Umbrella Insurance Policy

No, I don't work for an insurance company, but I'm going to mention something to consider if you have

your home paid off and your taxable brokerage account is growing.  

One of the few advantages your 401k/IRA has over your taxable accounts (savings/checking/brokerage) is that it is protected against lawsuits.  That means someone could sue you for everything but can't touch those retirement accounts.  So what do you do if you have a decent amount put away and a home?  You could lose it tomorrow in this litigation-happy country.  Or, for a few hundred bucks a year, get an umbrella policy.  

I'm not a fan of insurance - I know all the insurance companies do is invest your money in dividend stocks, then pay you from the dividends they receive.  That's why I talked my wife out of a term life insurance policy and she put it into dividend stocks.  That's why I pay legal minimum liability insurance on used cars I pay cash for (and can replace if repairs cost too much).  That's why I get the lowest home insurance for my condo.  That's why my kids will keep their driver permits until they leave the house (then they can get a license and pay for their own insurance).

I'm not a cheapskate, really I'm not.  I just think that money can be used to buy my own "insurance" via dividends instead of lining someone else's pocket.  Heck, I invest in an insurance company for dividends, and they are the only ones who pay bonus dividends (Old Republic ORI).  This is why an umbrella insurance is perfect for someone who doesn't want to waste money on car/home/life insurance.  

Another option is to start a business/LLC and put everything under it, but then there's business insurance and other costs you would pay anyway.  So, not going that route, here's how this policy can protect your assets, for much less than what you would pay for full protection on your car/house/life:

• Someone gets hurt on your property (even people you invite over)
• You cause a fire that damages neighbor's homes (listen up condo people)
• You crash a boat or RV you rented on vacation
• Your teenage driver hits a pedestrian
• Your dog bites someone and you get sued
• You post a review on Yelp that is negative and you get sued for defamation

You might say "Hey, I have insurance that covers some of that stuff", but your insurance has limits.  This goes above and beyond those limits up to a million bucks.  Now, my net worth (minus retirement accounts) isn't near that much, but it will keep me from getting my wages garnished after I lose everything else.  And I get to SWAN (sleep well at night).

With inflation rising, evictions starting tomorrow, and crime pretty much all over the place these days, it is good to have SWAN insurance to go with my SWAN stocks.  I like to look at it as retirement insurance - protecting my income.

I have also been assembling my retirement budget, so I know the bare minimum I will need to survive.  The good news is, my dividend income is almost at that point.  Once I have the bills covered by my taxable account, I can then pursue other things with the money from my 72(t) disbursements (see last month's blog).  That should hold me for 10+ years, then social security will kick in at 62, and there will be a 3rd source of income.  I will attempt to share my budget next month.  "But what about inflation affecting your current budget."  Listen, folks, if inflation is going up by 6%, and I'm getting dividend increases greater than that, I think I can handle it.  Dividends make future budgeting so easy... see if you can pay for today, because then you sure as heck can pay for tomorrow.

The delta variant is on the rise, and it looks like the vax people are in danger as well (1% of those vaxed have caught it so far).  That coupled with misdiagnosed fall flus and colds will make this an interesting year.  Most businesses will refuse to close, and will prefer to have you sign a waiver and mask up.  I hope this blows over in 3 years when I retire....

Dividend Increases & Special Payouts

Essential Utilities (NYSE:WTRG) declares $0.2682/share quarterly dividend, 7% increase from prior dividend of $0.2507.  Drink more tap water, use more gas.  Please.

July Purchases:

• Verizon (VZ) - 10
• Main Street (MAIN) - 3
• Omega Healthcare (OHI) - 4
• Chevron (CVX) - 4
• ONEOK (OKE) - 7
• Wisconsin Energy (WEC) - 5