@ClementsMoney Saturday Critical Action – Take Advantage of Your Growing Wealth

by | 23Jun2018 | Cars, Critical Actions, Insurance | 0 comments

Welcome to the Saturday Critical Action. Each Saturday we take the weekly action from Jonathan Clements‘ blog Humble Dollar and “militarize” it for you. Jonathan Clements was a longtime personal finance columnist for The Wall Street Journal, and he offers great advice at the best price you can get…free. Here is this week’s critical action:

TAKE ADVANTAGE OF YOUR GROWING WEALTH. You might avoid interest charges by paying cash for your next car, rather than borrowing. You could minimize financial account fees by always keeping the required minimum. You might save on insurance premiums by raising deductibles and lengthening elimination periods, and perhaps even opting to self-insure.


I have definitely done this. First, if you have to borrow money for a car then you can’t afford the car your buying. Buy one of these cars.

Second, I would not only keep the required minimum in your accounts to minimize fees, but keep as few accounts as possible. The fewer accounts you have, the better your financial life. And the less fees you are charged.

Finally, insurance is used to shoulder risk that you cannot bear yourself. Once you have a significant net worth, you should increase your deductibles and consider dropping comprehensive and collision coverage (but keeping liability coverage) on your cars that aren’t worth that much anymore. All of my insurance deductibles are at the highest that USAA will permit.



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