You’re ready to protect what you’ve built

In this episode, hosts Whitney Reagan and Dan Sharkey explore the importance of risk management and protecting your wealth as your net worth grows. They discuss how to build general awareness around your specific risk exposures—from life insurance and property and casualty coverage to business continuity and cybersecurity—before selecting financial products.

Learn how to identify potential vulnerabilities, maintain proper digital hygiene and evaluate the viability of self-insuring against unexpected events. Whether you are looking to safeguard your personal assets, protect your family or secure your business, discover how working with a financial advisor can help you create a customized risk mitigation strategy.

Transcript

Whitney Reagan: Today we’re going to talk about protecting what you’ve built. Because the truth is, as your net worth grows, so do your risks. Welcome, Dan. How are you today?

Daniel Sharkey: I’m wonderful. How are you? Excited to talk about risk and all the terrible things that could happen to you.

Whitney: Yes. It’s going to be a morbid talk.

Dan: Nah, we’re going to keep it light.

Whitney: You don’t think insurance is very fascinating?

Dan: I think it’s incredibly important. And I’ll get on my soapbox and tell you why. But the most important thing is to keep the perspective that you are protecting what you care about. That could be of a lot of different topics that we’ll touch on. But if you keep it in that lens, I think it’ll be a much easier way to absorb the topics that we’re going to cover today.

Whitney: I completely agree, and I mentioned that as your net worth grows or as your family grows or anything that gets bigger in your life, the more risk you have. And I think the more risk that you have, the more you want to protect that and make sure to keep it safe. And a lot of times, even if you have your own business, that can also be like your baby, right?

So, you want to protect that. And we’re going to talk about how you can protect that and how you know you’re ready to start thinking about these things. Which to be quite honest, I think it’s a spoiler alert—you’re probably going to want to start thinking about it today.

Dan: Yeah, because yesterday is not an option. So, today’s a better solution. But to your point about are you ready? I want to just tap on that for a second. Because that’s the key to this entire question. And it has to start with a general awareness of where your exposures are.

And when we talk about risk, we could talk about portfolio risk. We can talk about property. We can talk about your life. There are so many different areas—your kids, cybersecurity, the list is kind of endless—and we’re going to avoid those doomsday scenarios, okay? But the important thing is, is that risks exist even if they’re not currently present. And I know intuitively people understand that.

But just because things are going well right now does not mean you do not carry those risks with you. And the first step into assessing whether or not there is a solution: do not ever go to what the solution is first, until you understand what the risks actually are. That’s how people get sold life insurance that they didn’t want, didn’t need, didn’t understand.

Whitney: What do you mean? I think I want you to expand on that.

Dan: Just because I mentioned life insurance, let’s just start there, even though this episode is going to cover a lot of different risks that you face. If you’re a single-income household, the risk that something were to happen to you, even if you’re a CrossFit, in shape person who eats right and is all that stuff, is still very, very prevalent.

Meaning that, what would your family do in the event that something happened to you? When I talk about awareness, what do I actually mean?

Well, how much do you need? What type of coverage would be appropriate. That’s not for you to answer. That’s for your advisor to help you better understand. But what would your family rely on in the event that something happen to me? You just have to ask that very, very basic question. If I died, what would happen next? How much do I need to live on?

Those are questions that, if you don’t know the answers to, you have a very, very significant exposure. And that line of thinking should go across everything that you do. Not so that you’re worried about what comes around every corner, but just so that you understand what those risks are and what potential solutions may ultimately be.

So, here’s another example to highlight how you don’t need to take this to an extreme. If I died with $25 million of life insurance versus a million, my family would be a lot better off. But I have to weigh that as to the realities of what the cost and whether that’s even reasonable. They don’t need $25 million of life insurance.

Whitney: And think about your premium.

Dan: All of those things have to go in. So, until you understand where that awareness is, until you can level out the boat to say, okay, this is what is reasonable for us. And it’s very difficult to do on your own. But you have to start with, what are my exposures and how do I make sure that I mitigate those?

Those are things that you need to recognize. And if you can’t or don’t know enough about it to recognize it yourself, ensuring that you have a conversation with someone about what is appropriate. There’s one major caveat that I would give you, though. Talking with someone who can understand the full picture is really, really important.

So, assessing the risk, I’m going to come back to that word time and time again, creating that awareness is really the first step.

And then finding something that mitigates that risk in a reasonable and material way. If you just go—to tie this back to the beginning—if you just go to find a product or find a solution, you’re probably going to end up with something that’s not perfectly optimal for what you actually need.

And that may come with additional cost. So, making sure you understand what that awareness is incredibly important, and it’ll save you a lot of heartache down the road.

