Golden Eggs and Geese

Here is a question for you. If you had a goose that laid golden eggs, which would you insure? The goose or the eggs?

When I am teaching my college students, they always tell me they would insure the goose. After all, as long as you have the goose the eggs are replaceable. This metaphor works well for looking at your insurance. You are the goose... well, your ability to earn an income is the goose. In fact, the younger you are your ability to earn an income may be the most valuable asset you have. It is the income you earn which will provide all your wants and needs ... the eggs. As long as you have income your eggs can be replaced.

So why do most people insure the eggs and leave the goose unprotected? We insure our home, car, and jewelry and ignore disablility income protection and life insurance.

Need a bit of motivation? A few days ago we cited poor cash management and risk management as two of the biggest causes of financial failure. Insuring our goose is part of both.

Goose photo from Flickr by maverickapollo. Egg photo from Flickr by Dizzy Girl.