The wise man built his house upon the rock

The wise man built his house upon the rock

The wise man built his house upon the rock

And the rains came tumbling down

The rains came down and the floods came up

The rains came down and the floods came up

The rains came down and the floods came up

And the house on the rock stood firm

Are you familiar with this song?  This nursery rhyme was taught to us when we were in kindergarten right?  Do you still remember?

Building a home with a strong foundation is very important so that it will not be easily destroyed when calamity strikes.  Earthquake, fire, flood… these are what we call the acts of gods that we cannot control.  It is best that your home is calamity proof to protect your family.

It is difficult to build a new home all over again.  We make sure that all materials used are of good quality.  We should also have the same mindset in building our financial

home.  We make sure that each requirement of your financial home should be fulfilled and satisfied.   To make sure that it will stand firm against any unforeseen events.

These situations can be called SAD events… sicknessaccident, and death.  Death is guaranteed to happen to us, we just do not know when.  It is best to be ready for it so that your dreams and goals for your family will be fulfilled.

I have here a photo of a strong financial home.

First thing to do is to build a strong foundation.  The strength of the home starts from the ground up.

If you will notice in the photo, there are 6 levels at the bottom.  The same with an actual home, the deeper the foundation the stronger it will be.

Here are the 6 foundations to a strong financial home:

  1. Debt Management, – for more details you may visit my previous article. https://legacyoflove.info/3-strategies-to-pay-off-debt-fast/
  1. Budget Management – you need to list all your expenses every month and decide on a budget and commit to it.
  1. Emergency Funds -for more details you may visit https://legacyoflove.info/a-quick-guide-to-emergency-funds/
  1. Mortgage Redemption – if you have a loan, make sure that you get an equivalent life insurance coverage at least based on your outstanding balance so that if ever something happens to you, the debt against your home will automatically be fully paid. Your family will not be burdened to pay off the outstanding balance.
  1. Health & disability Insurance -for more details you may visit my previous article. https://legacyoflove.info/get-private-room-covid/

Next, we start putting up its walls.

Walls represent income continuation.  Without it, the residents of that home will not survive.  We need to insure the breadwinner for 10 times of his annual income.  Why 10 times?  It is 10 years worth of the breadwinner’s possible annual income so that the people left behind will maintain their existing lifestyle.

Followed by the ceiling.

Ceiling represents Education Planning for families with children.  Tuition fees increase significantly over time.  Parents must start planning for it to ensure their children’s education.

Then lastly, the roof.

The roof represents retirement planning and investment planning, and the highest level of the roof is estate planning.

Retirement planning is accumulating wealth to a certain point that passive earnings can be used for your monthly needs, becoming financially independent for life.

Investment planning is about accumulating wealth dedicated to purchase a large asset in the future.

Lastly, estate planning is about leaving a legacy to our children and grandchildren.  We would like to be like our grandparents someday who give Ang Pao (red envelope with money inside) to their grandchildren, right?

[bctt tweet=”Preparing for estate planning is not only giving Ang Pao but also ensuring a bright future for our children and grandchildren.” via=”no”]

Oh!  It’s so overwhelming right?

Ang daming information!

Do not worry, watch out for my future articles as I will dissect each topic one by one.

Preparing your financial blueprint needs proper planning and it takes time.  For you to be able to focus on your profession and businesses, let me, your legacy architect help you every step of the way.  If you are open for a one on one consultation, feel free to email me at sheila@legacyoflove.info.

Stay Safe and God bless!

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