The Benefits of a Home Inventory
In my experience, the number-one reason people engage a financial planner is to sleep better at night. That doesn’t mean planners give advice on what kind of mattress to buy. The sleep aids we provide are more about peace of mind.
For example, you may be sleeping just fine, thank you, because your home and contents are covered by homeowners insurance. A planner might disturb your sleep by helping you look at whether you're getting the most protection from that insurance.
The first is having a detailed listing of all your home's contents, along with proofs of purchase and serial numbers. If a fire or flood destroys some possessions, the insurance company will need a detailed list of everything that was lost.
You have that list, right? It’s safely stored in a secure location other than your home, correct? And you update it annually? Congratulations, you are one of the .01% of homeowners that do!
Now, let’s be serious. There is a high probability you don’t do this and you are not losing sleep over it. Last time you checked, the amount of insurance to cover your home's contents seemed so high you could replace everything in your house and have enough left over to furnish your neighbor's place.
While you may be right about that, you could be terribly wrong. Do you know for sure?
Maybe, if you don't have expensive artwork or jewelry, you assume your ordinary belongings wouldn't be that expensive to replace. This isn't necessarily the case. If your refrigerator or washer and dryer are old enough to vote, you might be shocked at what it would cost to buy new ones today. Or think about what you might spend if you had to replace all the tools in your garage at once. How can you know the true cost of replacing all the contents in your home and that your insurance is high enough to replace them? By having an inventory of them and a reasonable idea of their current replacement cost.
If that isn't enough to disturb your sleep, consider this: A fire doesn't burn your house to the ground, but the contents in just a portion of it are destroyed. Now you really need that list. How are you going to prove that your $5,000 upscale mattress wasn’t a generic $800 version, or that your silverware was actually made from silver, not steel? Just having enough coverage won’t help you in this situation. This may leave you thinking maybe you should have a better plan than praying, "If there is a disaster to my home, please let it be a complete one."
The good news is there is an easy way to document everything in your home without having to make a detailed list with attached receipts and serial numbers. Simply get out your smartphone, walk through your house, and make a video recording of everything in it. In addition to filming furniture, fixtures, and wall hangings, be sure to open drawers, closets, and boxes. Capture the serial numbers of big ticket items and be sure to include the garage, all collections, china, silverware, and expensive antiques. Then store copies of the video in several places, including on the cloud and at least one flash drive located outside your home. Update your video once a year.
If updating the contents portion of your insurance and making a video inventory don't help you sleep better, maybe the problem really is your mattress. My advice is to do some research through Consumer Reports before you buy a new one—and be sure you add it to your home-contents video.
Most Read IRIS Articles of the Week: April 17-21
Here’s a look at the Top 11 Most Viewed Articles of the Week on IRIS.xyz, April 17-21, 2017
Click the headline to read the full article. Enjoy!
Like so many others in the industry, I was wrong. For years, I was certain that the bull market was nearing its end. I thought the market was over-extended, and that, surely, the wild equities run was coming to an end. But everyone else was bullish, and perhaps rightfully so. And while I’ve watched equities continue on their spectacular rise, I do think now is the time (really!) to put a hedge in place. Here’s why. Here’s how. — Adam Patti
The realities for fixed income investors have changed. How is this being reflected in markets? Bond investing has become increasingly difficult over the past decade. Markets have been heavily distorted by ultra-low interest rates and quantitative easing, as well as by extreme risk aversion in response to the global economic crisis and the eurozone debt crisis. — Nick Gartside
Is being a financial advisor worth it? I am an optimistic person and I encourage other people to keep a positive mental attitude (shout-out to Napoleon Hill and W. Clement Stone). However, by taking a good, hard look at the negatives in life, we can successfully pivot towards the positive aspects that will help us achieve our goals. — James Pollard
How do you treat one of your most valued, existing clients? Here’s a list of some things that come to mind. — Andrew Sobel
According to many advisors I speak with, the only clients that leave are those who have died. And while attrition may not be a big problem in this industry, I have to assume that at least a few clients change advisors without doing so via the funeral home. — Julie Littlechild
I was talking with an advisor last week about how to get into conversations about what he does. He was relaying the story of going jogging with a friend who could be a good client but is, more importantly, connected to a large network of people who fit this advisors ideal client description. — Stephen Wershing
Big picture thinkers are not unicorns - rare and mystical. And they were not born with the innate ability to think big. They do, however, pay attention to the broader landscape and take the time to think, analyze and evaluate. — Jill Houtman and Danny Domenighini
Your reputation is who you are and how you show up, Monday to Monday®. Many of us take our image and reputation for granted. Give careful thought to the kind of reputation that you would be proud of Monday to Monday® and that would resonate with your purpose and priorities. — Stacey Hanke
The generational changing of the guard is a fact of life as old as time. Young replaces old in responsibility, importance, control and culture. Outside of the family, the workplace is perhaps where this is seen most regularly by most people. — Shirley Engelmeier
Next time you hear your prospects give you price objections, it’s not because of the price. The give price objections because they don’t know the full value proposition that they’d be paying for. And it’s not based on their need, or your features and functions. It’s based on the buying criteria they want to meet internally. — Sofia Carter
Last week we wrote about the economic rationale behind going independent vs. moving to another major firm as an employee. As a follow-up topic, we thought it prudent to analyze transition packages attached to big firm moves and peel back the layers of the onion to show the components of these deals. — Louis Diamond
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