How To Protect Your Wealth On Your Financial Freedom Journey

Episode Number: 288

Episode 288- How To Protect Your Wealth On Your Financial Freedom Journey

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Show notes

How To Protect Your Wealth On Your Financial Freedom Journey

Jamila Souffrant 0:02

This is also why it's so important to even if you do hire someone else, and they are giving you advice, and maybe they have more degrees, you are educating yourself and thinking about how their advice applies to your life. And I just glad that being in the position I'm in, and the position that I want you to be in when you're having these conversations is not just blindly taking and doing what someone is telling you to do. You are questioning your thinking, using your reasoning skills to see what works.

Intro 0:35

T-minus 10 seconds. Welcome to the journey to launch podcast with your host jameelah. So frogs as a money expert who rocks her talk, she helps brave juniors like you get out of debt, save, invest and build real Whoa. Join her on the journey to launch to financial freedom for three.

If you want the episode show notes for this episode, go to journey to or click the description of wherever you're listening to this episode. In the show notes. You'll get the transcribed version of the conversation, the links that we mentioned and so much more. Also, whether you are an OG journeyer, or brand new to the podcast, I've created a free jumpstart guide to help you on your financial freedom journey. It includes the top episodes, so listen to stages to go through to reach financial freedom, resources and so much more. You can go to journey to launch that comm slash jumpstart to get your guide right now. Okay, let's hop into the Episode

Jamila Souffrant 1:43

Hey, hey, hey journeyers. It's Jamila souffrant, host of the journey to launch podcast and I am coming to you with a solo episode. As always, I hope that this episode is actionable, inspirational. And basically encourage you on your journey to do something different. I hope you can take action from what I'm about to tell you or at least be inspired by it.

So in this whole episode, I'm going to be talking a little bit about what we've been doing personally in our financial life, to make sure that we are protecting ourselves adequately for the journey that we are on. So what does that mean? I talk a lot on this podcast, we talk a lot right about earning money, building your net worth reducing liabilities, building assets, reaching financial freedom. So there's a lot of emphasis, of course on building wealth. But we also need to make sure we are talking about protecting our wealth, because what good is building all the wealth you can making all the money you can make. And it's not protected meaning something happens to you a family member, or there is something you cannot even account for or foresee that happens that really devastates you financially, right. And so it's one of the things that we've been focusing on improving in our financial life is making sure we are being cognizant of the risk and managing risk in our financial lives.

So what does that mean? I've talked before about hiring a financial planner. I've talked about this in previous episodes. But essentially last year, we hired a financial firm, almost to help us with our financial planning. Previously, this is something I was doing for the family for my husband and I and the kids myself, and it was fine. But I realized, you know, I wanted someone else I wanted oversight, I wanted guidance from professionals. Because while I know that you guys consider me a money expert, and I'm pretty good at talking about money, earning money, saving money, and hopefully inspiring you to do the same. You know, there are just some things I don't know. And I wanted to make sure at the level that we were achieving, and at the money that we were making, and the places that I want to go and take my family in terms of life and wealth, that we have people who also could help us do that. And just like a doctor does not do surgery on themselves, they have other doctors that they go to, I'd say similar to me just because I am a self, quote unquote, money educator or what some consider a money expert doesn't mean that I don't need help myself. We need help. And I'm not afraid to say that or admit that. And I think it's really about finding the right firm or people that you can trust to help enable you to make better decisions about your money. So the firm I hired, they're not managing our assets for us. They're giving us tips and guidance on our financial portfolio, the things that we need to do in order to continue to grow our wealth but protect it, and so hire them

And it's been a process of getting on board, you know, we have our quarterly meetings, we have our financial planning meetings. And every meeting we have, they give us a checklist of, okay, here are the things you need to do to make sure you're protecting your wealth that you are properly covered, if anything happens to you. And so, in our last meeting, we were given a list of things to do. And we talked it through and talked about the importance of doing these things. So what I'm going to do in this episode, is share with you that list of things that we were told to do that was was suggested to us. And what we ended up doing and what we are in the process of doing.

My hope is that one, you remember that I am not your financial adviser, and they are not your financial advisors. But that if something applies to you, or you think that this is something you should look into, and do, then to do more research, and look into doing it, because some of these things I wish I would have done earlier in my life, you know, in my 20s, versus now in my late 30s. And so I'm hoping that this will give you a kick in the butt or at least inspire you to look into some of this for your own family. So I'm gonna go through that list. And I also did a real on this on my journey to launch Instagram page, I'm going to try and repost this the day or repost that real the day we publish this episode that you see it, but eventually just show some of the things that we did.

