Hey everyone, my apologies for the huge lapse of time between my last post. No excuses here, just hadn't gotten to it and then I allowed guilt of being so late to kick in for another couple weeks and hold me off! Procrastination is definitely an issue when it comes to things that are not "required" on a daily basis if there are other things to do (and who is anyone kidding, when isn't there other things to do?)!
Speaking of procrastination, that brings up a nice topic I feel should be shared and discussed! As every one of us has heard, I am sure more than once, one big key to a strong financial future is starting as soon as possible, and I don't think they mean after buying everything you want, but as soon as you start making any money, to budget it and begin to utilize it as a tool for your future. I find this fact best illustrated in this recent newsletter I recieved regarding kickstarting your financial future, best depicted by this point:
Your assets grow through compounding – It may seem basic, but it's worth repeating – investing early makes it possible for you to double your money several times in your lifetime, thanks to the power of compounding. The longer funds are left to grow, the greater the result. To accumulate $1 million by age 65 (with a 7 percent rate of return), a 25-year-old investor could save $381 per month, while a 35-year-old would need to save $820 a month, a 45-year-old would need $1,920 a month and a 55-year-old would have to put away $5,778 a month to reach the same amount.
Now, this is a very obvious way to see that by procrastinating can be an expensive direct cost to you and your family, such as waiting the ten years from 25-35 will cost you over $110,000 more to reach the $1 Million dollar mark, now that is quite a penalty for waiting and is easily visible as a direct expense to you.
Now think about this, what if at age 25 you begin to save that $381 / month and are doing this faithfully to age 40, when tragedy strikes and you accidentally run a red light because the sun is in your eyes and you cause an accident in which 3 people perish. The average cost of a fatal crash is just over $1 Million / per fatality, and now you are responsible for $3 Million in liability damages. Do you have the proper insurance in place to protect you and your assets or will your financial security now be taken from you indirectly as a result of not being correctly insured? (I know in your mind right now you are thinking that this is a harsh way to prove a point.) I, in no means want to use scare tactics to prove a point, but do want you to understand that accidents happen, and if this were the case, would the auto insurance you have protect you and the assets you have worked so hard to build?
I am not saying it won't, but from experience, if you aren't sure that it will, you should have someone take an evaluation of your insurance for you. Even if you haven't started saving towards that $1 Million, it is important to have the right security in place. Don't procrastinate getting this done as accidents happen everyday and being improperly insured can create insecurities where you were sure you were doing the right thing and building your financial future. Please, share your thoughts on this topic and whether or not you know you would be protected in this type of situation.
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