Many of my friends, students, clients, relationship managers at banks, business development managers at life insurance companies concentrate on ‘r’ – or the return that they can get on the potential new investment. I really am amused.
Let me tell you why. None, repeat none, except one brilliant uncle, knows their current income (unless it is all from salary), their dividend income, their investment ROI, …and I could go on and on.
In case you were to drop dead tonight, does your family know what to do, financially speaking?
Sadly for most people I know the answer is no. NO.NO.
Yes it is a capital no, font size 72, bold, underlined and italics – just for effect.
If you want your family to know what to do next, first do the following:
Create a master notebook of all your investment, mostly like a guide to the executor of your estate. Please realize if your wife knows nothing about mutual funds, even words like units, redemption, may sound like Latin. So please explain in brief.
Make a list of people you deal with – your accountant, your lawyer (if any), your mutual fund agent, your life insurance agent etc. and please explain each person’s role. If you have a friend who knows all about your investments, give his name and telephone number specifically explaining where he can help.
If you have invested smartly and know why each investment was made (elsewhere I have called it the investment philosophy statement – not knowing whether to call it philosophy or strategy) – make sure a copy is available to your spouse.
I could just go on and on…in fact if there is a good response I will post a pdf saying “what your spouse should know, if you are not around”.
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