So first thing that we did in terms of risk management in terms of protecting our wealth. So remember, we are not just growing wealth, we want to protect it. And this one is actually simple. I think everyone should do this not think I know everyone should do this is that you should get a safe. So we are encouraged to buy a safe in order to store our passwords, birth certificates and other important documents. That would be hard to replace if there was a fire or a flood in the home. So whether you rent or you own a home, you should have a safe. And you know, it's that much for us as much as we are afraid of theft. You know, it's more about what if there's a fire? And all our important documents are gone or lost? Like how hard would that be to replace them. Because that was a no brainer that our financial advisor or planner told us to do and get we got our safe from Amazon. I'll also link that in the show notes. So we bought our safe from Amazon, it was about $63. It's currently in a safe place in our house. And it now has all of our important documents. So our estate planning documents, this includes our will, and our power of attorney, and health proxies, all these things that if something happens to one of us, it's or the two of us in a safe place, we know where to go to sea or to give it to the proper people. We have birth certificates for ourselves for the kids passports. Basically, you put anything in there that if something happened in your house, at least it'd be safe. So I recommend everyone getting a safe. See, it'd be safe to get a safe, so you should get a safe. Because really, it's not that expensive. It was only $63, the one that we got on Amazon. And yeah, it just makes sense. Why not. So that's one that I think everyone should do. And that we did right away.

The second thing is something I think everyone should also do. So the first two tips are things I think everyone should do like no matter what. So the second thing was reviewing your taxable accounts. So your taxable investing accounts, your retirement accounts, and any type of assets that you have bank accounts to make sure you have the appropriate beneficiary designated on the account. So take the time to go through and log in all of your accounts, you know, make a list of them, make a list of all the bank accounts, make a list of all the investment accounts and go in and make sure the appropriate person or persons are listed as the beneficiary on that account, I was told that you should never list children or minors, because if something does happen to you, and they're still younger, that's a lot to go through in order to get it to them. But really like this goes for whoever you're leaving your assets to, it needs to be updated on your account. So take the time to do that we actually did that or actually went in and did that. And while we've done that before, and I've always I always tell people to do this. It was a great reminder from our financial planner to do it. Because when I actually went in, I realized that there was some accounts that did not have my husband as a beneficiary on it. And so go do that. Go do that right now or as soon as you stop listening to this podcast.

All right, the next two things that we did all involve insurance. And I am no let me just say this really clearly. I am not an insurance expert. And I do want to have someone come on and talk about insurance because it's so important. But I just have to find the right person because I don't really don't want them to come on and try to sell policies or I want it to be something where it's really just educational. And it's not going to be some kind of marketing thing. So I'm looking into that. But in the meantime, I'm going to tell you are two things we've done with our insurance different types of insurance to help better protect ourselves in case something happens. So the first is life insurance. Life insurance is extremely important, you know, life insurance for us, especially because we have three small kids. And if something were to happen to one of us, or both, but especially it was really for like one of us, then we would want to make sure that the other parent is financially, okay. So the last thing I would want to have to worry about or that I'd want my husband to worry about is money. If something were to happen to either one of us, I wouldn't want to worry about having to do a podcast or do a brand deal or whatever. And I wouldn't want to have a time limit on however long it took to grieve and to be with my children. And so we had insurance. Well, I should say, my husband has insurance through his job. And you know, I had insurance to my previous job when I work, but they weren't adequate when you looked at probably how much it was for my husband was a couple $100,000, which is nothing to sneeze at. But quite honestly, based on where we are financially and our responsibilities, it would not be enough for the other parent to feel secure if something were to happen. And so it was suggested to us that we get $1 million policies, a life insurance policies for the both of us, each of us. And because I didn't have any policy at all, it was really important to be as the entrepreneur as actually the person who has the capacity to earn more at this point, or the potential to earn more, that I wouldn't want our lifestyle or what's happening right now with our income to really be impacted if something were to happen to me. And so we went and we got insurance, or she said, we are in the middle, we're still in process. Maybe by the time this episode comes out, it would be a complete process. But we're still in the process of applying for our insurance. And we got term life insurance.

