Have You Adequately Insured Your Most Important Asset?

by Dominique Schuh

Falls in resource, energy and telecom companies, including Rio Tinto, BHP Billiton and Vocus Communications have dragged the Australian share market lower. The benchmark S&P/ASX 200 index closed 0.13 per cent lower on Tuesday, despite trading in positive territory for most of the trading session, underpinned by the financial sector. The Dow was little changed in late morning trading on Tuesday, pressured by a sharp drop in oil prices that weighed on energy companies, while a rise in healthcare and biotech stocks helped lift the Nasdaq and the S&P 500. The Australian dollar has gained ground on the back of stronger commodity prices. At 1200 AEDT on Tuesday, the local unit was trading at 74.90 US cents, up from 74.74 cents on Monday.

What this means for you:
While the share market has given up a small amount of its gains from the Trump election, it shouldn't be enough to make investors jumpy. Remember your long term goals and try to minimise these common mistakes that people make with their finances: 
1. Not knowing your net worth. Make sure you're aware of this figure as it serves as your starting point.
2. Impulse buying. If you fall into this trap, chances are you haven't done a budget either. Take the time to think about whether your purchase will give you real long term value, or whether it's just making you feel good today.
3. Being risk-averse - if you've got a long investment timeframe, you can easily afford to take some risk with your investments. Go in with the knowledge that they'll move up and down in value, but you need not sell
4. Not insuring your biggest asset - you. The average person will work for 40 years, and earn around $70,000 per year in today's market. 40 x $70,000 means that the very minimum "human capital" you have to offer your family is $2.8M, assuming there are no future pay increases. If you had a house worth $2.8M, would you insure it? I think so! Make sure you insure yourself as well.
If you would like to review your current structures, call us on 5482 2855.