Blog: Human Protection (5) - Beware the wolf
Three little pigs arrived in a lovely little village. What a great place to stay they thought
The first little pig made his house of straw, thatched to perfection. He sat tall and proud in his little house, enjoying the glow of sunlight in the morning and the twinkle of stars through the window in the evening. He didn’t have any savings left, but was happy in the knowledge he had a lovely straw house over his head. All was well until one evening Mr Wolf came calling...
KNOCK, KNOCK
“Hello, little piggy, may I come in?”
‘No, Mr Wolf I will not let you in!”.
Mr Wolf scoffed at this – took a deep, long breath in and blew the little piggy’s house down.
When it comes to financially protecting ourselves, doing nothing is the equivalent of our first little piggy’s house. A house built of straw at some point will come tumbling down.
The second little pig, hearing of his friends disaster thought he knew better. He’d build his house with sticks, tying them all together nice and tight, even hanging some cute pictures of the family. He also built up 6 of months of income, just in case he needed it in future.
KNOCK, KNOCK
“Hello, little piggy, may I come in?” said a deep and dark Mr Wolf.
“No, Mr Wolf I will not let you in!”
With a devious grin, the wolf stepped back, sucked up all the air he could and exhaled hard and fast, and in three blows, the wooden structure blew away in a swirling gust.
Our second little piggy had given some consideration to the unexpected. He’d squirrelled some savings away just in case, but like our first little friend it only stood up so long to the big bad Mr Wolf.
And so, we come to our last little piggy, who’d made friends with the wise and canny local craftsman. He’d told him the strongest houses were made of brick and offered his help to build his new home. He explained to the little pig of the need to be prepared for the unexpected; to be able to weather the storms when they came and certainly hold up against the big bad wolf. It would need deep and sound foundations he told him – that was the key to building a house that lasts.
As expected, one evening while our little pig sat in his chair...
KNOCK, KNOCK
“Hello, little piggy, may I come in?”
“No, Mr Wolf I will not let you in!”
With all his might, Mr Wolf huffed and puffed until his very last breath, but this was a house that wasn’t going to fall.
This clever little piggy knew he had to be prepared for life’s unexpected moments. Not only did he have some cash in the bank (3-12 months of expenses), he’d also financially protected himself against ill health covering 60% of his income. That would keep a roof over his head until retirement if it came to it. And if one day Mr Wolf did succeed, he’d also ensured his litter of little piggy’s would be looked after with a human protection policy that paid out a lump sum, paying off his debts to the craftsman on his death, and even left plenty for his little piggy’s to live a happy and fulfilled life on the farm.
This is a house with strong and deep foundations. So, Mr Wolf, huff and puff away – we’re ready for you.
Your Call to Action:
House of Straw – Doing nothing. Financially exposed
House of Sticks – Do something. Build and maintain 3-12 month of accessible cash. Financially steady
House of Bricks – Do it right. 3-12 months of accessible cash, replacement income if unable to work/ill health, a lump sum to pay off debts and provide for loved ones on death. Financially prepared
Let’s build your house of bricks and keep Mr Wolf at bay. Get in touch at team@spentwell.co.uk and let’s get you on the path to financial security.
Keith Boyes
Managing Director
Chartered Financial Planner
Spentwell.
Guidance only. Investing in the stock market does carry a degree of risk and returns are not guaranteed. Be aware and understand the risks involved before participating. If in doubt, please seek professional advice.
Source: We’ve taken inspiration from the fantastic nursery rhyme ‘The Three Little Pigs, written originally by James Halliwell Phillips in 1890, and added our Spentwell spin to the story.