This is a good point that I don't think is discussed much (at least around here).Tkydon wrote: ↑Thu May 06, 2021 7:46 am an important first step is Insurance - 1. term life, 2. medical, and 3. long-term disability - to protect you and your family from the vicissitudes that threaten people today - 1. funeral costs and the life style of your family after the loss of their primary wage earner, 2. medical bills and treatments that may not be covered by the standard Kokumin Kenkou Hoken (or other) cover, and 3. your income if you were rendered disabled and could never work again... In Japan, the system only covers you for about three years at a low fraction of your income)
The funny thing with investing is that if you do it long enough, you will end up with a high net worth that sort of is an insurance policy. Eventually it should be big enough that your assets alone could cover the sort of things you might otherwise want insurance for. Insurance companies are basically doing the same thing you are doing by investing anyway. They are just doing it on a much larger scale, charging extra fees, and pooling the risk.
But paying for insurance where the payout would be earlier or bigger that you could otherwise afford seems worthwhile. Of course having too much insurance is also a red flag, because you may never use it but it's consuming funds that could otherwise go into compounding investments. I wonder where the balance is.
