🛡️ Insure the Machine
You ARE the asset right now — your future earnings are worth millions. A 35-year-old earning $100k will earn ~$3M+ over a career. One disability or death without coverage wipes out everything Steps 1–2 built. This step is cheap and takes an afternoon.
Questions this step answers
Why this matters
Insurance feels like betting against yourself — until you realize it's the only thing standing between your family and financial ruin. The math is simple: protecting a multi-million-dollar future income stream costs a few hundred dollars a year in your 30s, when you're young and healthy. Wait until you need it and it's either unavailable or unaffordable.
The framework
- Term life: 10x gross income, 20–30 year term. A healthy 35-year-old pays roughly $25–40/month per $1M. Skip whole/universal life — it's expensive insurance bundled with mediocre investing.
- Disability: own-occupation, long-term. Your employer plan usually covers ~60% and it's taxable. Top up privately if you're the primary earner.
- Estate basics: will, beneficiary designations on EVERY account (these override your will), guardians for kids, healthcare proxy.
- Umbrella policy once your net worth crosses ~$500k or you own property.
When do I start a 529?
After your own retirement is on track — you can borrow for college, but not for retirement. Once you're hitting your savings target: open a 529 for each child, contribute enough to capture your state's tax deduction if one exists, then automate a monthly amount.
Choose an age-based portfolio — it shifts from stocks to bonds automatically as college approaches. And if grandparents ask what to give: point them at the 529. It's the highest-leverage gift they can make. The full 529 guide: tier position, beneficiary rules →
How do we handle money as a couple?
Three models all work: fully combined (one pot, total transparency), fully separate (split the shared bills, the rest is yours), or hybrid — a joint account for shared expenses plus personal accounts, which most couples find the sweet spot.
The model matters less than the habit: a monthly 20-minute money date to review spending, upcoming bills, and goals. Money fights are rarely about the system — they're about one partner being surprised.
Do I really need a will? What happens if I die without one?
Yes. A basic will plus named beneficiaries on every account covers most people — and if you have minor children, the will names their guardian, which is the part that matters most.
Without one, state law decides who gets your assets and who raises your kids — a slow, public process (probate) your family doesn't need.
Exception: beneficiaries override wills. An ex-spouse still listed on your 401(k) gets the money regardless of what the will says — keep them current.
Do this this week
- Get term life quotes (10x income, 20–30 yr term)
- Check your employer's disability coverage gap
- Name/verify beneficiaries on 401(k), IRA, life insurance
- Draft a basic will (online services are fine to start)
⚠️ Common mistakes
- Buying whole life because "it builds cash value" (the fees eat the value).
- Naming no beneficiary — your 401(k) goes to probate.
- Assuming "we're young, we'll do it later."