Will Rogers once said that, “Just because a thing is common sense, does not mean it will be common practice.” Not much has changed in the 80 years since.
As an example, the most valuable asset most people have is the ability to earn income. They have other valuable assets too. Their home, their household goods, their jewelry, their car, and their teeth.
How many of these are fully insured against loss or damage?
All but their income.
We can agree that it is common sense to insure the things you value. After 30 years in the business, I can assure you that it is not common practice.
Maybe it is because people don’t know what their income is worth. Here is a handy chart showing the net present value of $1,000 worth of monthly after tax income. It assumes your capital will earn, after tax, 1% more than inflation.
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