A house can never be built without putting up a foundation to which it can stand on, or else a storm can just wash it away without warning. A business can never be set up without laying out the fundamental principles guiding the endeavor and every other factor that needs to be ruled in order to build it. A student may never be able to pass the exam without executing the most basic guideline in answering it - follow instructions.
In personal finance, a person may never be truly considered financially free if he does not arm himself with a foundation that helps build his wealth and protects him and his family from any financial disasters.
Friends, the road to wealth takes a long time to reach the destination (goal). Building your structure of financial freedom may take years, or even decades, to see it rise to the top and ready for use in achieving your needs and dreams in life. But without the proper support, base and foundation to keep it standing while you are building the structure, your financial value would collapse and put yourself, and probably your family, into rubble and financial depression that it may take a long period to recover, or maybe never.
This financial instrument that has the ability to protect you and your investments is insurance.
Robert Kiyosaki, the best-selling author of Rich Dad Poor Dad, defines insurance based on another book of his Rich Dad's Guide to Investing:
Insurance has that protection component that almost no other financial instrument can provide. Think of it as a cushion for you and your family in case of any unforeseen event.
Think about safety and security. You may have accumulated a huge sum of wealth in all your investments, but a chronic illness strikes you or a family member, or you die to soon without the the basic foundation of personal finance. As a result, you could end up selling your stocks, real estate properties, pulling out sums of money from savings in order to pay up for the expenses incurred. If you don't have an emergency fund, the more complicated things would become.
When it comes to insurance, it's better to have it and not need it, than to need it and not have it. (I know it sounds confusing, but you get the point).
There are different types of life insurance, and those we will tackle on the next post.
In personal finance, a person may never be truly considered financially free if he does not arm himself with a foundation that helps build his wealth and protects him and his family from any financial disasters.
Friends, the road to wealth takes a long time to reach the destination (goal). Building your structure of financial freedom may take years, or even decades, to see it rise to the top and ready for use in achieving your needs and dreams in life. But without the proper support, base and foundation to keep it standing while you are building the structure, your financial value would collapse and put yourself, and probably your family, into rubble and financial depression that it may take a long period to recover, or maybe never.
This financial instrument that has the ability to protect you and your investments is insurance.
Robert Kiyosaki, the best-selling author of Rich Dad Poor Dad, defines insurance based on another book of his Rich Dad's Guide to Investing:
Insurance is a very important product and needs to be considered as part of your financial plan, especially when you are first starting out. For example, if you have no money but you have three children, insurance is important in case you die, are injured, or for whatever reason you are unable to complete your investment plan. Insurance is a safety net, or a hedge against financial liabilities and weak spots.
Insurance has that protection component that almost no other financial instrument can provide. Think of it as a cushion for you and your family in case of any unforeseen event.
Think about safety and security. You may have accumulated a huge sum of wealth in all your investments, but a chronic illness strikes you or a family member, or you die to soon without the the basic foundation of personal finance. As a result, you could end up selling your stocks, real estate properties, pulling out sums of money from savings in order to pay up for the expenses incurred. If you don't have an emergency fund, the more complicated things would become.
Robert Kiyosaki would later punctuate the concept of insurance, according to his Rich Dad:
Insurance is a very important product in anyone's life plan. The trouble with insurance is that you can never buy it when you need it. So you have to anticipate what you need and buy it hoping you'll never need it. Insurance is simply peace of mind.
When it comes to insurance, it's better to have it and not need it, than to need it and not have it. (I know it sounds confusing, but you get the point).
There are different types of life insurance, and those we will tackle on the next post.
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