And that is not the way to go about assessing your risk management program. And it doesn’t necessarily always have to be life insurance. But anything that involves risk to your life. Making sure that you have a keen awareness of what this is.

And this isn’t a monumental project when you work with someone who understands these pieces. We’ve talked a lot about property and casualty. You know, your P&C, auto, home, and you may say, well, you’re financial advisors. Why the heck are you talking about that? Because it’s a critically important piece.

Understanding what that policy actually includes. Do I have protection against water damage? All the things that you think are included that if you don’t have that awareness, you’re always going to leave yourself exposed.

Whitney: We’ve touched on life insurance, property and casualty insurance. There are other things to think about, too, like cybersecurity risk and how you’re at risk when you’re on the internet, social media, etc. You name it. Especially with AI, I think that people have to think about those types of risks too.

Dan: Don’t be low hanging fruit. That’s everything from making sure your backyard has floodlights to making sure that you use a password manager to making sure that your internet hygiene is clean and good. Those are all really important things. They are things that we focus on with our clients, and they are very real risks, particularly if you have children and making sure that you’re monitoring what they’re being exposed to online.

I think cybersecurity is a is a tremendously important one. And those are all involved in what we deal with and talk about on an everyday basis.

Whitney: A little side tip, something that I learned is that you can get your address blurred out on Google Maps. I didn’t even know that. But I’m telling everyone because I think it’s fantastic.

Dan: Absolutely. And it’s those little types of things. You know, we use a password manager here at Mariner for everything that is valuable. And doing what you can to not be the low hanging fruit. Right?

So, making sure that you look across your life, understand where the holes are. And if you can’t see those holes, but you have a feeling that someone is exposed, let’s talk to someone, because that will really give you the peace of mind that you need and more importantly, the actionable steps to correct it.

Whitney: And do we want to talk about different types of insurance? Maybe just high level. The ones that we’re kind of thinking about and there’s all kinds of insurance, but we’ve talked about life insurance, property and casualty. I think even when you’re owning a business, key person, disability and then there’s cybersecurity.

What other ones am I missing, Dan?

Dan: Honestly, I think those are the five key ones that I would that I would hone in on. They’re always going to be nuanced situations when you have a unique circumstance in your life, like for example, if you have collectibles or something that is not typically covered by your standard.

Whitney: Property and casualty carrier, right?

Dan: Yeah, exactly. So, everyone’s going to have potentially a nuance in their life that they need to be mindful of. But those are the big ones. And just taking an assessment of your life, your property and your exposure on the internet. And that’s a very broad and all-encompassing term. And then lastly—one that you pointed out—if you’re a business owner, making sure that you have a contingency plan in the event that something happened to you. Primarily because that is going to be an economic engine that will be turned off pretty quickly if you’re unable to run it and make sure that you have the protection that you need for your family.

Those are all things that are critically important, both for business and for the constituents that are on the periphery, such as the family of the business owners. If we just start there and look at those key areas, there’s always going to be things that kind of branch off of that.

But those are the keys that we would tell you to worry about right now.

Whitney: And I think ask your advisor or if you don’t have an advisor, you should get an advisor and ask your advisor to educate you on each of these different types of insurance or risk mitigation and to see if you need it. And you always want to fully understand what you’re getting into.

Dan: Exactly. And that’s why if you start with the awareness part of it and don’t go directly to the product, the product will find you, basically. This is what I want to protect against. This is why. These are the circumstances that we have that lead you to the answer. You don’t start with, here’s a life insurance policy that may fit.

You have to reverse engineering it. Start with the why, and that will lead you to what the solution is. And if you do that and you take a very educated eye to it, you’ll be just fine.

Whitney: Did we touch on everything?

Dan: There’s one other thing that I just want to mention briefly, because we get asked about it a lot. And that’s this idea of self-insuring. The question that you have to ask yourself is whether you have the ability to withstand a catastrophic event.

And I’ll just use property and casualty as an example. Let’s just say that you say, well, if I save insurance premiums for 30 years and put it into an account and then use that money when I have an event, I’ll be just fine. It’s very possible.

However, recognize that weather, other insurance elements, don’t depend on your timeline. If that event happens in year one or year two, your beautiful math of saving all this money over time just goes right out the window.

And that can be applied to health insurance, that can be applied to life insurance. That thematic concept is really important.

But just make sure you’re really doing your homework before you leave yourself exposed.

Whitney: You need a human financial advisor or some kind of neutral party to help you with your specific customized life situation on any of these topics.

Dan: Absolutely. And without that, you’re always going to be wishing or wanting or doubting whether or not what you have is appropriate.

Whitney: Another good conversation, Dan. I hope everyone liked what they heard, and if you did, please like, subscribe or follow wherever you listen to your podcast and we’ll see you again next time.

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