So I'm gonna actually read something from Investopedia. Because I know this is a question I get often like the difference between Term Life Insurance whole life insurance, what's better, no. And so we got term life insurance. So that's also known as pure life insurance. It's the type of insurance that guarantees payment of a death. So it's a stated death benefit, if the person that is covered, dies within that specified term. Once that term expires, we can renew it or and go for another term, or we can convert the policy, sometimes you can do this into permanent coverage, so you can keep it going. Or you can allow the policy to terminate. So when it was important to get the adequate coverage, and 1 million for each of us seemed to be a decent amount, we wouldn't necessarily have to worry about money, if something were to happen, and to the term wasn't important. So our advisor actually initially said we should look at 30 Year Term life quotes. And we were put in touch with just like an insurance broker, who would then basically take an intake of basic questions, and then go search for quotes and go to different insurance companies to see like the best quote, and so we got back quotes for 30. year and I started thinking, and I thought, the main reason for us to get insurance right now was in case something happens to one of us, or both of us. And the kids are still young, right? So our kids are pretty young, eight, six, and four. And you know, what would be involved, right, in terms of having to raise kids, God forbid something were to happen, you know, we'd need additional help, we'd have to hire someone, I wouldn't want to worry about mortgage payments, right? Like that would be important. while raising these children. God forbid something happened. And so when I started to look at it, I said, Well, you know, that's the main reason that we're getting life insurance, because we do have adequate assets, to cover things outside of like an emergency outside of a death, right? Like, we do have enough assets to cover things as the kids get older. And so I actually pushed back and spoke to my financial planner, and I said, I know you recommended 30 years, but what about 20 years, because in 20 years, our oldest kid would be 28, the youngest would be 24. And if the primary reason is that we want to protect and have income, or at least have financial security in case something happens while they're younger, then for us 20 years is enough term. And the reason why I pushed back at the 20 year mark was because the difference between the initial quoted premiums, so the amount that we'd have to pay on an annual basis, there was pretty significant difference between 30 years and 20 years, at least to me. And so I thought to myself, What about 20 years? Because if something happens in 20 years, so let's just say, hopefully we live right forever, or at least until you know, our natural death. Then even at Deira say we're 39 So we're not spring chickens. We're not old but we're not spring chickens. So let's just say now we go past the 20 years, and now we are just gonna round up, we're 60. By the time we're 60 years old, the kids will be old enough where hopefully they will be stable on their own. But it would be okay not okay if something happened. But if something did happen, we have other assets, we have access to other acids, our retirement accounts, to help in case anything were to happen. So the 20 year term for us, I'm just walking you through my thought process seemed to just be the most optimal thing. And when I mentioned it to the financial planner, she was like, You know what, you're right. Because technically, that's the reason why you're getting it. So adequate timeframe.

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Jamila Souffrant 16:34

So this is also why it's so important to even if you do hire someone else, and they are giving you advice, and maybe they have more degrees, you are educating yourself, and thinking about how their advice applies to your life. And I just glad that being in the position I'm in. And the position that I want you to be in when you're having these conversations is not just blindly taking and doing what someone is telling you to do. You are questioning your thinking, using your reasoning skills to see what works. So that was what we did. And again, we are still in the process, I will tell you that it is a process. This is one of the things I wish I would have done when we were younger, potentially in our when we just got married, or at least when we started having kids because one, now that we are older, there's more risk. So the insurance companies are looking at us like, okay, so you know, there's a little bit more risk. You know, as you get older bone start to crack, I mean we are, we are in pretty good shape, but you just never know. And so the risk that they associate with your premium, meaning you'll end up just paying more money, the older you are if you try to get some of these plans, so it's never too late to do it, especially if you have dependents. And you want to make sure that you are leaving something behind in case something happens to you. But this is something if we did earlier, our premiums would have or how much we are going to pay would be so much less. And so far the quotes we're getting per person. So for each of us, my husband and I both have a 1 million policy, life insurance policy each it's between six and $800 per year each. And so I'm assuming and I think I didn't ask this question. But if we would have did this at 24, it might have been cut in half that cost for us. So if you're young look into it. I know I had a friend who she didn't have kids yet, but she did take out a life insurance policy and had her parent as the beneficiary because she just felt like she did want in case something happened to her prematurely that her parents will be okay. So I do think that this is something and it doesn't have to be a million dollars doesn't have to be as much. But if you have insurance through your job, check how much that is because sometimes your job automatically does it. But then sometimes they offer you supplementary insurance, because it's a group insurance policy, you get a great rate. But even that might not be enough depending on what you have going on in your life. So make sure that you have adequate coverage. The earlier you do it, the better. But it is that you're finding this out later in life, do it. And we did like going through a brokerage company who gave us the best quotes. And from there, we are now in the process of getting all the medical exams. And that I would say was just a bit taxing because you got to get all your information. You got to get the information of all your doctors last time you visited your family history. I mean, they want to know everything to make sure that they are insuring you or they at least know what they're insuring. And that there is no risky behaviors that you're participating in that could cause an early death. So that process we've actually been going through for over a month now still going through it. And I'm hoping that we get to the finish line and we will have these policies in place before the end of the year. So that's the other thing we did again, term life insurance. I'll try to have someone on that's an insurance expert but Looking for the proper person to do that.

