but also your future. Of course, you must go out and enjoy life, but when you have some time think about what it is that you want from life. You certainly have dreams and aspirations, what about owning your own business, or travelling to exciting destinations?   You need an income to do all that. If you have a family, you are not only concerned about losing your income, but also about how this will affect the future of your entire family.

Income Protection – insure your income when you cannot work due to accident, injury, illness or disability
With Income Protection cover, you will never need to put yourself or your family through the stress and anxiety of worrying about how you will keep up the payments on your house, cars or school fees.  Instead you can focus on your health and getting back on your feet again.  Premiums are tax deductible, and benefits are paid as long as you remain off work.  In the event that your injury or illness becomes permanent, benefits will be paid until your selected retirement date.

Your income really is your greatest asset, – don’t hesitate to get in touch with me should you wish to discuss the different Income Protection options available to you.