In the pursuit of building our ideal lifestyle, most of us tend to focus on what we want as being urgent - instead of what's important for our long-term needs.
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The constant upgrading or dining out multiple times a week takes priority in the budget, ahead of items that are important but not urgent - until it's too late.
Imagine for a second that you have a machine in your garage that tirelessly printed money seven days a week, 52 weeks a year. It is a well-oiled machine and has never skipped a beat.
Do you think it's important to insure it? Just like you insure your car or your home? For most, this money printing machine just sits there at home, unprotected and uninsured. You guessed it - this machine is you. Now imagine that you could no longer work and generate income to fund your lifestyle or provide for your family.
What would you do if you could no longer meet those large mortgage repayments? All of those life dreams are replaced with medical costs and worries about money.
The sad reality is that 1 in 3 Australians will have a major medical event or illness between the ages of 30 and 64.
An insurance policy - that could have been put in place for a relatively low cost - to cover loss of income and pay debts so you can focus on your health now seems urgent, but it is too late.
Your capacity to generate income until you retire is too often taken for granted and severely undervalued.
If we were asked to list our most valued assets, most of us will list our home and investment properties, maybe our share portfolio or our super fund.
Some may also put down their business as their most valued asset. What so often gets missed is the greatest asset of all - our capacity to earn income into the future.
For example, if a 30-year-old was earning $100,000 per year, increasing by only 3 per cent each year, they would have earned approximately $6,327,594 by the time they reach age 65 - easily making their capacity to earn future income the most valuable asset they have today.
The sad reality is that 1 in 3 Australians will have a major medical event or illness (cancer, heart attack, stroke) between the ages of 30 and 64. Even more alarming, the Rice Warner Underinsurance in Australia 2015 report revealed 42 per cent of Australians have enough life cover to provide the same standard of living for their families if they were to die or could no longer work.
While most Australians have some form of life insurance, either in their super fund or through a retail product, this cover just simply isn't enough.
So, if you owned a money printing machine, would you insure it? Given that this machine is your most valuable asset today and it doesn't cost too much to put protection in place, the answer should always be yes.
