What You Need to Do Now - 28 Action Steps to Secure Your Financial Independence
By Ric Edelman
Excerpted from What You Need to Do Now
Here’s a summary of the action steps found throughout my book, What You Need to Do Now:
- Secure your debit and ATM cards.
- Make sure you have cash reserves equal to a minimum of three months’ spending, and preferably six months’ or even a year’s. Store this money where it is safe and readily accessible.
- Buy a safe for precious and valuable items that you cannot replace, and keep a written inventory of these items elsewhere.
- If you have equity in your house, take out a loan now and save the proceeds.
- Talk to your employer today about its plans for securing the company’s viability in the event of disaster.
- If you are a business owner or corporate executive, assemble your key staff and begin to implement disaster-recovery strategies today.
- Compare today your current health insurance policy to the alternatives discussed in this book. If you don’t think your policy is best, start shopping for a replacement immediately. If your employer provides your policy, talk with your human resources department about available options.
- Avoid accident and dread-disease insurance; if you have this coverage, cancel it in favor of other, better policies (after confirming that you qualify).
- Ask yourself: How much life insurance do I have?
- Ask yourself: If I die, who would suffer financially?
- If you are insurable, apply for life insurance today -- before an accident, injury, or time makes you uninsurable.
- Ask yourself: How long do I want to keep my life insurance policy? Your answer will help determine which type of policy is best for you.
- If you have many older life insurance policies, see if you can exchange and consolidate them for newer ones. Doing so could save you money.
- Even if you aren’t absolutely sure which type of life insurance is best for you, apply for a policy right now. You can always change it later.
- Buy disability income insurance today. Get help from a financial or insurance advisor when selecting and buying the policy.
- If you are 50 or older, buy long-term-care insurance. If your parents are over 50, make sure they have it. Seek a financial advisor’s or insurance agent’s help on buying the right policy.
- Ignore government minimums for auto insurance policies and instead carry the maximums that your state permits.
- Buy a homeowner’s or renter’s insurance policy today if you don’t have one. Make sure your policy provides liability coverage of at least five times your annual household income or twice your family’s net worth (whichever is greater). If you’re a homeowner, make sure your home is insured for its replacement cost and that the policy reflects its current value.
- If you live in an area susceptible to floods or earthquakes, make sure your home is insured against these risks. Get the coverage you need today.
- Buy an umbrella liability insurance policy today.
- Increase each insurance policy’s deductible to save money.
- Decide today “who gets what” in the event of your death. Then make an appointment with an estate attorney as soon as possible—preferably today.Tell the attorney about your plans or ask for his or her help in forming them. If you don’t have a lawyer, ask your financial planner or tax preparer for a referral, seek names from friends or family, or contact your local bar association.
- When you meet with your attorney, be sure to ask for a Living Will and a Durable Power of Attorney for Health Care. Sometimes these two documents are combined into one, called a Medical Directive.
- When you meet with your attorney, be sure to ask for a Durable General Power of Attorney.
- After granting someone your Power of Attorney, take a copy to your bank and financial advisor to confirm that they’ll accept it.
- Talk with your family today about your estate plan.
- If you have money in investments that you plan to spend within 3 years, move that money to your cash reserves today.
- If you haven’t done so already, build a carefully designed, highly diversified, long-term portfolio today—even if it means selling or repositioning your current investments. If you don’t know how to create such a portfolio, schedule an appointment immediately with a financial planner.
If you believe that any item on this list is important for you, complete it today. You might not get the chance tomorrow.