Today’s Prep:
In order to keep safe, we’re all practicing social distancing right now. With your finances, are there some areas that need a little bit of space between them for safety and protection? Let’s run through four examples of social distancing in your financial plan.
(Click the featured times below to jump forward in the episode)
Equipping Points:
Social distancing, a term none of us had heard a mere month ago, is now part of our everyday lifestyle. When it comes to your finances, should you be doing some social distancing there, too?
For starters, consider your emergency fund and the stock market. These two things should not be mixing and mingling! Emergency funds are important to have in case of emergency and need to stay in a savings account that is easy to access and kept safe. Understand the separation between the two.
Life insurance and your investments are two more things you’ll likely want to keep apart. Eric talks about variable life insurance policies and how to use them the right way. Investments are investments, whereas insurance is protection. Then, when it comes to your high turnover investment strategies, are you keeping them separate from after-tax brokerage accounts?
Finally, you’ll want your emotions and your investment decisions to have some space from each other. Between the news and the fear caused by many unknowns right now, your emotions may seep into your investment decisions. Having an advisor to help guide you through a logical decision that aligns with your plan may save you some heartache later on.
Listen to the full episode or click on the timestamps below to find out more about which items need to stay separate.
[1:00] – Which items should social distance from each other in our finances?
[1:08] – Leave your emergency fund out of the stock market.
[3:33] – Life insurance and investments should not go hand-in-hand.
[5:46] – High turnover investment strategies should not be with after-tax brokerage accounts.
[7:40] – Your emotions and your investment decisions need some space between them.
Related Resources:
Facing The Final Decade Before Retirement
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