So the third thing we did was we got umbrella insurance. And so brella insurance is something that actually have not or did not hear about or know about, necessarily, until we started this process, I heard about everything else do you know having a safe, that's the smart thing to do the beneficiaries and life insurance, but umbrella insurance was a little different. And but we were told that at the level of assets that we have, that was would be smart to get umbrella insurance, because umbrella insurance helps protect your non qualified assets that are not covered by your auto insurance or your home insurance.

So it usually kind of sits above or over. So that's why it's called umbrella insurance. So think of it as an umbrella covering you. So you have home insurance, auto insurance, and your umbrella insurance policy sits above all of that. And it for in the cases, if something does happen, that your auto insurance or your home insurance does not cover, your umbrella insurance policies will help cover something or in case something happens.

So let me just read a little bit more about umbrella insurance. And then I'll go into why we were suggested to get it and at first, I was pushing back on getting it, but that it just made sense for us to do. So umbrella insurance, things to know I'm getting this actually from But this is what they say about umbrella insurance, umbrella insurance, they say you could you should consider to get if you are liability limits are less than the total value of your assets. So that was in our case, our assets exceed how much our liability limits are on our auto insurance on our home insurance meet, which means, you know, if something does happen to you know, the car or the home or outside of that, which we'll talk about is that someone actually can come after our personal assets because the car policy and auto and home policy will pay up to a certain amount. But after that, then what. And you know, that's not to say you still can't, you know, exceed that we even with an umbrella policy if something happens. But in our case, it just helps if you have more assets than what your current liability limits are on your auto and home. The other thing is that umbrella insurance covers situations beyond the scope of normal liability insurance. So this includes things like personal psychological harm, mental anguish, libel, like so if you get sued for something that was out of your control, or someone is coming after you, the umbrella insurance policy will help cover things of that nature. I'm gonna say that again.

So it does things that your other policies do not cover. It goes above the scope that those auto and home insurance policies don't cover. So these policies can start at a million dollars can go as high as 10 million, we actually were recommended to get a $3 million policy a pushback on that I was like, Do we really need that much. So we ended up getting a $2 million policy. And what this does, it just provides an extra layer of protection should something happen. Common examples could be if your dog bites a neighbor's child, if you get in a serious car accident, and it's like severe injuries to people that your auto does not cover. You post something on social media that the other person considers, you know, libelous as I pronounce it, you would hopefully be protected. As long as it's not shown to be malicious. Someone may be slips in your home. These are the cases in which the umbrella policy could help you and work in conjunction or in addition, or just if your other policies are not covering this. Now, some things to know about the umbrella policy. The reason why I pushed back is because we were initially told, you know, umbrella policy is pretty cheap, and it can be so if you go like under a certain limit, I think if you were to get a million dollar or less like it's only if they say it's only a couple $100 a year for us based on our assets. And then based on where we are so we are in New York, we were not able to go directly with our current insurance company, we had to work with a partner to insure us. And so this policy ended up or this ending up costing us about $1,200 a year. Which of course, you know, part of me is just like really like what this really happened to us. Like it's been almost 40 years. This has not happened to us yet where we had anything serious, you know, a serious car accident or something crazy happened. I haven't been sued. Would like Why pay $400 A year and this renews every year so it's not a fixed amount or rate. You do have to redo it every year. So part of me just felt like wouldn't it be better just to keep that money?

But again, pushing back with my financial planner, and then reiterating the amount of assets that we currently have and the position that I'm in that it's better to be safe than sorry. And I actually conceded, I said, You know what, you're right. This is an expense, we need to just suck up and pay. And we did. So we applied for this, we got it. And I did call around. So I wanted to make sure we were getting the best rate. And every other insurance company that I called, actually, one could not do it directly. And the other one I had to, I would have to move all of my autopilot, my auto policy and my home policy to that insurance company. And it just didn't make sense to do that.

The other thing I would note is that if you do go for the umbrella insurance policy, your auto and home limits have to be at a certain amount. So your existing policies may need to be adjusted, because they're not going to give you additional insurance if you're under insured in those policies. So for one of our policies, or our auto policy, we had to increase a liability limit which increased our auto policy by $100. So there are some, you know, additional costs there. But I do feel more confident, like I really feel like an adult. It took me 39 years, but I feel like a real adult right now. Because we are hedging for risk and protecting ourselves in the best way possible. And our wealth, and I'm walking to talk with you, right? Like I am showing you what we are doing in real time, in the hopes that there's something that could apply to you, or that can help you with your own financial journey. But for us, it just, it does feel better, it's additional money, right that we have to now pay on a annual basis that I'm like, wow, that could be a trip somewhere. But that is part of being an adult, and being someone who is conscious and deliberate with building and keeping wealth.

