True wealth is more than what you earn; what you retain and maintain also matters. Proper insurance coverage helps by protecting your assets from risks that can subtract value or cause costly harm. But do you have ample coverage? High net worth individuals often don’t. Many experience an insurance gap and require attention that’s above and beyond the scope of traditional mainstream products.

Umbrella Coverage for Reduced Liability
Sometimes those with significant wealth can be attractive litigation targets, even after less severe situations like a simple fender bender. Consider adding another layer of protection with an umbrella policy. This additional coverage picks up where your existing insurance leaves off to give you extra security and peace of mind.

Extensive Coverage for Real Estate
Whether you monetize them as rental homes or enjoy them as vacation getaways, having multiple properties in your portfolio can pose unique complications when it comes to homeowners insurance. Review your situation with a fine-toothed comb to properly insure personal property, and keep in mind that high-dollar items, like jewelry and art, may require additional endorsements.

Individualized Attention to Insurance Needs
Sophisticated asset protection may require different types of coverage. If you’re working directly with an agent who’s beholden to a single insurance company, you may be missing out on better, more protective alternatives from other insurers. An independent personal insurance manager can pick and choose policies from multiple insurers to get you coverage that’s customized to your needs.

Just because you’re adept at acquiring assets doesn’t mean you’re as savvy when it comes to protecting them. Choosing the right policies to insure your property will help guard your net worth against unexpected drops in value due to accident, theft and more.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

When unexpected or worrisome financial news hits, what do you do? Constantly checking your portfolio can derail you from long-term goals, while having zero awareness of your finances can lead to reckless overspending or other bad behavior.

Information travels faster than ever these days, and it’s easy for investors to feel alarmed or panicked about finances when they read the headlines. Get a handle on financial anxiety with a few helpful strategies.

  • Start to see others’ fears as opportunities. When the markets go down, investments can lose value and appear on sale. That’s when some say it’s time to buy rather than sell. Whatever you choose, zoom out on S&P 500 charts to get some perspective and look at the long-term picture.
  • Revisit your goal-based investment plan regularly but not necessarily in response to world events. Sometimes all it takes is a check-in to remember why you have a particular portfolio set up just so. If changes must be made, consider timing them with significant life events like a birth, death, career move or change in marital status.
  • Begin incorporating mindfulness techniques and meditation into your daily life. Not only are these practices ideal for reducing anxiety and stress, which can lead to larger health conditions that are expensive to treat, but they can also improve cognition and concentration.

With the potential for more volatility on the horizon as markets tend to fluctuate during presidential election years, there’s no time like the present to practice taming financial anxiety with the above suggestions. Employing thoughtful techniques can help you stay balanced and on track, both mentally and financially.

The information provided in Eddleman’s Economic Insight is not intended to be used as investment advice; rather it is provided as general economic news and information for your awareness or for discussions with your investment professional. Please consult your investment professional or CPA for advice specific to your situation! Past performance is not indicative of future results.

When it comes to investment risk, two facts are true for everyone! Everyone takes investment risk, but risk doesn’t necessarily mean additional return. You might be saying to yourself either, “I don’t take investment risk,” or  “I like risk, it means more return.” Well, I’m sorry to say it, but if you are either person, you’re wrong. Now, before you become defensive, please let me explain.

First let me address those of you who think you don’t take investment risk. The fact is that if you have any money (or possessions), you take investment risk. There are many types of risk associated with money and possessions that people do not consider. If you say, “I don’t invest! I purchase possessions.” You incur devaluation risk. If you say, “I don’t invest! I put my money under the mattress.” You incur inflationary risk. If you say, “I only use certificates of deposit that are FDIC insured.” You incur Interest Rate Risk. If you say, “I only use government bonds.” You incur Reinvestment Risk. The point is regardless of how safe you think your money is, you are taking risks if you have any money or possessions anywhere. The fact of the matter is that life involves risk. If you are alive, you have taken risk, you are taking risk, and you will continue to take risk in all areas of your life including money. Let’s look at a few different parts of life to draw some analogies. Relationships. If you believe you don’t incur risks in your relationships because you refuse to have any, you take on a whole new set of risks. For example, you risk growing old alone. Transportation. You refuse to fly in a plane because you believe they are dangerous. Consequently, you take on even more risk by driving long distances and increase your chances of having a car wreck.

Perhaps you’re the person who believes that risk equates to reward. You must understand that all risks are not created equal. Regulatory Risk, Business Risk, Call Risk, Currency Risk, Market Risk, Liquidity Risk, Event Risk, Opportunity Risk (Cost), Political Risk, Operational Risk, Prepayment Risk, and those previously mentioned are just a few of the types of risk that exist. There are numerous risks that you may take for which you are not compensated, and there are other risks that you may take for which you are more likely compensated. Let’s look at some more analogies. Relationships. You only date persons who have a history of lying, but taking on this risk will not reward you with better relationships. Transportation. You understand the driving with no brakes is dangerous, so you disconnect the brakes to your car in hopes of getting to your destination faster.

These analogies may seem silly, but hopefully they help you to understand that every individual takes risks with their money and that all investment risks do not have an expectation of return. Over the next several weeks we will explore some of these investment risks so that you can make more informed decisions about investing your money!

For more information on investing, visit our financial planning page.