Bob Miller: What's Worse Than a Bear Market?
- Details
- Published on Thursday, 06 June 2013 16:54
- Written by Bob Miller
In my last writing I shared how I was first introduced to the idea of saving money from my grandfather at the age of 5. I am now 48 and enjoy sharing the financial knowledge I've gained thus far.
Helping people make better financial decisions is a passion for me. It means making sure all bases are covered, risks are hedged, and outcomes are assured as much as possible so clients can rest easier at night without worrying about their financial future.
There is nothing like real life events to bring certain truths home. Such an event occurred in my office several years ago during a meeting with the children of a long-time client.
Their mother was experiencing signs of dementia and she was being moved to a nursing care facility. Suddenly they had a new expense requirement to meet; $5,500 per month in long term care costs were being added to her budget. This was more than she could afford without depleting principal.
My heart sank and I am sure my face went pale. Why had I not talked to "mom" about the value of owning long term care insurance? While I had hedged against possible market losses in her portfolio, I had not hedged against the possibility of much higher health costs such as long term care. Our precious portfolio was now in danger of a result even worse than a bear market. That is an unacceptable result in my book.
In not exploring long term care options for her, I had affected two generations of clients. I could see our good investment decisions made over the previous 20 years would suddenly benefit the nursing care facility instead of mom and her family.
What a profound relief I had when they pulled out two long term care insurance policies that she had purchased from someone else! With those benefits she would be able to meet this sudden, significant increase in expenses. The fact she had the foresight to plan for this possibility should not have surprised me. She always put her family first.
It was a powerful learning experience for me. I promised myself at that moment that I would talk to all my clients about the different ways to add financial protection against the possibility of a long term care expense in their lives. That effort continues.
Thankfully, the hedging options available today come in many client friendly varieties, making it easier than you might think to cover this significant risk to you and your assets.
Please send your questions or comments to me at Bob@HFSInvest.com. I will answer them personally and they may influence a future writing!
Securities offered by LPL Financial, Member FINRA/SIPC.
