Illinois Earthquake: Wake Up Call to Four Key Areas of Your Financial Plan
At approximately 4am, a third earthquake has hit Illinois since 1999. I recall the one in 2008, 3 weeks before I was to conduct a financial planning workshop during Money Smart Week sponsored by the Federal Reserve Bank of Chicago. It changed the information I was going to deliver at this workshop. In fact, I broke down in the middle of the presentation to re-enact how one of my close friends thought Jesus was coming.
And it is a good time to bring it up again.
Just because this Illinois earthquake did not bring down the Sears Tower (yes, I’m old school…it’ll never be Willis Tower to me!) or the John Hancock building, it doesn’t mean that this was a sign to us all to get our financial home or emergency plan, in order.
Re-enacting a close friend's reaction to an Illinois earthquake during a workshop in 2008
I don’t think that anything will hit us in Chicago near as devastating as the earthquake in Haiti. However, what do you do if a life event (death, disability, change in health or ability to work) sends a ripple effect of financial and emotional tragedy your way?
In the Marine Corps, we were taught to “plan for the worst and expect the best”. Do you have a financial plan or emergency strategy in case your world turns into a hurt locker?
Learning from natural disasters and catastrophes happening before us, it leaves us many clues on what we should consider.
Here are several:
1) Cash Liquidity – Do you have the financial flexibility to leave Chicago and get to Los Angeles (or other sunny destination) in a moment’s notice? I’m not talking about a credit cards either. Nothing can help you move faster than the grip of cold, hard, pungent-smelling cash in hand.
2) Homeowner’s and Life Insurance – double check with your property and casualty insurance agent if there is an “earthquake”, “hurricane”, “tornado” or “Act-of-God” clause that would prevent the insurance company from paying your claim. The lessons of Hurricane Katrina and succeeding natural disasters have exposed how even the strongest insurance companies will try to squeak out of paying you, if they can. Even Senator Trent Lott had to fight tooth and nail to finally get State Farm to pay up. If an insurance company was half-steppin’ on a Senator, would about common people like you and me? Also, have you looked at how much your family would continue to LOSE if you didn’t make it through a castastrophe? Losing a home or a car is one thing…but I don’t think your family would be straight if they lost you in the midst of everything. For the cost of a cup of coffee a day, a 35 year old husband can get cheap, cheap term insurance close to $1M dollars. Thanks to the longevity of life for people today, the cost of life insurance has actually gone DOWN.
Pssst…we dedicated a whole week of radio shows with financial and insurance experts on “5 Ways Life Insurance Helps You Stay Financial Prepared…while LIVING!” You can catch up on these shows and take some notes so you can review them with your financial coach, financial planning or wealth-building mentor.
3) Take Control of Home Equity – cashing out any available home equity can be a very touchy suggestion, since many of our financial experts and financial planners advocate becoming debt free, especially when it comes to someone’s mortgage. However, as I personally was involved in rescue efforts during the the massive landslides in Laguna Hills, CA while serving on active duty in the Marine Corps, I witnessed multi-million dollar homes sliding down hillsides. I overheard devastated homeowner’s expressions such as. “Everything I had was in that house!”. What they were referring to was their greatest financial asset, home equity, that had built-up in their home. Do you think the mortgage company was going to give them a break for next month’s mortgage payment? Nope, think again. Who do you want controlling your home equity, you or your bank?
Post-Earthquake poll taken by Sohu.com. How would you answer this?
4) Family Rally-Point – During a time of distress and chaos, does your family and loved-ones know how to find you when all power lines, cell phone towers and internet connections are cut off? When the blackout of New York occurred, many people realized how they took these “conveniences of life” for granted. They never realized how much they really depended on these services. Can you survive with a coffee can, a piece of string and a pocket knife? If not, I hope you have a friend named MacGyver. As a family, agreeing upon a location where you can meet up at a commonly familiar location such as a family member’s home, park or restaurant after a catastrophe. Good idea also to have battery-operated radios handy.
According to a post-earthquake survey conducted by Sohu.com, 88% of all people questioned said that this was a life changing moment. Have you taken the time to put things into perspective if your world turned upside down due to circumstances beyond your control? How would you want to come out of this, in case we aren’t so lucky next time?
What steps have you taken to be better prepared for the unexpected?
The Illinois earthquake may just be our wake-up call to realign our priorities, embrace our loved ones and review the things we may have been putting off, i.e. life plan, financial plan, getting right with God, telling your father that you love him (sorry, the last one was for yours truly)
As an advocate of financial education and financial planning, this is a lifestyle to me. I look at things from a personal and financial lens, after all, I am a single father who does not have the luxury of just thinking for myself.
When you can plan for the worst and the worst happens, you will find great confidence and relief when everyone in your family is on the same page when it comes to an emergency. Instead of worrying about where your loved ones are, you can transition forward together in a much easier and relaxed stance. It will be much easier picking up the pieces and moving forward. Everyone can then take a breath and focus on finding a solution to the mess everyone finds themselves in…and getting back to normal.
Do you need someone to review these check-points with you? Could you use a helping hand and a sounding board to help you align your financial stars? Email us or call our office at 708.686.2000 x1, to set up a free-30 minute session with a Money Smart Coach in your area.
