Do-It-Yourself Financial Plan Step #2 is Risk Management. Risk Management is about managing all the risks we have in our lives. We can’t prevent disaster from happening but we can manage the risk we take by offsetting our costs with insurance. In our do-it-yourself- financial plan, we analyze the risk we are taking with our businesses, our homes, our lives, our health, our cars and other assets and then we figure the cost to insure them all. That will be an eye-popping number. We can’t afford all that so then we start to break down what coverage we really need that we can pay for and take the risk for the rest.
The first three steps in this do-it-yourself financial plan are building a firm financial foundation. When we have insurance to offset our risk, we won’t be tempted to dip into our long term investment plans and screw that up. There are lots of posts and resources here to help guide you to the right insurance at the right price with the right vendors.
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