Making a million dollars does not mean you are wealthy. Wealth creation is about putting away enough money based on your current earning capacity and consciously making decisions that will help you keep afloat. Financial planning is very key in wealth creation, investing in life insurance, having a disciplined savings plan with an emergency fund, and investing in stocks, bonds or treasury bills are some of the many ways to help you create and maintain wealth.
How to calculate your net worth
Calculating your net worth enables you to be informed whether you have created enough wealth given your age and current income level. According to Thomas J. Stanley and Willian D. Danko in their book labelled “The Millionaire Next Door” to know your net worth, multiply your age by your gross income, which includes every source of income minus your liabilities divided by ten (10). This measurement keeps you guided, and in turn, helps you to save and to prepare adequately for retirement.
Financial planning helps you determine your short and long-term financial goals and create a balanced plan to meet those goals. Have you ever wondered why the law requires you have car insurance or why a bank won’t give you home loan without homeowners or mortgage insurance? These are assets of value to us. Come to think of it, you are your families’ biggest assets especially if others (parents, siblings, children, spouse among others) depend on your income. You certainly need life insurance as part of your financial goals to keep your family even after you have exited this world.
Death is inevitable so whiles there is life we must plan well by taking up life insurance to take care of the unplanned or the uncertainties, so your family is not worse off when the unexpected occurs. It, therefore, makes great sense to insure your greatest asset which is You!
Here’s why Life insurance must be part of your wealth creation journey.
Life insurance provides leverage: you pay a small amount called a premium to your insurance company with a guaranteed payout of a relatively large amount of money should the unexpected occur.
(demise, injury, disease, illness, loss of income or job). The benefits of having a Life insurance policy are immeasurable. Here are but a few reasons why everyone needs Life Insurance:
- Financial security
Life insurance provides you with financial security should the worst happen unexpectedly. No matter your source of income, getting a Life insurance policy will help your family get back on their feet quickly. This is because they will receive a lump sum that will help them in diverse ways.
- Provides protection for you and your family
Your family deserves a decent standard of living which is why investing in Life Insurance is very important. The people you love the most will be protected against financial hardships should the unfortunate happen. The best gift you can leave behind for your family is financial support which is why Life Insurance gets to cushion your family in hard times.
- A legacy to leave behind
Families grieve when the breadwinner is no more because they have lost a loved one and more importantly the financial burden that lies ahead. In most cases, they are grieving because of the future of their children and the general family wellbeing. Which should not be so. Life insurance creates a legacy for your loved ones. As part of your financial plan, you should invest in enough life insurance to allow your family to survive without your income. The lump- sum death benefit can secure the future for your children. Major expected expenditure like university education for your children can be catered for when there is no flow of income.
- Peace of mind
Once you invest in Life insurance, you have peace of mind knowing that, should anything happen to you, your family will not need GoFundMe or rely on the mercies of the extended family to survive.
Hollard Life Assurance has bespoke Life insurance policies like the Adepa Wofie policy. It’s a comprehensive funeral support plan for your nuclear family and other family members. It cushions the bereaved family and provides short to medium term financial relief to them. To find out more please visit www.hollard.com.gh or call 0501533698.
Beyond various nationwide office branches and Hollard 2U franchise shops, Ghanaians can also find Hollard at Shell Fuel Station Welcome Shops and Melcom for all their insurance needs.
As we toil hard to create wealth, let us be guided that, wealth creation goes with a good name. Whiles investing, you should live a good life. Invest in yourself, get an education, build your career and through that you can be able to make sound financial decisions for yourself and your loved ones.
>>>The writer is an insurer and Managing Director (MD) of Hollard Life Assurance Ghana