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Wednesday, April 16, 2014

Fire in the Hole: Lesson Learned

Fire in the Hole: 
Lesson Learned

I dodged a potential big loss last month.  Anne, my wife, and I have a nice house and a very nice kitchen.  Anne is a gourmet chef, so we have really good (and expensive) appliances.  One fateful morning one of our appliances went rogue.  The control panel in the stove shorted out and the stove burst into flames.  Once a month we have cleaning ladies come in and, luckily for us, they were at the house and they're tough.  One hit the circuit breaker and the other called 911 and ran across the street to get my neighbor, who is a firefighter.  The fire was extinguished leaving behind one ruined, expensive stove and some burn marks on the floor.  We just finished the clean up this weekend.

We dodged the bullet, but it got me thinking about a lot of things, such as what if the cleaning ladies hadn't been there, or if we had been sleeping, or so many other possibilities.  Then I realized that I'm a personal finance whiz with some missing ingredients.  Had my house burned down, I did have replacement insurance on the contents, but didn't really have a record of the contents.  I have a whole bunch of pin numbers on my account, but not a way to get those to my wife.  I have insurance, but I haven't shopped it for quite a while.

This was annoying, so I sat down with the programs I wrote years ago and built some useful checklists; simple lists, but things we all should be doing.  We refined it and sampled it with some clients, and got a shocking 100% positive response.  It seems that most of us, no matter how organized we are, want to get our affairs in order and have some peace of mind.  I noticed something else:  I have a scarcity of time, so getting these things done liberates some time and brain space.

What kinds of things are on the checklists?  Well, the first and foremost is to make a visual inventory of the contents of your home.  Use one of your snazzy electronic devices, a camera or video recorder, and make a timely picture record.  Put something in the photos (e.g. Time magazine) that dates the picture.  Store the picture in a safe place.  What about your wallet?  Make a copy of the contents of your wallet (not the money, that's illegal), and have that in a safe place.  Do the same with your pin numbers and account numbers in your digital legacy.

There's more, a lot more.  Have you told your agent on your power of attorney about the POA?  Have you talked to the guardian in your will?  Did you put a guardian in your power of attorney?  Are you using auto-bill pay to speed up your cash flow?  Can you benefit from some kind of account aggregation?  This is where you can look at all of your accounts in one place at one time, like a dashboard.

All in all, we came up with almost 60 ideas of some simple, but important things that you can do.  Of course, not all apply to everyone, but the basic principle is simple:  a good financial life has a lot of pieces that are just common sense things that we should do.

Living without a stove for a couple of months was troublesome:  I can't wait to make some omelets.  On the other hand, I think about what might have happened and respect the wake-up call.  If you want a copy of our checklists, drop me an e-mail (leon.labrecque@ljpr.com) and I'll send you the pdf version.  I think it's the right thing to do and it will make you and your family's life better.  Oh, and be sure to check the batteries in your smoke alarms as well.



Leon