So I'm just going to reiterate the couple of things that we did. And then I would love for you to tell me if any of these one if you've had any of these policies, if you currently do or you've done these things already, let me know. I love, love love when you're listening to episodes, you're taking action, or you're communicating with what's resonating.

So one is we got to save, I'll link that safe in the show notes. It's pretty reasonable and affordable, and everyone should have a safe to keep your important documents.

The second thing we did was we made sure that all beneficiary information was up to date on our investment accounts and retirement accounts.

Third thing we did was we applied for life term insurance, because we have small kids, and we do not want to be put in a situation where we are financially unstable, should something happen to one of us in the near future.

And then the fourth thing was we got umbrella insurance to further protect our assets in case there was a you know, major accident or lawsuit. Those are the four things we did.

Now I did get a question someone did ask me in terms of insurance, and I'm just gonna read this question. But the question was, Is it possible for someone younger to do some of these things? How do you know which insurance policy is right for you?

And the answer is yes, yes, yes. If you are young, like I said before, this is a perfect time to get these things in place. Not necessarily maybe the umbrella insurance policy depends on your assets. So if you do have a lot of assets, then you may want to look into that. But really, the insurance, I would say is important to get on. Now. Even if you're not with someone, you don't have to be married, or with a partner or have kids to do this. You can have your parent or a sibling, be the beneficiary for a policy, right? Like if you're thinking about wealth, it doesn't always have to be passed, up or down, it can be passed across the lines, in case something should happen. And also it doesn't have to be, you know, I know a million dollars seems flashy and have great number. But it doesn't have to be that it can be enough to cover you know, your expenses or if something happens to you your funeral expenses so that your family doesn't have to do a GoFundMe, right. So it's like different reasons. And I will always remember when I've had estate planning episodes on and I'll link those so meaning having a will, Power of Attorney health proxy, all of these things that you should have in place already, before it's too late. The important thing to know is that you don't need to be already rich and wealthy to do this. There's a misconception that if you you know you don't have millions in the bank, you don't have a lot of assets. What's the point that you should wait until you get there? But I'm telling you the thinking and thought process, the determination right to sit down and to do these things, is the same brain muscle that will allow you to become wealthy okay.

And I really mean that like, sometimes it's said within the exercise, it's within the doing that we actually create these pockets of our momentum that translate to other areas of our lives. So for you to be whether, you know, however old, you are listening to this, and taking yourself seriously, you're taking yourself as a serious person. And you're like, you know what, I am building wealth, I will become wealthy. And that's relative, whatever wealth means to you, then you are going to protect yourself and your assets and the people around you as soon as you can. Because you're confident in yourself, even if you don't always know what to do. You're confident and you've started to make changes. You're becoming who you want to be, you're doing the work. And I think that's actually more important than waiting until you have it to do it. Because in parting with doing you become exactly what you want, and who you want.

So now, you don't need to wait until you're super wealthy to do any of these things. The only the only thing I would say is maybe exception is the umbrella policy. But everything else you can do today, some of that stuff you can start looking in today. Yes, it's going to be annoying having to, you know, sit down and gather all the paperwork. Yes, you may have to make a few phone calls. Yes, it may take 30 minutes or an hour outside of all the things you have to do, but it will be worth it. Okay, so I hope you enjoyed this solo episode. Again, I'm at journey to launch on Instagram at Jamila souffrant from my personal IG. I will be sharing some of this information in some of the links that I can in the episode show notes. But I hope I hope I hope this helped you a lot.

Outro 31:42

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Transcribed by

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Building wealth is something talked about often. What isn’t normally discussed? Protecting that wealth you’re working so hard to build!

In this solo episode, I talk about how to protect yourself, your assets, and the people you love as soon as you’re able. You don’t have to wait until you’re “older” or wealthy to check off these boxes. Start risk management and wealth protection today and become a wealthy person by acting like one now.

In this episode, I discuss:

  • Why we hired a financial planner (even though I’m a “money expert”)
  • The importance of having a safe and physically protecting important documents
  • Taking the time to secure the appropriate beneficiaries for all of your assets/accounts
  • Understanding your insurance options + more

What stage of the financial journey are you on? Are you working on financial stability or work flexibility? Find out with this free assessment and get a curated list of the 10 next best episodes for you to listen to depending on your stage. Check it out here!

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