Risk Management

Risk Management can be defined as “planning for the what-ifs”. Quantifying the potential for loss (based on various analyses) must be precise if accurate solutions are to be considered.

Now, consider some of the not-so-obvious “what ifs” that are often overlooked, even by seasoned planners. These blind spots present greater threats and may warrant advanced planning.

This entails attempting to avoid high-risk activities which could result in catastrophic impacts on personal finances. Speeding, extreme sports, or smoking are all examples of high-risk activities.

In this method, one assumes all the risk and chooses not to mitigate the risk at all. For example, forgoing long-term care insurance due to the belief there are enough assets and income to cover the costs should the need arise.