-Redundancy
-Accident
-Illness, mental
-Illness, physical
-Early dementia or Parkinsons disease
-Death of your spouse
-Key staff illness or accident
-Economic downturn
-Poor produce prices
-Imported diseases
-Earthquakes
-Floods and droughts
-Rising interest rates
-Fire or storm
-Sharemarket crash
HOW WOULD ONE OF THESE EVENTS IMPACT ON YOU?
Spend a few minutes thinking about each of them, the impact it might have, and how you can plan ahead to mitigate it.
THIS IS CALLED RISK MANAGEMENT
Many old pilots will tell you about Murphy's law - "What can go wrong will go wrong."
Not entirely true.
If and when you get organised, and do a bit of (pre-flight) forward planning, less things seem to go wrong and you are much less likely to get cleaned out entirely.
YOU CAN PROBABLY SAVE SOME MONEY, TOO
The three main insurances keep rising as you get older, and very quickly once you are over 55.
You should review them, and you will find you probably should reduce them, too.
Life insurance: Calculate it - how much cash will your spouse need if you die? For example, final expenses, on-going income required, mortgage and debts to be paid, and more.
Medical insurance: It will cost about $200,000 if you keep it until age 90. Should you cancel it? Read my book (details below).
Income replacement:If you can extend the deferral period to 180 days or even longer, the premium will come down.
SOME RISK MANAGEMENT TOOLS YOU MIGHT USE
-House insurance
-Contents insurance
-Car insurance
-Excess debt, attend to it
-Liquid emergency money on hand
-Valid wills
-Retirement planning attended to
-Enduring powers of attorney
-Business partnership agreements
-Valid leases
-All loans you have made fully documented
-Diversification of your assets
-If in doubt, do half
-Self employment, you can't be made redundant
A FEW OTHER THINGS
If in doubt, get unbiased advice from someone outside your family and friends, ideally a professional. Review things annually. Before doing anything big , always do a "rose coloured glasses" list and a "what can go wrong" list, and heed the result.
TWO ISSUES FOR SMALL BUSINESS OWNERS
Retirement planning - sometimes businesses sell well, sometimes they don't. Unless you are really sure it will sell well, divert some money and invest it elsewhere. Do an annual SWOT - strengths, weaknesses, opportunities, and threats - analysis: it might be quite revealing. It may also help you gain a new perspective and "see your business from the outside", which can be very hard to do.
BOY SCOUTS
Ever noticed how your cellphone battery is nearly flat when a problem crops up? Be like a Boy Scout and "be prepared".
